COMPANY PROFILE -Activision Blizzard
Business Sector :Video Games
Operating Geography :United States, North America, Global
About Activision Blizzard :
Activision Blizzard Inc is an American video game holding company which is headquartered at Santa Monica, California. The company was originally incorporated in California in 1979 and was reincorporated in Delaware in 1992. In June 2008, Activision Blizzard was founded after the merger of Activision, Inc. and Vivendi Games. The Company, currently includes five business units: Activision Publishing, Blizzard Entertainment, King, Major League Gaming and Activision Blizzard Studios. The major products produced by Activision Blizzard include Call of duty, Guitar Hero, Tony Hawk’s and Spyrol/Skylanders through the Activision Studios, StarCraft, Diablo, Heroes of the Storm, World of Warcraft, etc., through Blizzard Entertainment and mobile titles including Candy Crush Saga through King. These titles have been trailblazers, breaking a number of release records and catapulted Activision as the largest game company in Americas and Europe in terms of market capitalization and revenue. Based on the 2019 annual reports, platform providers like Sony, Apple, Google, Microsoft or retailer like Walmart or GameStop also contribute significantly to this gaming giant’s net revenues (approximately 40% of their revenues) in addition to end customers. As of early 2021, the company had approximately 9,500 employees.
The USP or Unique Selling Proposition of Activision Blizzard lies in being the world's largest gaming company in the Americas and Europe by revenue and market capitalization as of 2020. Activision Blizzard’s mission statement reads “connecting and engaging the world through epic entertainment – has never been more relevant and important. As we continue to execute on our strategy, our investments in our biggest opportunities continue to allow us to provide superior shareholder returns.”
Activision Blizzard Revenue :
US $8.1 billion – FY ending 31st December 2020
US $6.5 billion - FY ending 31st December 2019 (Y-O-Y growth of (negative) -15.6%)
Competitive Analysis of Activision Blizzard
Activision Blizzard, Inc. is an American computer game company based in Santa Monica, California. It’s one of the most important game company within the Americas and Europe in terms of revenue and market capitalization. SWOT analysis is essentially a vital strategic planning tool which is employed to analyze strategic factors impacting an organization. It's a handy technique to research, inspect and weigh out the different Strengths (S), Weakness (W), Opportunities (O) & Threats (T) that Activision Blizzard is facing in its current business environment. The core purpose of the SWOT matrix is to spot the strategies that a corporation can employ to leverage its competitive advantages, grab opportunities, counter threats, and workout on dissolving its weaknesses.
As one of the leading organizations in its industry, Activision Blizzard has numerous strengths that enable it to thrive within the market place. These strengths not only help it to guard its wallet share in existing markets but also helps in penetrating new markets with its strong product portfolio gaining competitive advantage. Strategic alliances and acquisitions have helped the gaming giant conquer rapid growth. Activision Blizzard has some inherent weaknesses due to reliance on third party for few products. In the wake of the pandemic, the gaming wizard has increased its gamut of offerings, thanks to differentiated experience using latest technology and growth in mobile gaming. The company faces external hindrances due to high competition in the industry, piracy being a potential killer. New technologies developed by competitors or rapid market technology disruptors might be significant threats thwarting growth.
