Activision Blizzard Stock Tumbles Following Diablo Immortal Backlash

Activision Blizzard held its annual BlizzCon conference over the weekend, and many gamers hoped that the next major entry in the Diablo franchise would be part of the event. That hope was despite the fact that Blizzard had put out a statement ahead of BlizzCon saying that no major Diablo announcements would be made during the conference. What Blizzard did announce at the show was a new mobile game called Diablo Immortal; fans weren't happy and booed the Diablo team during the announcement. The fan backlash against the game was strong enough that Activision Blizzard's stock price was impacted.

Post BlizzCon backlash, shares of Activision Blizzard dropped 7% on Monday closing at $64.34, down from the previous day's closing price of $68.99. An investor note penned by research firm Cowen & Company believes the decline in stock price was due to spooked investors that fear Activision Blizzard may be out of touch with its core audience. The note read, "Blizzard severely miscalculated how their fans would respond, which suggests they aren't in touch with their players as maybe they should be."

There are still lots of unknowns surrounding the Diablo Immortal mobile game; one of the biggest is that Blizzard hasn't announced if the game will be a free-to-play or paid title. Blizzard is working with NetEase on the development of the game, and NetEase is known for free-to-play games. If it is indeed free-to-play, odds are the game will be supported by microtransactions, something that will likely annoy detractors of the game even further. 

The report also raised concerns about the control scheme for the mobile game noting that it might feel clunky to a Western audience, but feel normal to gamers in the Chinese market. It is speculated that Blizzard might have avoided the decline in stock price, and angering fans if it had simply offered a teaser or glimpse at Diablo 4, which it said is still in development. Blizzard maintains that it had never intended to talk about Diablo 4 at BlizzCon and that no announcements were pulled from the show.