Activision and Bungie made a big announcement on Thursday when the companies confirmed they were splitting up, with Bungie getting the Destiny franchise going forward. While Destiny 2: Forsaken might have failed to reach Activision’s commercial sales expectations, it still means that the publisher is losing a revenue stream.
So it’s no surprise, then, that Activision Blizzard’s stock price dropped dramatically after the news was made public. Investors were seemingly spooked at the idea of Activision Blizzard losing a revenue-contributor.
The company’s share price fell by almost 7 percent in after-hours trading today on the New York Stock Exchange. The news was released after the stock market closed, so it’ll be intriguing to watch the share price tomorrow when the market opens. [Update: With markets now open, the drop has only continued; after closing Thursday at $51.35, it’s gone as low as $44.67 so far this morning. Since that point, it’s recovered slightly, although as of this writing it stands at $45.92, a 10.56% drop. Expect this to continue fluctuating throughout the day.]
In 2015, Activision Blizzard’s stock price reached a new all-time high, and it grew higher still, before dropping in the past year. In March 2018, one analyst firm downgraded Activision Blizzard’s stock rating, saying the company was facing a “combination of worries” that could affect its stock price.
In a Securities & Exchange Commission filing, Activision Blizzard said it doesn’t expect losing Destiny to have a significant impact on revenue or operating income in 2019. However, losing a franchise as big as Destiny will surely have an impact on Activision Blizzard’s bottom line in some capacity. Activision Blizzard next reports earnings on February 12, and it’s likely we’ll learn more at that time.
It’s been a time of change for Activision Blizzard lately. In addition to losing Destiny, Activision Blizzard CFO Spencer Neumann recently left to join Netflix, while Blizzard CFO Amrita Ahuja left the company to take a new job at Square (the mobile payment company, not Square Enix).
For more on the big Destiny news, check out the stories linked below.