There’s no doubt that Activision has been kicking ass and taking names, recentlyovercoming EA to be the top third-party publisher, but now it seems that they have their work cut out for them, as competition for their top franchises are drawing near.
Janco Partners analyst Mike Hickey thinks that competition for Activision’sGuitar HeroandTony Hawkmay eventually get in their way.
Speaking of EA’sRock BandandSkate, Hickey says, “Emerging competition for some of their core franchises, includingGuitar HeroandTony Hawkwill likely prove damaging for growth prospects.”
“In addition, their mass market licensed sales in fiscal ’08, which includedSpiderman,ShrekandTransformersshould be near impossible to replicate in fiscal ’09.”
Competition isn’t always a bad thing. Hickey expects more to come out ofGuitar Heroin the future, speculating that another instrument may be on the way.
“We expectGuitar Heroto follow a natural product evolution by adding additional music peripherals in CY08. Importantly, theGuitar Herofranchise that is developed internally and owned, offers a meaningful operating margin expansion potential versusRock Band, which is purely a distribution deal for [Electronic Arts].”
[ViaGamasutra]
