Activision Blizzard was probably hoping for cheers from gamers when it unveiled a new mobile app in its important Diablo franchise. That didn’t happen, and now Wall Street is more skittish about the company.

The news came Friday at the company’s BlizzCon conference: The company is working with NetEase, a Chinese developer, to produce Diablo Immortal. Gamers were apoplectic, putting a flurry of negative comments on the YouTube page that showed the trailer. As of midday Monday, the trailer for Diablo Immortal had 430,000 down...