Activision Shares Drop due to Loss of WoW Subscribers

Modern Warfare 3 is definitely Activision’s key concern keeping in view the record-breaking pre-order sale, which helped Activision to make $148 million by third quarter of the year. However, the severe drop in Warcraft subscription has caused massive damage.

Over the last three months almost 800,000 members unsubscribed themselves, raising the total above million since October 2010. This decline in the number of active users has caused a drop of 6.5% to $13.02 the biggest drop since Feb. 10. The shares have gained 4.7 percent this year.

One reason that the decline in ‘Warcraft’ subscriptions causes worry is that the game is believed to be vulnerable to competition coming from the release of “Star Wars: The Old Republic” by Electronic Arts next month. While ‘Warcraft’ subscribers in China generate per-user revenue of about $1 per month for Activision, subscribers in Western markets account for about $15 per month, according to Michael Pachter of Wedbush.

Do you think that games like Star wars are the only factor responsible for this decline or people are loosing interest in the game? How do you perceive this agenda?

Contributor at SegmentNext.