Why a "Monsters U" Hit Is Bad News for Activision Blizzard

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Animated monsters trounced realistic zombies at the box office this weekend. Disney's Pixar film, Monsters University, took in over $80 million to best Paramount's World War Z thriller. Incredibly, Pixar extended its streak of No. 1 movie openings to 14 straight.

And Activision Blizzard can't be happy about it.

That's because the success of the film should give a big jolt to the marketing campaign behind Disney's upcoming video game, Infinity, set to challenge Activision's Skylanders franchise later this summer. With Skylanders, Activision struck video game gold last year, carving out a new genre for children that features toys that players can collect and trade while also interacting with them inside a console game. It was worth more than $1 billion in sales through the end of last year.

And now Disney wants a piece of that action. While the House of Mouse hasn't had much success with its video game division to date, there are good reasons to expect that to change with this Infinity title. Sure, Activision has the first-mover advantage, with an almost two-year head start in this market. But Disney has the major benefit of a deep catalog of characters to pull from that gamers already know well. Add to that the fact that Disney's considerable marketing machine will be behind the game, and nobody should count the title out.

Strong ticket sales for Monsters University only makes things easier for Disney. Characters from the movie will be included with Infinity's starter pack, along with toys based on other Disney hits Pirates of the Caribbean and The Incredibles. And there will be plenty of opportunities for marketing tie-ins between the movie and the game.

For its part, Activision has already said that escalating competition from Disney and other rivals may hurt profits. The company notched $5 billion in sales last year while setting a new record on profit margins. But this year is shaping up to be much more competitive, and the battles begin with Disney's Infinity release in August.

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The article Why a "Monsters U" Hit Is Bad News for Activision Blizzard originally appeared on Fool.com.

Fool contributor Demitrios Kalogeropoulos owns shares of Walt Disney and Activision Blizzard. The Motley Fool recommends Activision Blizzard and Walt Disney. The Motley Fool owns shares of Activision Blizzard and 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.

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