Activision (ATVI) is down nearly 13 percent after hours. How is a poor quarter a surprise? Call of Duty did well in the quarter. That was not the problem. Skylanders SuperChargersand Guitar Hero Live faced some competition and underperformed. For the first quarter, Activision guided earnings well-below consensus. $0.11 per share compared to the 0.18 per share consensus. $1.75 per share is the yearly EPS forecast. This implies ATVI's stock is too expensive at this time. KING adds to TAM - addressable market - but not earnings. Freemium titles might need to get cut, or R&D spend reduced. This will hurt KING. For now, Candy Crush may make money but trends change. When the gamers stop playing the Crush series, they will move over to Glu Mobile (GLU) - Hold, not Zynga (ZNGA). Zynga fell 15 percent today after reporting quarterly results.