Activision Blizzard's Latest Gamble

Activision Blizzard's (NAS: ATVI) latest attempt to revive its stagnant World of Warcraft franchise is enlisting panda warriors to join the multiplayer online-gaming experience. Really?

Mists of Pandaria -- the platform's new expansion pack that hits the market tomorrow -- makes no bones about introducing the ability to play as a battling panda. The game will still have plenty of the fierce creatures and engaging levels that die-hard gamers have enjoyed, but there have to be plenty of gamers wondering what the world's largest video game publisher is doing putting martial-arts-savvy pandas front and center.

After all, doesn't Mists of Pandaria seem more like a Kung Fu Panda sequel out of DreamWorks Animation (NYS: DWA) than a World of Warcraft expansion pack? If one didn't know any better it would seem as if Activision Blizzard is trying to woo younger gamers to the franchise by appealing to groundwork that DreamWorks Animation has done with its Jack Black-fueled animated feature film series.

Then again, it's not as if you can blame Activision for taking a gamble. The franchise peaked with 12 million gamers two years ago, but it has gone on to shed a quarter of its users.

Activision has responded by making the first 20 levels "free to play" to hook new gamers. It gave away copies of Diablo III to get players to extend their subscriptions. Why not bring in fighting pandas, especially since so many of its gamers these days are in China courtesy of its licensing arrangement through (NAS: NTES) ?

Investors feared that World of Warcraft would get some serious competition late last year when Electronic Arts (NAS: EA) rolled out Star Wars: The Old Republic, but both franchises are struggling these days.

Are consumers tiring of these rich virtual worlds, or are they simply losing mainstream gamers to the simplistic charms of social and casual games supplied by Zynga (NAS: ZNGA) ?

Activision won't have time to lick its wounds if Mists of Pandaria fails to breathe renewed interest into its flagship franchise. It should bounce back in November when Call of Duty: Black Ops II arrives. That's what you would call reinforcements, as unlike World of Warcraft, Activision continues to set records with every annual installment in the Call of Duty franchise.

For now, sit back and see whether Activision Blizzard's gutsy gamble with panda warriors pays off.

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