Activision Blizzard

  • Videogame-producer Activision Blizzard is known for popular franchise titles like Call of Duty, World of Warcraft, Overwatch, and Candy Crush. The company reported revenue of $1.52 billion, which came in above analysts' estimates of $1.32 billion. Operating cash flow came in at $148 million on an operating margin of 40%. Adjusted earnings per share was $0.76, double what analysts had expected. The company also saw Monthly Active Monthly Users increase to 407 million in the period.

  • The performance was mostly driven by higher in-game spending, as the company's flagship titles saw increased player activity during the quarter. The lockdown restrictions, imposed by nations on its citizens, were a boon for the company in the period. The higher levels of user engagement led to an increase in total in-game spending of 20% year-on-year, totaling $956 million, or 63% of total revenues. 

  • The company also managed to transition its entire workforce to work from home with relative ease, and without interrupting game development or operations. 

  • The company has three main business segments, Activision Publishing (which is console games), Blizzard Entertainment (PC games), and King (mobile games) – with each division contributing around a third to total revenues. 

  • The Activision segment had revenue of $519 million, up 64% year-on-year. Operating profit for the segment came in at $184 million at a 35% operating margin. Activision boasted 102 million active users in Q1, driven by its Call of Duty series, which had strong sales of that titles’ premium content, Call of Duty: Modern Warfare, as well as Call of Duty’s mobile version. The latest title in that stable, Call of Duty: Warzone, was launched in early March and has already been downloaded by over 60 million players.

  • The Blizzard division saw revenue rise 31% year-on-year to $452 million. Operating income for Q1 was $197 million at an operating margin of 44%. The number of active users came in at 32 million for the period. Strong growth in the quarter was seen in World of Warcraft and World of Warcraft III: Reforged (which was released in the period). 

  • The King segment, which is known for its mobile game Candy Crush, contributed revenue of $498 million, which was lower than a year ago even though the advertising arm grew more than 75% year-on-year. Monthly Active Users totaled 273 million users, and operating profit came in at $156 million on an operating margin of 31%. Margins fell year-on-year due to lower revenue and higher operating costs (as it invested in expanding its player networks). 

  • Despite the current environment of uncertainty Activision Blizzard issued full-year guidance up 8% over 2019. When asked in the conference call whether this quarters’ performance could continue, the chief executive said that even though the future is unclear, recent trends in Asia are promising (despite the easing of restrictions in that region somewhat). 

  • Due to the impacts of Covid-19, the company has changed its first ever professional Call of Duty League, and the third season of its Overwatch League (both eSports tournaments) to take place online.

  • According to Newzoo, global esports revenues will grow to $1.1 billion in 2020, a year-on-year growth of 15.7%, up from $950.6 million in 2019 – thanks to media rights and sponsorships. The total global esports audience will grow to 495 million people in 2020, a year-on-year growth of 11.7%.

  • The company also announced that it would cover all Covid-19 costs of affected employees and their families – and that it would increase access to tele-health services and private doctors in areas where their employees live and work.

Activision Blizzard