Activision Blizzard Earnings and Revenue Higher with Diablo, Call of Duty and Candy Crush

Video game publisher Activision Blizzard reported better than expected third quarter earnings after the close Monday and updated on a pending acquisition of the company by Microsoft Corporation ($MSFT). Activision Blizzard ended the third quarter with 368 million monthly active users with its segment seeing revenue up double-digits thanks to the launch of “Diablo II: Resurrected” and “Diablo Immortal.” Released in October “Call of Duty: Modern Warfare II” was the fastest-selling title in the history of the franchise. $ATVI saw growth from World of Warcraft Classic and core games include Overwatch, Call of Duty, and Candy Crush mobile games.

Call of Duty Modern Warfare 2

Activision Blizzard Q3 2022 Earnings

Highlights

  • Non-GAAP earnings per share of 68 cents, beating estimate of 50 cents per share
  • Net revenue of $1.78 billion.
  • Net revenue from digital channels was $1.61 billion.
  • Net bookings $1.83 billion, beat estimate of $1.69 billion,
  • In-game net bookings for the third quarter were $1.36 billion.
  • Ended the third quarter with 368 million monthly active users.
  • Blizzard segment saw revenue up double-digits thanks to the launch of “Diablo II: Resurrected” and “Diablo Immortal.”
  • King business line net bookings up 8% year-over-year, with Candy Crush franchise highlighted as the catalyst.
  • The original Candy Crush game has over 200 million monthly active users and is nearing its 10-year anniversary.
  •  “Overwatch”, which launched in 2016, saw a year-over-year increase in engagement.
Activision Diablo Immortal

Stock Market Reaction

  • 52wk High 86.90.12
  • 71.25▲ +0.15 (0.21%) After Hours 
  • 71.25▲ +3.27 (+4.82%) Past year
  • 71.25▲ +7.9 (+12.5%) Past 5 years

Outlook

Since the end of the third quarter,

  • Activision Blizzard released the highly anticipated “Call of Duty: Modern Warfare II” on Oct. 28. The game broke company records as the fastest-selling title in the history of the franchise.
  • The game became the fastest Call of Duty release to pass the $1-billion sales mark and has seen PC sales around twice the level of recent titles in the franchise. Hours played in the first 10 days of the game’s release were up 40% over prior franchise records.
  • The company also highlighted the launch of free-to-play “Overwatch 2” in October, which led to higher engagement for the game.
  • A highly anticipated “Diablo IV” game from Blizzard is planned for a 2023 launch and progressing well, according to the company.

“We expect to expand our global audience, deepen community engagement, and deliver renewed growth in player investment in the fourth quarter and beyond.”

Company guidance is for fourth-quarter GAAP revenue to be down 5% year-over-year. Fourth quarter bookings are expected to be up 20% year-over-year.

Gaming has many components, investors and game makers alike realize its games aren’t always winning this battle, hence the stock price volatility in this sector. The earnings call focus on the launch and plans of games and an update on the health of the gaming industry. Fortnite shook the whole industry up with its off the charts success. Given you can only play so many games, the sucking up of gaming hours by Fortnite has affected all the competing gaming companies. When you are playing Fortnite you are not playing Activision Blizzard titles like Call of Duty and World of Warcraft or mobile games from King. The question is how much, and for how long? 

Microsoft Update

Activision is being acquired by Microsoft for $68.7 billion, or $95 per share.

“We look forward to continuing to release epic entertainment in service of our global community of players as a part of Microsoft, one of the world’s most admired companies,” Kotick said. “We continue to expect that our transaction will close in Microsoft’s current fiscal year ending June 2023.”

Source: ATVI, TradersCommunity,

From The TradersCommunity News Desk