Activision Blizzard revenue dips slightly, but World of Warcraft’s Battle for Azeroth did well

    
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It’s probably a good thing for Activision Blizzard that its third quarter financials cut off at the end of September, given that its stock took quite a tumble following its confusing messaging at BlizzCon this week. The investor report was indeed released today, and the company’s revenues of $1.51B for the quarter are actually down compared to the same quarter last year, in spite of the launch of World of Warcraft’s expansion, which performed more than well, though of course we’re getting only vague monthly active users counts across all titles and only confirmation of the 3.4M units initially sold as announced this past summer.

“Activision Blizzard had 345 million Monthly Active Users (MAUs) in the quarter. […] Blizzard had 37 million MAUsC in the quarter. World of Warcraft: Battle for Azeroth set a new day-one franchise record with more than 3.4 million units sold-through. World of Warcraft engagement grew strongly quarter-over-quarter. Hearthstone recently surpassed the 100 million life-to-date registered player milestone. […] Destiny MAUs grew quarter-over-quarter and year-over-year, driven by the launch of Forsaken and reach initiatives for the base game.”

Notably, during the investor call, the company admits Destiny 2 didn’t quite perform to expectations, which you might have suspected given that Bungie is basically giving it away for free.

Source: Activision
Update 11/9
ActiBlizz stock continued its plummet yesterday, falling 10% on the news. Yikes. Thanks, Luvly!

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Bannex

Isn’t the day one record just because this was the first launch that happened globally at the same time?

I guess I never paid attention to how day 1 metrics are calculated

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john lavallee

Congrats Blizz!
Your stock just hit the 52 Week low. Lookie there, can’t make numbers and piss off your consumer base; investors will take note.

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Mallus

People have often said the only thing that will kill WoW is WoW itself, it looks like that beginning to happen.

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Teh Beardling

Id be curious to know how well BfA is doing now. I feel like it initially sold well because people were still high off of Legion. Current consensus everywhere seems to be that BfA is well, not great and numbers are dropping off quickly. I know all my friends who played it quit within a few weeks. I only made it one :(

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Armsbend

sorry but i dont know where else to stick this but I want some people to know: Civ V the complete collection is $0.82 on steam right now. 82 flippin’ cents!

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Denice J. Cook

What!? OMG! *runs off*

*runs back here*

Thanks, Armsbend!

*runs off again*

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Dug From The Earth

Its cheap, but i think its 82 cents for you because you own a lot of the game DLC already.

Its $3.29 for me.

Its a 67% off sale regardless… very good deal for a very good game bundle

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Armsbend

Hrm…you are probably right. I do own a good deal of the dlc. Still really cheap though methinks. Have fun all!

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Schmidt.Capela

75% off here. The same for Civilization Beyond Earth, while Civilization VI is 67% off for the game and 33% off for the DLC.

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Dug From The Earth

Ive always been a strong blizzard supporter.

However, those days are quickly fading

Its quite evident that “Blizzard” (at least the guys who wanted to make great games for gamers) isnt really in charge anymore (probably havent been for awhile). Its clear that the ONLY driving force behind the company now is pure profit. Not profit from making a good, fun game, but profit from targeting the most profitable market demographic, even if it means making a crap game, and shoving your existing fans to the side.

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seculaparsec

Agree 100%

AND you could say this about Bioware too

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Armsbend

Bioware isn’t really in charge of themselves any longer like Blizzard though.

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Tim Johnson

Blizzard was actually doing pretty good they were up from last year, though not as up as they have been in the past for an expansion launchs. Activision is down about 400million from same quarter last year, but that can probably be partially explained by destiny 2 crashing pretty good. king is about 20kish down but prepping for a q4 launch of a new title.

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Danny Smith

Doing well or Did well?

also: “fan’s reactions at BlizzCon confirmed Diablo Immortal will be well received by players around the world.”

Do they think the shareholders are stupid and/or didnt hear about blizzcon?

