In my quest to find great dividend paying stocks one of the groups of companies I have always overlooked has been the gaming industry. For whatever reason I never bother to look into any of their statistics and see if there was something there. I know I can’t be the only one so today I decided I’d go down that rabbit hole and see where it leads me.
I decided to start with a company I have seen be successful from the players side of things for as far back as I can remember. That company is Blizzard. Blizzard for those not in the know are makers of three of the most popular franchises in gaming history: Starcraft, Warcraft (including the MMO World of Warcraft), and Diablo. Each of these games has a dedicated fanbase willing to shell out cash at the mere mention of these names. Why? Blizzard is known amongst te gaming community for putting an abundance of effort and value into their games. You always get your money worth and probably a little extra.
What’s even better Blizzard had paired up with Activision not too long ago giving them an extra boost of gaming cred. Activision is known for being a more casual gaming company with famous titles such as Guitar Hero, and the new Call of Duty:Ghost. All of which sounds great, but what does that do for you the potential Investor? Let’s see the chart:
This is a pretty good looking chart if you ask me. A bunch o f cash, no debt, pays a dividend, good growth, etc. At 17/share what a deal right? Well sort of. Activision is not likely to be the side of the company making the cash. A huge chunk of revenue comes from subscriptions to their MMO World of Warcraft, which charges players $15 a month to an average of 7.7million players worldwide.
The only foreseeable issue there is the new MMO dropped by Square Enix which is currently bogarting a pretty hefty number of players. For those who follow these things, this is not the first and definitely won’t be the last attempt to unseat the king of all multi-player games. Blizzard has fought through more established titles, newer upstarts and a dozen supposedly WoW killers. In all cases, Blizzard has survived and grown larger still. This is a company for all intents and purposes, not going anywhere anytime soon.
But what of the competition? Square Enix currently trades on the Japanese stock exchange for about 1500¥. The company which is best known for its series of games titled Final Fantasy, ha been going strong since the mid 90s. Unfortunately my usual methods and chart sites don’t give me any info on stocks that trade on the Tokyo exchange, so I’ll be sure to revist this once I have that analysis available. However with the release of a new and seemingly successful MMO which should bring in some steady revenue the $15 price tag may be low.
Well that is all for this one, as I need to hunt down some more information. Nonetheless, from what I can see Activision/Blizzard may not be a bad long term play in my attempt to “game” the market.