Activision: Pulling the Joystick into High Gear

With a big video-game hit of its own and new console systems about to lift the industry, the software developer is hot -- and so is its stock

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March 13, 2001 at 5:00 AM UTC

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When Activision (ATVI ) introduced Pitfall for the Atari 2600 game system way back in 1982, the video game sold well over a million copies and put the fledgling company on the map. In the nearly two decades since then, the company has had some successes but nothing to rival its first big hit -- until now, that is. These days, Activision is riding its hottest title ever, Tony Hawk's Pro Skater, and the sequel, which together have sold more than 4 million copies. That, plus the growing excitement over new video-game console systems, such as Microsoft's Xbox and Nintendo's GameCube, have given the developer of video-game software some hot prospects.

Investors have taken notice. While the overall stock market has been slowly going down the tubes this year and most tech stocks have been twisting in the wind, Activision's stock has been racking up impressive gains, with a 60% advance year-to-date. It currently trades at around $24, just a tad below its 52-week high. One reason: Activision -- the No. 2 developer of video-gaming software, sandwiched between industry leader Electronic Arts (ERTS ) and THQ Inc. (THQI ) -- is the only major player to double its market share in 2000.