The SWOT analysis for Activision Blizzard is presented below in a matrix followed by a detailed analysis
| Strengths | Weaknesses |
1. Broad distribution and reach
2. Robust product portfolio of leading mobile gaming franchises
3. Strategic partnerships and acquisitions
4. Digital revenue streams more recurring and providing relatively higher profit margins
5. Skilled labour force and recognized for positive work culture
| 1. High dependence on a few products
2. Reliance on third-party platforms
3. Seasonality in sale increases risk
4. Lawsuits regarding toxic workplace environment
5. Possible failure in effectively manage growth and business complexity |
| Opportunities | Threats |
1. Differentiated experience using latest technology
2. Increased user activity due to ongoing pandemic
3. Growth in interactive entertainment including mobile gaming
4. Opportunities to expand franchises outside of games
5. Boom in mobile gaming will increase the sales of the company
6. Emergence of cloud gaming | 1. Increasing importance of free-to-play games
2. Effectively manage growth and business complexity
3. Impact of Technological Innovation
4. High competition in the industry
5. Piracy a persistent problem for the gaming industry |
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Detailed SWOT Analysis of Activision Blizzard
Strength
1. Broad distribution and reach: Many of the products produced by Activision Blizzard contain software which enables them to easily connect with customers directly. This results in ease of communication and marketing directly to the customer through customized advertising and in-game messaging based on consumer preferences and current trends. To establish a strong connect, the company has also indulged in activities like online social networks, other online advertising techniques; participation in cooperative advertising programs; direct response programs, etc. The company also receives support from hardware manufacturers, retailers in connection with their promotional efforts and producers of consumer products related to a game. The physical merchandise is also available for sale in outlets around the world, through mass market retailers (like Walmart, Target etc.), discount warehouses game speciality stores and other stores or through third party distribution or licensing. In addition to this, most of the products are also available in a digital format, which allows ease of purchase based on the convenience directly on the PC or mobile device. Blizzard Battle.net also offers a distribution platform with communication features, social networking, player matching and other similar features designed to allow the people to connect irrespective of their games that they are playing on the platform.
2. Robust product portfolio of leading mobile gaming franchises: The company’s portfolio showcases leading mobile gaming franchises like Candy Crush, e-sports opportunities like Call of Duty League and Overwatch League and some of the leading PC and console gaming franchises like World of Warcraft, Star Craft etc. Over the time, based on their expertise and success, the company also plans to roll out media integrations across Activision Blizzard portfolio which will prioritise platforms based on their ability to provide better opportunities for the brand. This varied portfolio of interactive content has managed to garner millions of customers for the company; Overwatch (40 million), World of Warcraft (more than 100 million players) to name a few of the trending games of the company. Additionally, due to the huge following, the company have also had the opportunity of partnering will companies like McFarlane (Collectible Figures), USAopoly (Risk and Monopoly board games in North America), Pyramid (Homeware, Accessories). These collaborations serve the dual purpose of marketing as well as financial gain through licensing fees.
The remaining section under "Strength" is available only in the 'Complete Report' on purchase.
Weakness
This section is available only in the 'Complete Report' on purchase.
Opportunity
This section is available only in the 'Complete Report' on purchase.
Threat
This section is available only in the 'Complete Report' on purchase.
PESTLE analysis is a strategic tool to analyze the macro environment of the organization. PESTLE stands for - Political, Economic, Social, Technological, Legal & Environmental factors; These factors collectively impact the macro environment of an organization.
PESTEL/PESTLE/PEST analysis provides greatdetail about operating challenges that Activision Blizzard will face in the prevalent macro environment alongside competitive forces. For example an industry may be highly profitable with a strong growth potential but it won’t be of much good if the company is situated in an unstable political environment. Political factors play an important role in long term profitability. Political instability and tensions poses threats to the company. The economic factors such as inflation, deflation, aggregate demand and supply, interest rates, foreign exchange rates, etc. affect the company’s environment to a great extent.
Society’s culture and way of doing things impact the culture of a corporation in an environment. Shared beliefs and attitudes of the population play a great role in how marketers at Activision Blizzard, Inc. will understand the customers of a given market and how they design the marketing message for Multimedia & Graphics Software industry consumers.
Technology provides opportunities due to emerging innovations and threat due to risk of emergence of mobile gaming and free-to-play games.
Different countries have different laws which affect Activision Blizzard due to its wide reach in legal aspects. There is even increased regulatory scrutiny on content and risk of inadequate intellectual property laws. With regards to environmental factors Activision Blizzard has commented on using environment friendly packing whenever possible. It also uses soy-based inks for printing, limiting the toxic content.
The PESTLE analysis for Activision Blizzard is presented below in a nutshell followed by detailed analysis
| Political | Economical |
1. Regulatory changes for Internet and related services
2. Risk of rising political tension with other countries
| 1. Impact of fluctuations in foreign currency
2. Impact on discretionary spending for video games |
| Social | Technological |
1. Behavioural changes due to video games
2. Gaming as a Cultural force
3. Video games redefining social spaces
4. Unions revolutionizing gaming industry
5. Workplace initiatives to improve working conditions of women | 1. Opportunities due to emerging innovations
2. Risk of emergence of mobile gaming and free-to-play games
3. Increased awareness of data privacy among consumers |
| Legal | Environmental |
1. Risk of inadequate intellectual property laws
2. Increasing laws for regulating the operating sector
3. Increased regulatory scrutiny on content | 1. Environmental Awareness in Gaming Industry |
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Detailed Pestle Analysis of Activision Blizzard
Political
This section is available only in the 'Complete Report' on purchase.
