Activision Blizzard Q3 financials: Blizzard revenue up 20% as Destiny 2 ‘underperforms’

Activision Blizzard released its Q3 2018 (ended on September 30th) financial results and reported revenues of $1.51bn (£1.16bn). The firm expected revenues of $1.49bn so it’s up compared to its prior outlook but slightly down year-on-year as it made $1.61bn (1.24bn) during Q3 2017.

In the earnings call (as transcribed by Seeking Alpha), the exec team mainly focused on the good performances of its key franchises, Call of Duty, World of Warcraft and Candy Crush. CEO Robert Kotick said that on average 345m people people played Activision, Blizzard and King’s games each month during Q3, with an average of 52 minutes per day. Breaking down this figure, the firm said Activision’s monthly active users were 46m, Blizzard’s MAU reached 37m and King’s MAU were an impressive 262m.

COO Coddy Johnson explained that Activision’s MAU were “up sequentially from Q2” thanks to the good performance of Destiny 2’s expansion Forsaken, launched on September 4th. However, Forsaken actually performed below the firm’s expectations, he continued: “Now while Forsaken is a high-quality expansion with strong engagement and new modes of play, it did not achieve our commercial expectations, and there’s still work to do to fully re-engage the core Destiny fan base.”

Mentioning Call of Duty, CEO Robert Kotick said that, as a franchise, it’s now “generated more revenue than the Marvel Cinematic Universe in the box office, and double that of the cumulative box office of Star Wars.” About Black Ops 4 specifically (which launched after the Q3 report closed), Johnson added: “Unit sell-through after the first three weeks is pacing ahead of Black Ops 3, PC sell-through more than 3 times higher, and with significant shifts to full-game downloads. Total active users in the first three weeks are up 16 per cent over Black Ops 3, with strong growth across all modes, and engagement and hours played is up over 20 per cent versus Black Ops 3. So it’s worth underscoring that given Black Ops 3 generated more in-game net bookings than any other Call of Duty title, this level of engagement in Black Ops 4 should result in strong in-game revenue in Q4 and into 2019.”

Breaking down the revenue by company, CFO Spencer Neumann revealed that Activision’s Q3 revenue reached $397m (£305m), with the “key contributors [being] Call of Duty digital in-game revenue and Destiny 2: Forsaken, although the latter underperformed [their] expectations.” The operating profit of $112m (£86m) was down year-on-year, he continued, as Q3 2017 included the launch of Destiny 2 and “continued benefits from the Q2 2017 release of Black Ops Zombies downloadable content and Crash Bandicoot.”

Meanwhile, Blizzard has been performing extremely well, with revenue up 20 per cent year-on-year thanks to the launch of World of Warcraft: Battle for Azeroth on August 14th. The expansion broke a record by selling 3.4m units on Day One.

With King revenue down 4 per cent year-on-year and operating income down 12 per cent year-on-year, it seems like Blizzard is the driving force for the whole company.

Last but not least, Johnson touched upon the Diablo Immortal drama and seemed confident it’ll be received well at launch: “[Diablo Immortal] will bring this tenfold franchise to a mobile audience in both the east and the west. While fan reaction was muted to the announcement, players’ hands-on experience with this content confirmed what we believe, which is that Diablo mobile will be a very well received game when it releases, and players around the world will love it.”

Blizzard co-founder Allen Adham announced yesterday that despite the Diablo Immortal backlash, the developer is looking at bringing more games to mobile devices.

About Marie Dealessandri

Marie Dealessandri is MCV’s former senior staff writer. After testing the waters of the film industry in France and being a radio host and reporter in Canada, she settled for the games industry in London in 2015. She can be found (very) occasionally tweeting @mariedeal, usually on a loop about Baldur’s Gate, Hollow Knight and the Dead Cells soundtrack.

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