World of Warcraft: Shadowlands Release Delayed; Activision Blizzard Falls

Activision's latest World of Warcraft release, Shadowlands, has been delayed until later this year, the Santa Monica, California-based video game maker told investors late Thursday.
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Activision Blizzard Inc.  (ATVI) - Get Report shares slipped lower Friday after the video game maker said it would delay the latest release of its popular World of Warcraft series until later this year.

Activision Blizzard said World of Warcraft: Shadowlands, originally slated for release on October 27, will be pushed into the final weeks of the year owing, in part, to the challenges brought from work-at-home trends in the wake of the coronavirus pandemic. Activision Blizzard said the game remains in its 'beat testing' phase, which includes changes suggested from player feedback, but added the delay won't have a material impact for its 2020 financial year results.  

“The anticipation and demand for Shadowlands is the highest it’s ever been for a World of Warcraft expansion, and it is important for us to deliver an experience that meets our highest expectations and those of our players,” said John Hight, the executive producer for World of Warcraft. “With that in mind, we made the decision to do what’s right for the game and take the extra time, and we think players will enjoy this expansion even more as a result of the additional work.”  

Activision Blizzard shares were marked 1.6% lower in early trading Friday, a move that was roughly in-line with the anticipated decline for the Nasdaq Composite index following news of President Donald Trump's positive coronavirus test, to change hands at $81.38 each.

"A short delay like this signals the game is close rather than in need of serious work, in our view, which gives us comfort in the eventual quality of the content and may just represent a push in some top-line growth depending on how late the release is," said KeyBanc Capital Markets analyst Tyler Parker.

"A mild delay to adjust to player feedback is likely a smart move to effectively maximize the LTV of subscribers rather than risking churn with mediocre content," he added. "Additionally, depending on the release date, conservative 4Q20 guidance and a potentially large CoD release could more than make up for any risk to near-term guidance and act as a moderate tailwind to 2021 results if it moves some box sales and subscriptions into next year."