Economic
This section is available only in the 'Complete Report' on purchase.
Social
This section is available only in the 'Complete Report' on purchase.
Technological
This section is available only in the 'Complete Report' on purchase.
Legal
This section is available only in the 'Complete Report' on purchase.
Environmental
1. Environmental awareness in gaming industry: Various gaming industry players are adopting green policies to reduce their carbon footprint on the environment. Companies like Ubisoft decided to remove paper manuals from games boxes in order to reduce waste. Similarly, Activision Blizzard have also commented on using environmentally friendly packing “whenever possible”. The company uses Amaray’s EcoLite DVD cases for Xbox 360, Wii, DS and PS2 games and have committed doing the same for other upcoming models as well. EcoLite cases are 20% lighter than normal and are fully recyclable. Additionally, it also uses soy-based inks for printing, limiting the toxic content. Sony has also offered its detailed green policies report and has been identified as the most eco-friendly platform holder in Greenpeace report published. Many other companies like EA, Nintendo has also published regarding the green policies currently being followed in their companies, implying an increasing shift towards a greener video game industry.
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WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
The Activision Blizzard SWOT and PESTLE Analysis report will offer the following:
- Activision Blizzards SWOT and PESTLE analysis report demonstrates an understanding of the complex internal and external factors shaping the brand and its operations.
- SWOT analysis is a tool to analyze the internal and external factors. Internal analysis evinces a discussion on how Activision Blizzard can ameliorate its strengths and overcome its weaknesses, whereas the external analysis helps to identify the opportunities for development and eliminate threats that can hamper growth.
- The PESTLE analysis gives a bird’s eye view of the whole environment (macro factors) of Activision Blizzard from many different angles that one wants to check and keep a track of while contemplating a certain idea/plan.
- The analysis report helps the users to understand the business models of Activision Blizzard with regards to influencers like political, economic, social, technological, legal and environmental factors.
- Activision Blizzard’s comprehensive analysis to conclude information about its company position, marketing strategy, business plans and performance of it’s brands, partners and subsidiaries.
- A summary of Activision Blizzard’s mission, vision and unique strategies to capture the market.
- Record of strategic initiatives extended by Activision Blizzard to stay ahead of its competitors and attain competitive advantage.
- A brief idea about company’s mergers, acquisitions, profit appraisal, deals, alliances/partnership/ventures.
- Identifying the core values, key performance indicators, and success factors that contribute to sustainable growth for Activision Blizzard.
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References used in Activision Blizzard SWOT & PESTLE Analysis Report
1. Activision Blizzard fourth quarter and financial results 2019 - https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-fourth-quarter-and-2019-financial
2. Activision Blizzard annual report 2019 -https://www.activisionblizzard.com/content/dam/atvi/activisionblizzard/docs/Activision-Blizzard-2019-Annual-Report.pdf
3. Activision Blizzard Recognized on Fortune's "100 Best Companies to Work For®" List for Fourth Consecutive Year - https://investor.activision.com/news-releases/news-release-details/activision-blizzard-recognized-fortunes-100-best-companies-1
4. Activision Blizzard product portfolio - https://www.activisionblizzardmedia.com/our-portfolio
5. Activision Blizzard Consumer Products Group Brings Franchises of the Future, Esports and Fan-Favorite Properties to Licensing Expo 2018 - https://investor.activisionblizzard.com/news-releases/news-release-details/activision-blizzard-consumer-products-group-brings-franchises
The detailed complete set of references are available on request in the 'Complete report' on purchase.
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In-text: (SWOT & PESTLE.com, 2022)
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Activision Blizzard SWOT and PESTLE analysis has been conducted by Pallavi Roy and reviewed by senior analysts from Barakaat Consulting.
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