Analysts bullish on Starcraft II sales
Signal Hill's Greenwald calls 5-6M sales estimates conservative, while Lazard Capital's Sebastian predicts 6.5M sales for Blizzard's latest through 2010.
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Blizzard Entertainment's Starcraft II still didn't have a release date in February, but that didn't stop a host of analysts from laying out their predictions for the sci-fi real-time strategy title. Pacific Crest Securities' Evan Wilson put the game's sales at 6 million, while Wedbush's Michael Pachter felt Starcraft II and World of Warcraft: Cataclysm could combine to sell 12 million through the end of 2010.
With Starcraft II out for just over 24 hours, Blizzard has yet to offer official sales figures for the title. However, that hasn't stopped a new batch of analysts from weighing in on the game's sales potential over the next several months. Signal Hill's Todd Greenwald believes Activision Blizzard's bottom line will be inflated by Starcraft II sales of upward of 5 million.
"We have picked up nothing but positive data points on the recent launch of Starcraft II--from South Korea to New York, the excitement over SCII is palpable," Greenwald wrote. "We think that rough estimates for Starcraft II to sell 5-6 million units this year are highly achievable and will prove to be conservative over the next five months."
Greenwald called out a variety of reasons for making his multimillion-unit sales prediction for Starcraft II. Namely, he said the original Starcraft, released in 1998, has sold 10 million units worldwide, 5 to 6 million of which were sold in Korea. He also noted that there are currently 11 million users still actively playing the original Starcraft and Diablo II through Blizzard's online platform, Battle.net.
More than just selling a Zerg rush's worth of units, Greenwald believes Starcraft II will bring hefty operating margins for Activision Blizzard.
"Despite being in development for four to five years…the vast majority of SCII's development costs have already been expensed, which makes the margin impact of SCII even more positive," he wrote. "It already stands to be one of Activision's most profitable titles, given that it is on the PC (no $8-9 hardware royalty), it is retailing for $60, not $50, and it should sell a large portion digitally through Battle.net, foregoing the 20 percent royalty paid to retailers. We believe SCII can approach 50 percent operating margins and contribute at least $0.07 of earnings to Q3 results."
Though he did so in a less verbose fashion, Lazard Capital Markets' Colin Sebastian also expects Starcraft II to sell gangbusters before the end of the year. According to the analyst, Blizzard's latest should sell some 4.5 million units through September, a number that could swell to 6.5 million units through the remainder of 2010.
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