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Jokerchyld

If you think about it, they are saying the PC Diablo crowd may not have liked it but the game itself will sell well at their targeted demographic. The people who will play this game on cell phones don;t care about the same things the blizzcon crowd does.

From a financial standpoint the stakeholders need to understand that.

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Armsbend

Almost 100 million fewer MAUs than last year. Losing ONE HUNDRED MILLION PLAYERS. An absolute disaster.

https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-better-expected-and-record-first

^^^2017 MAUs over 400M

On the call they said they plan on moving more Blizzard games to mobile. That’s their great plan. ActiBlizz is planning on coasting old titles like SE. Dumpster fire I love it.

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Sorenthaz

Yeah apparently they said they have some of their best developers on mobile games now…

…Which probably explains why it feels chunks of Blizzard are falling apart.

Like some teams still seem pretty dang passionate and caring. Jeff “from the Overwatch Team” Kaplan and then the “Classic” team that’s currently working on Warcraft 3 Reforged both seem to care quite a bit still about the players etc. WoW seems to only when there’s enough backlash.

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Armsbend

They really are a rubberband company. They push and push their playerbase until they get fed up and then it SNAPS! back to the old ways. I’m not sure they care any longer we’ll see I suppose.

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Tim Johnson

If you are going to compare, compare apples to apples. Grab the 3rd quarter not the 1st of 2017. Also, Activition Blizzards has some great breakdownsof where the MAU are from the 3 main business segments. Blizzard is only down about 5MAU, which is across all their games, Activision is dead even, King enterainment is down 130Maus. Which makes sense because King had litterally just launched their new title in the begining of q4, so they will likely go up again.

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Tim Johnson

Whoops let me correct myself, i noticed while closing things i’d opened up 2016 not 2017. They are only down 40mau from q3 2017, Again, mostly king, though activision is down about 3mau, blizz is still only a 5mau loss which is shocking q3 2016 to q3 2017, blizz was stable at 42mau.

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Armsbend

Even though I really don’t see it as an orange to apples scenario it’s still a significant dropoff – but more alarming is the lack of a real pipeline imo. COD is not included on this call – but the game, no matter what Kotick or the people who will point you towards twitch, isn’t lighting the world on fire – according to what I’ve read. The numbers next ER will be the real deal of course for that.

Tomorrow will likely be a really rough day for the already beleaguered stock.

I think it will usher in some change for the company – it could be a good thing – for gamers not long positions.

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Tim Johnson

It is though. If you are going to compare financials Y/Y you need to do it from the same quarter in order to take into effect potential seasonal shifts. q1 vs q3 is going to have a lessened COD effect since COD is in death throws by q3 since new game hits q4.

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Armsbend

Point taken. 384maus Q3 2017 vs. 345 today. 40M – not as significant but still very troubling.

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Schmidt.Capela

Isn’t the total number of people playing online increasing? If so, this signals an even larger erosion of their market share.

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Armsbend

I don’t think I’ve ever seen any hard metrics on that number. I imagine it would be true but it would just be a guess.

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Tim Johnson

Right, And 30 of that 40 is from King entertainment. Unfortunately i have not done a terrible amount research on King to see what this history is like around the launch of a new game, but q3 ends right before they launch a new title. If it’s anything like other games, it’s not outside the realm of possibility that this 30mau is inline w/ those types of predictions.

When reading into what they talked about, it sounds like They expected Forsaken to be a taken king, but it ended up “flopping”, even with the improvements to the game. My guess is that next year there will either not be an expansion so Bungie can put more focus on destiny 3 or that next years expansion will Not be anything major for same reason.

I’m guessing that the early COD #s are also worrying so they are starting to temper expectations. IMO, this makes sense, There is some heavy heavy brand fatigue w/ COD, and has been for a few years. My guess is that Activision is going to need to start to look for something new for the brand, because they kinda need to.

Blizzard is actually the least worry some of the 3 segments. As much as people are hating on it, DI is going to print money.

