Activision Blizzard’s Record High In Q1 2018 Financials

‘Tis financial season and Activision Blizzard had a big one, widely driven by World of Warcraft, Overwatch, and Candy Crush. Reporting $2 billion in Q1 revenue and 374 million active users across all games, this is a record high for Activision Blizzard in the first quarter of the financial year.

Activision Blizzard's Record High In Q1 2018 Financials

More specifically, Activision made up $92 million of the company’s operating income, mainly on the strength of Call of Duty. Blizzard made up $122 million of the operating income driven by “in-game content” through all of their games, strong Battle for Azeroth pre-sales which are ahead of plans and likely driven by unlockable Allied Races in World of Warcraft, as well as the Overwatch League which has seen huge success this year with “strong and consistent” viewership every week. King then made up $191 million of the operating income, with Candy Crush particularly “reaching its highest net booking since Q4 2013.”

Battle Royale Likely Coming to Activision Blizzard Titles

During the earnings call, Activision Blizzard were asked about what they had learned from Fortnite and PUBG‘s success, to which Activision COO Coddy Johnson commended the battle royale genre’s “compelling survivor mechanics and large, in-game player pools” and how they have “brought tens of millions of completely new players into gaming both on traditional platforms like console and PC, but also on newer platforms for the genre like mobile.” CFO Spencer Neumann commented that the battle royale genre is “contributing to the innovation and expansion we’re seeing in the industry”, while CEO Bobby Kotick added, “When we see people innovate in an interesting and impactful way, we are very quick to figure out how to capture inspiration from innovation. When we see things that appeal to our audiences, we are very good at being inspired by those.”

We already know that Call of Duty: Black Ops 4 will come with a battle royale mode, but could there be more inspiration taken from this area within Activision’s vast library?

Destiny 2 Looking Glum But New Content Talked About

There was no denying from Activision Blizzard’s Q1 report or the earnings call that Destiny 2 has not reached the level of success expected of it. Johnson offered a view of where they plan to take the game in the future; “The three things we know we’re going to do and that the community is looking for is: make the player more powerful, provide rewards, and make the endgame more meaningful.”

Activision Blizzard's Record High

Overall, Activision wouldn’t reveal any definitive details on the current status of Destiny 2’s player numbers or profit margins, which doesn’t sound all too promising. However, that may be due to change with Warmind’s release next week, also Johnson did make sure to tease a fall expansion bringing many gameplay innovations including one game mode that “introduces a whole new style of play for first-person shooter gaming generally and certainly for the shooter space that Destiny created.” While we don’t have any concrete details on this game mode or the fall expansion for Destiny 2 itself just yet, we get expect to hear more on this during next month’s E3.

 

Our Thoughts

There’s always a lot to take in following this quarterly financial reports, but it seems fairly clear what Activision Blizzard’s record high in this first quarter means for their games. World of Warcraft is recovering nicely with promising sales for Battle for Azeroth, the Overwatch League has been a resounding success, people still spend too much on mobile games, battle royale continues to soar whether we like it or not, and Destiny 2 has some serious work to do if it wants to pull itself back to where it should have been from the beginning. Here’s hoping.

Source: Activision Blizzard Q1 2018 Presentation, GamesIndustry, VG247

 

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