How Star Wars: Episode 7 Could Hurt Activision Blizzard

By Markets Fool.com

Star Wars: The Force Awakenswill open in theaters on Dec 18.

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Sometime around then -- perhaps a week or two before -- Electronic Arts will launch Star Wars: Battlefront, a first-person shooter video game set in the Star Wars universe. Battlefront is being developed by Electronic Arts' DICE studio, known primarily for its work on the popularBattlefield franchise.

Battlefield has long stood as the chief rival to Activision Blizzard's Call of Duty series. Despite facing tough competition from Electronic Arts over the years, Activision's titles have continued to generate billions in sales.

Yet, Star Wars: Battlefront represents a unique challenge, one that should not be discounted by shareholders.

Riding a wave of Star Wars hype
Electronic Arts' management has said it plans to promote Star Wars: Battlefront aggressively, leveraging the power of the Star Wars cultural phenomenon to drive sales.

By the time Episode 7 debuts in theaters, it will have been more than a decade since the release of a Star Wars film. Anticipation should be high -- Disney paid $4 billion for a reason -- and it could be contagious, particularly among avid video game players.

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Star Wars has served as inspiration for dozens of video games over the years, and many of them have proven to be quite popular. Star Wars: Battlefront is itself a reboot of a game originally released in 2004, one that sold roughly 3 million copies and earned a sequel.

If nothing else, the latest incarnation of Battlefront should benefit from a general interest in Star Wars sparked by the release of the film. It's also quite likely, however, that the game will be well-received: As a studio, DICE has a strong track record, with several critically acclaimed games under its belt, including Mirror's Edge and Battlefield 4.

Call of Duty may be facing franchise fatigue
It's entirely possible that gamers could purchase both, but Activision's next Call of Duty could lose some sales to Battlefront. Released around the same time, and in the same genre, the games are likely to compete for the same sort of gamers.

Already, Call of Duty is showing some signs of franchise fatigue. The latest installment -- Call of Duty: Advanced Warfare -- was 2014's single-best selling game, but demand for the series appears to have peaked. Yet, Activision has a plan to reinvigorate the series: Treyarch.

Although all Call of Duty installments bear a similarity, Activision uses three different studios to create the series. Treyarch is making 2015's installment, which could result in a quality entry. Treyarch's past Call of Duty games -- particularly Black Ops and Black Ops II -- have been among the game's best received. The studio should additionally benefit from a three-year development cycle -- only the second Call of Duty game to do so.

Activision has other games to fall back on
But even if Treyarch's magic can't propel Call of Duty in 2015, Activision has other games to fall back on. World of Warcraft and Skylanders remain reliable cash cows, while Hearthstoneand Destiny provide potential upside.

As an Activision shareholder with a long-term perspective, Star Wars: Battlefront doesn't frighten me enough to sell. That said, Activision investors should be aware of the threat, and perhaps be willing to ride out a bumpy winter if Battlefront, does, indeed, steal Call of Duty sales.

The article How Star Wars: Episode 7 Could Hurt Activision Blizzard originally appeared on Fool.com.

Sam Mattera owns shares of Activision Blizzard. The Motley Fool recommends Activision Blizzard and Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.