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Activision's (ATVI) King Acquires Artificial Intelligence Firm

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Activision Blizzard’s ATVI subsidiary and Candy Crush developer King announced the acquisition of Pelatrion, an artificial intelligence (AI) software company.

Pelatrion, head-quartered in Sweden, is a no-code machine learning (ML) operations platform developer, enabling users to train, design and manage deep learning models, at speed and at scale, in the cloud.

The Pelatrion acquisition will likely help Activision’s King accelerate the use of AI and ML in its gaming platform. It will also enable the company to launch innovative game developments and designs and improve live operations capabilities.

The move is expected to help Activision improve its already strong gaming portfolio.

Activision Blizzard, Inc Price and Consensus


Activision Blizzard, Inc Price and Consensus
Activision Blizzard, Inc Price and Consensus

Activision Blizzard, Inc price-consensus-chart | Activision Blizzard, Inc Quote


Expanding Portfolio Bodes Well

Activision keeps expanding its popular franchises and adding new content to its gaming portfolio.

The company’s enduring franchises such as Call of Duty, Overwatch, Warcraft, Crash Bandicoot, Candy Crush, andFarm Heroes, among others, are expected to attract games, thereby driving the top line in the near term.

With the world returning to its normal functioning, the video game industry has witnessed a decline in consumer spending on video gaming. Per Sensor Tower Data, The U.S. consumer spending on mobile games declined 10% year over year during first-quarter 2022.

Despite the uncharacteristic decline in mobile game spending and a net slowdown in revenue generation, the category witnessed growth in the usage of popular mobile titles. This has thus resulted in an increase in their combined active users. These trends bode well with Activision.

Activision has a lineup of exciting gaming content slated to be released in 2022 and 2023. Recently the company announced the launch of Diablo Immortal, an expansion of its oldest franchise Diablo. In the second half of the year, Activision will also release its next premium title in its Call of Duty franchise and World of Warcraft: Dragonflight, the World of Warcraft (WoW) expansion. The company also hinted at the internal testing of Diablo IV, to be released in 2023, and the external testing ofOverwatch 2, which began on Apr 26. These slated releases are anticipated to boss the company’s user growth and net booking in the near term.

In the last reported quarter, King’s in-game net bookings grew 8% year-over-year, driven by the Candy Crush franchise. The trend is likely to continue.

However, great prospects in the industry also bring intensifying competition for Activision from the likes of Take Two Interactive Software TTWO, Electronic Arts EA and Nintendo NTDOY.

Activision, which currently holds a Zacks Rank #5 (Strong Sell), is up 13% year to date compared with the Zacks Toys - Games - Hobbiesindustry’s return of 0.9%. Electronic Arts’ shares have declined 2.1%, followed by Nintendo’s decline of 9.3% and Take Two’s fall of 30.7% year to date.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Take-Two’s publishing label 2K and Marvel Entertainment recently publicized the release of Marvel’s Midnight Sun. The tactical role-playing game, created by the Civilization and XCOM franchise developer, Firaxis Games, is all set to be launched on Oct 7.

Notably, Electronic Arts unveiled that brand-new gameplay features will be available in Madden NFL 23. The game launches on Aug 19 worldwide. EA’s Respawn Entertainment and Lucasfilm Games unveiled the next chapter of the popular Star Wars action-adventure series, Star Wars Jedi: Survivor, scheduled to be launched sometime in 2023.

Nintendo, which has several hit franchises like Brain Age, Kirby, Super Smash Bros, Pokémon and Mario, among others, recently announced the release ofMario Strikers: Battle League, available on Nintendo Switch.

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