Shares of computer game maker Activision Blizzard (ATVI) - Get Report got a boost Friday when the company said the open beta period for its new Overwatch team shooter game was its most successful trial period ever just a week after its first-quarter earnings beat analyst expectations.
The stock closed 1% higher at $38.29 after the Santa Monica, Calif.-based company said more than 9.7 million players tried the game from May 5 to May 10, the most it's ever had for a beta period.
"It's a good sign. Star Wars Battlefront had 9 million during open beta and has now sold 14 million copies," says Cowen Group analyst Doug Creutz.
The beta for Battlefront was also a record for Activision rival Electronic Arts (EA) - Get Report and sales of the game helped the company to also beat analyst expectations during its Wednesday earnings release.
"It's a reasonable indication," Creutz says.
The game is just one piece of Activision's strategy to keep earnings growing. The company Thursday said it would begin showing eSports content -- live games -- via Facebook's (FB) - Get Report new Facebook Live video service. The push will kick-off with a two-day Call of Duty: Black Ops tournament starting June 10 and Activision is promising to promote individual players to further humanize the events.
"We have already seen tremendous growth in audience reach," says Mike Sepso, co-founder and senior vice president of the Activision Blizzard Media Networks unit, in a statement. "We are continuing to work with Twitch and Instagram, and we will be producing a lot of daily content on Facebook live."
Activision has also said it will begin showing advertisements in games from Candy Crush maker King Digital Entertainment, which it acquired in February for just under $6 billion.
"We believe Activision Blizzard could earn well in excess of $3 [per share] by 2018 if it optimizes King's untapped advertising opportunity and unlocks deal synergies, suggesting its stock is significantly undervalued," writes Webush Analyst Michael Pachter in a recent note.
He expects Activision to have EPS this year of more than $2 thanks to the Overwatch introduction and initial synergies in the King acquisition.
Activision's shares have gained just 9 cents in the past week after leaping 8% following its first-quarter earnings report after the market closed May 5.
The company reported earnings of 23 cents per diluted share for its 2016 first quarter, up from earnings of 16 cents per diluted share for the 2015 first quarter. It reported record revenue of $1.46 billion compared to its 2015 first quarter revenue of $1.28 billion.