Facebook and Activision Blizzard Level Up With Gaming Partnership

When thinking of Facebook (FB) and games, the first thing that pops into one's head is probably the incessant pleas from friends to help them improve their Candy Crush scores.

However, a new partnership between Facebook and Activision Blizzard (ATVI) , one of the world's most respected video game companies, is challenging this idea. These companies want to use the online presence and power of the social-media giant to create a major platform for games.

It may sound ridiculous, but gaming is big business, with big profits to be made. This new deal could literally be a game-changer for investors.

Facebook said that it is teaming up with the maker of World of Warcraft, one of the world's most popular games.

The arrangement will allow players of Blizzard Entertainment's lineup of games to live stream their experiences using Facebook Live. Other Facebook members will be able to subscribe to these streams, and the social-media company will notify subscribers when new videos are made live.

"We've worked on [this agreement] for many months," said Leo Olebe, Facebook's director of global games partnerships.

"The most important thing was to build something that is incredible for people, and Blizzard is always amazing at that," he said. "They had to really get behind this."

Live streaming is a large part of the gaming experience, and online companies are spending big bucks to be able to host these gamer-made videos.

In 2014, Amazon broke ground when it purchased live-stream platform Twitch for $970 million. This was Amazon's biggest acquisition to date.

And Alphabet's Google is also in this arena, hosting game live streaming via its YouTube service.

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Twitch remains the most popular platform for watching videos of people playing games. And it has paid off for Amazon in the form of advertising revenue.

Last year, Twitch had more than 60 million unique viewers.

That isn't huge when compared with Facebook or even the ailing Twitter, but about 60% of these users spent more than 20 hours a week on Twitch. That is a lot of engagement.

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But Facebook's 1.65 billion unique users could blow Twitch's ad revenue out of the water.

Both Activision Blizzard and Facebook are good investment choices for those looking to play the fast-moving technology world, as both are relatively stable.

Activision Blizzard's stock is trading at about $37 a share, very close to its 52-week high of $39.99. Last month, shares of the game developer soared by nearly 14% with the release of a new hit game, Overwatch.

Facebook has had a great year, with earnings beating expectations and a rising stock price, which is at about $119 a share.

Keep these stocks on your radar. As the partnership expands -- perhaps presenting Facebook with more opportunities to break into the lucrative video game sphere -- investors should be pleased with the leveled-up profits that they receive.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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