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Technology Stocks : Activision....Returns! -- Ignore unavailable to you. Want to Upgrade?

To: jtech who wrote (1276)	10/22/1998 8:15:00 PM
From: Tom Caruthers	Read Replies (1) \| Respond to of 1992

Just listened to the conference call... Some thoughts... 1) You're right Alex...sounds like they have too much on their slate to get into sports games at this time. Also, ERTS just picked up Radical's ESPN snow boarder title. Looking at the 2000 slate of games: Toy Story 2, A bug's life, Space invaders, Spiderman, X-men, a "few" Star Trek Titles, Quake 3, Dark Reign 2, Heavy Gear 3, Battlezone 2, Nightmare creatures 2, Vigilante 12....likely Beneath, 5 rings...etc... That's a heck of a lot of games to develop though some of the ATVI funded production shops are taking on a lot of these. Also interesting is that most of these games are "well into production" according to Kotick. This is where size does matter...Mgmt says better predictability in earnings....even if one title slips, able to cover with other strong titles. Head count at ATVI internal production dropped 10-15% even after acquisition (I think this is what was said). 2) I think they can really achieve their revenue goals...margins will still be low...mgmt said comfortable with current estimates for year which are $0.63...with upside if a game is a hit. Looking at their figures, I hope they are being conservative because they are going to have to earn a lot to make up for that $6 million loss for the half...Certainly it's doable...and their balance sheet will look a heck of a lot better once they burn off that inventory. 3) Asteroids....most buzz of any game and pre-orders are huge.... Industry buzz says it's essentially the same game just jazzed up with graphics...but look at frogger....panned by the press...loved by consumers...I think a lot of people want games they don't have to spend hours playing....especially women. 4) Will slow down acquisition trail and focus on improving margins. Looking to slowly improve operating margins to double digits. Forcasting $550-600 million revenue in FY 2000... 5) Overall...looks pretty good going into Christmas...Sin will ship, Q3 will slip to Q4...but overall product mix looks pretty good...not too much cannibalization. Any thoughts? Reactions? Tom