Investing.com - Activision Blizzard (NASDAQ:ATVI) rallied on Thursday after data showing the game maker’s "Call of Duty: Mobile" game has taken the gaming world by storm drew positive comments from Wall Street.
Citing Sensortower data showing "Call of Duty: Mobile" generated more than $2 million from microtransactions and 20 million downloads within the first few days of release, KeyBanc analyst Tyler Parker said the game has the potential to generate 10x more in user spend. Activision Blizzard (NASDAQ:ATVI) rallied 4%.
"This is relatively in line or above other battle royale games, or mobile games that have stemmed from established IP on console," Parker said. "We continue to believe that the game has significant potential as a premium mobile game experience, and view initial datapoints as positive relative to our expectations of $20 million for the fourth quarter of 2019."
But Activision is not the only player raking in the plaudits for the explosive start of the mobile version of game. Tencent, which owns a stake in Activision, developed the mobile version of the game and oversees distribution for South Korea. Activision publishes "Call of Duty: Mobile" in regions including the U.S., Europe and Latin America.
But not everyone on Wall Street is convinced the game will be the panacea for Activision, which has been facing stiff competition from free-to-play battle royal games like "Fornite."
Bernstein on Wednesday downgraded Activision to underperfom from market perform, warning that the market was "paying too much for the hype" surrounding "Call of Duty: Mobile" and "World of Warcraft Classic."
"We cannot reconcile the current stock price with the company’s risk-adjusted fundamentals," said Bernstein analyst Todd Juenger.
Activision is up 16% so far this year and has an average price target of $57, according to consensus estimates from Investing.com.