Activision Blizzard (NASDAQ: ATVI) have their earnings for the quarter ended March 31, 2021, and it was another really good three months thanks to the ever-abundant Call of Duty golden goose. Acti-Blizz generated $ 2.28 billion in net revenues in the first quarter (fiscal year coincides with the regular calendar year), more than the $ 2.02 billion the company expected. GAAP Earnings Per Share for Q1 was $ 0.79, above expectations and the $ 0.71 investors expected. Activision Blizzard shares are up about 10 percent after the good report.
Call of Duty is aiming higher than ever
As has been the case for a while, Activision Blizzard is increasingly powered by Call of Duty, driving the Activision segment’s revenue up 72 percent year-over-year. The combination of traditional Call of Duty experiences and the free-to-play Call of Duty: Warzone battle royale was particularly impressive, tripling the franchise’s monthly active users to a whopping 150 million over the past two years. Call of Duty: Black Ops Cold War officially integrated with Warzone in Q1 after a slowdown, leading to a major boost in the former’s sales and a 40 percent year-over-year increase in MAUs. Call of Duty Mobile is also becoming an increasingly important part of the puzzle following the launch of the free-to-play game in China. Call of Duty Mobile has been downloaded more than 500 million times and has generated more than $ 1 billion in revenue since its launch in 2019.
Meanwhile, the Blizzard half of Acti-Blizz is increasingly about World of Warcraft. Positive response to the World of Warcraft: Shadowlands expansion led to a respectable quarter and a 7 percent year-over-year increase to $ 483 million, although MAUs fell from 29 million to 27 million. This slow decline in Blizzard’s player base is unlikely to reverse itself anytime soon, as new Blizzard games such as Diablo IV and Overwatch 2 will be released in 2022 at the earliest. As for Acti-Blizz’s reliable King mobile game division, it continued to mine Candy Crush for sales of $ 609 million.
Call of Duty 2021 details confirmed
Activision Blizzard used its profit announcement and call to ensure that investors will continue to run the Call of Duty gravy train as usual. Following rumors, the company has confirmed that a new premium Call of Duty title from Sledgehammer Games is coming this year, and that the currently unnamed game (likely based on WWII) will be integrated with Warzone. Here’s what Daniel Alegre, Activision Blizzard COO, had to say about the new game (thanks to Charlie Intel for the transcription) …
In particular, we are very excited about this year’s premium Call of Duty release. Development is led by Sledgehammer Games and the game looks great and is on track for the fall release. This is built for the next generation of experience with stunning visuals in campaign, multiplayer and cooperative game modes, designed to both integrate with and enhance the existing COD ecosystem. We look forward to sharing more details with the community soon.
New hires, new higher prospects
Acti-Blizz is also using their recent Call of Duty windfall to expand their development capabilities significantly. They have already opened a new Sledgehammer Games location in Toronto, Canada, and have plans to hire more than 2,000 developers in the coming year, tripling the size of their Call of Duty teams. Needless to say, if these expansion plans come true, Acti-Blizz’s current CoD success could be looked back as a prelude to much bigger things.
Following their impressive first quarter results, Activision Blizzard has increased their FY2021 outlook from $ 8.23 billion to $ 8.37 billion, with a second quarter outlook of $ 2.135 billion. Given Activision Blizzard’s recent run, it seems very likely that they will meet and exceed those expectations.
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