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Utakata

An absolute disaster is what I would call this Presidency. Perhaps just a disaster…to which I am sure Blizz has suffered far worse. (Like to have seen those MAU’es numbers during Warlords tenure, for example. /squeak) So if it’s something they can pick themselves up from again, then it’s not an absolute yet. :)

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Armsbend

That is a pretty odd injection of politics. Okay.

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Utakata

No, I was just using low hanging fruit as the example to what I determine as absolute disaster versus something that’s just a disaster. I could of used the Hindenburg or the Titanic just as easily I suppose, to avoid some getting testy about it. Not sure that would sound any less odd in the injection though. o.O

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Greaterdivinity

A few other interesting tidbits I’ve seen elsewhere –

BO4 sold 3X the number of copies on PC as BO3. Not sure how it compares to the last CoD, but it looks like the move to release the game on the Blizzard launcher is doing well for them. Curious though, because you’d figure it would be the other way around given that Steam has a far larger reach than the Blizzard launcher.

And despite Destiny users being up QoQ and YoY Forsaken performed below expectations. Sorta interesting but also makes sense – the PC numbers didn’t factor in for Q3 2017 so while they may be low I can see why they’d have more active users now than they did at this point last year even with the troubles (and obviously QoQ with the expansion).

The fact that Forsaken performed below expectations though has me wondering what kind of expectations they had. Because Bungie and the IP have taken a huge bruising over the past year, and while things are much improved after a year of work and the expansion it doesn’t seem to have really made up for how much ground they lost up to this point.

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Danny Smith

I think its pretty clear they were expecting taken king 2: baby we can change, come on back boogaloo and didn’t get it. Hence a wave of ‘invite your friends’ emails and free copies during blizzcon.

I reckon Activision is still under the allusion they just need to find the right formula to get dat halo money and i think anyone without monetary investment knows that ship sailed and this is destiny from now on.

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Denice J. Cook

Destiny 1 is one of my fav games of all time– and I’ve been gaming since Pong in the 1970s. :P

Destiny 2? It was so borked at launch I never even bought Forsaken. Yeah, yeah, the gun slots are supposedly fixed now. That’s good, but A.) it should have been that way from launch and B.) there were a lot of other launch problems, and the game still isn’t as good as Destiny 1 (despite Bungie nerfing it into the ground, but I digress).

Not that I play Destiny 2 anymore, but I hope Cayde 6 lives on in my version. :P

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Armsbend

He said that about PC sales because COD over all sales are flat YOY according to Barron’s. The entire call was Kotick playing a shell game with people much smarter than he is giving them credit for.

Price is reflecting that it is getting destroyed.

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Sorenthaz

For me I bought into BO4 mostly because Blizzard is supporting the PC version now. PC support for Call of Duty games has been utterly dreadful since COD4. They’ve always pawned it off to crappy third party companies that don’t do anything to combat hackers. When I played MW3 for example I could barely get a match that didn’t have someone holding the game hostage with their stupid hacks.

Also I think a big draw for a lot of PC purchases was the fact that it has Battle Royale as a mode. Certain BR streamers on Twitch (i.e. Summit and Dr Disrespect) are playing that as their main thing now since it’s a AAA BR that is bringing in a good number of viewers still.

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SirUrza

Your casual CoD/Madden meat heads don’t know what Steam or BattleNet are. They’re on console and they always will be. Moving from Steam to BattleNet is far less painful for CoD PC players then it would be for CoD Console player to move to PC.

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Armsbend

They sustained lower than consensus guidance (meaning COD is indeed not doing great).

Revenue miss. It was a huge disaster. Some major changes will be taking place in 2019 more than likely.

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Armsbend

gotta verify that one

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Tim Johnson

Given development cycles, 2020 will be more then likely where you’ll see any actual change. 2019 will probably be alot of them trying to spitball what they can or set up where they can.

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Armsbend

I agree. But I think they may rush certain Blizzard titles in order to plug up some of these holes – for better or worse. Like tossing together a half finished D4 with promises of more to come in updates. They seem to be comfortable in removing the hard work from games – evidenced by CoD’s lack of a single player story.