After speaking with a senior executive that specializes in physical distribution of video games, Needham analyst Laura Martin tells investors in a research note that Activision Blizzard (ATVI) physical game sales quotas for its key distributors are about flat year-over-year, even though many gamers download key shooter games at midnight the day of release, adding that demand for physical games from Electronic Arts (EA) is "more spread out," causing FIFA and Madden gamers to wait. Additionally, she says Fortnite negatively impacted store sales of all other titles for 2-3 weeks, "and is not back to normal," and that Activision's eSports strategy with Overload will make more money for the company, but that Electronic Arts' fan-focused eSports strategy will fuel higher game sales and longer life spans playing the games. Further, Martin says the senior executive believes EA's strategy of developing an annuity stream is "a great one," and believes Activision should adopt a similar strategy. Martin keeps a Buy rating and $80 price target on Activision Blizzard shares.

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