Two days ago, Activision and Bungie announced an early split of their long-running partnership, a split that transferred publishing rights for the franchise back to Bungie itself. Bungie was full of plans to flesh out and continue the existing roadmap and presumably , and Blizzard was reassuring everyone that Destiny 2 would remain on Battlenet, but whoa there, back the truck up.
Apparently some investors got their hackles up over the split and moved to investigate it as a class action. “The investigation concerns whether Activision and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices,” says the attorneys’ press release.
“On January 11, 2019, the Company disclosed that it would be separating from its design and development partner Bungie, Inc. (‘Bungie’) and that Bungie will assume full publishing rights and responsibilities for the Destiny franchise. Bungie had developed the Destiny franchise with Activision as publisher. In the first five days of the Destiny franchise’s release, it sold $325M at retail. Following this announcement, Activision’s stock price fell sharply during intraday trading on January 11, 2019.”
Specifically, it fell as much as 13% yesterday. It lost nearly 20% last year following the “disappointing” Forsaken launch and BlizzCon bomb. As we’ve previously reported, Activision’s CFO was recently fired and then poached by Netflix (the exact timeline there still isn’t clear).
Some investment analysts are calling Activision’s moves a “clandestine restructuring” and expect revenues from Blizzard’s core titles in 2019 to continue to decline. “The recurring theme from most of these comments from analysts cutting their price targets (and even from analysts like Blair, and Morgan Stanley as well, who didn’t), is that Activision’s decision to cut ties with Bungie increases uncertainty about Activision Blizzard’s growth outlook,” The Motley Fool’s Rich Smith writes. “At the same time, most analysts remain optimistic about the stock, and generally agree that Activision will ultimately power through these changes.”