It’s now pretty clear that Activision-Blizzard’s days of limitless growth and endless record-setting are over, at least for now, as the company’s now-released financials indicate revenues down slightly (about 7%) compared to this same quarter last year and down significantly (over 23%) from its record $2.38B showing for fourth quarter 2018. Generally, we’d assume seasonal sales in Q4 exacerbated that gap, but the same period last year saw less than a 5% drop (Q4 2017 was $2.04B; Q1 2018 was $1.97B), thanks to Destiny 2 and stronger Overwatch performance and WoW expansion sales at the time. In fact, the best thing the company can say this round is that it outperformed expectations for this first quarter and “made progress against the plan outlined in [its] February earnings call to reinforce the foundation for future growth.”
“For the quarter ended March 31, 2019, Activision Blizzard’s net revenues presented in accordance with GAAP were $1.83 billion, as compared with $1.97 billion for the first quarter of 2018. GAAP net revenues from digital channels were $1.39 billion. GAAP operating margin was 31%. GAAP earnings per diluted share were $0.58, as compared with $0.65 for the first quarter of 2018. For the quarter ended March 31, 2019, on a non-GAAP basis, Activision Blizzard’s operating margin was 41% and earnings per diluted share were $0.78, as compared with $0.78 for the first quarter of 2018.”
In its investor report, Acti-Blizz reiterates that it’s “increasing development for [its] biggest, internally-owned franchises, for both upfront releases and in-game content, as well as investing in platform expansion on PC and mobile and new geographies” – including esports. Blizzard itself counted 32M monthly active users for the quarter – that’s down from 35M last quarter and down from 38M in Q1 2018 as well.
Readers will recall that Acti-Blizz’s record-setting previous quarter was contentious indeed, as executives followed it up by slashing hundreds of jobs across the company as its stock see-sawed. After-hours trading today shows the stock just a few percent down on the news.
Further reading:
Me and the majority of my old wow guild, comrades in arms, family and even work mates are now firmly rooted in FFXIV with none of us interested in wow anymore or any intention of in going back even for classic which we were excited about and had started to make plans.
WoW is pretty dead to us at the moment and it would take something special to get us to go back, and its just not only the game, its also Blizzard themselves as a company intertwined with Activision and the scumbag known as Bobby KO-TICK just leaves a bad taste in our mouths and we all had 800 reasons to be disgusted early this year, in which we all read about on our mobile phones, Blizzard have lost our devotion and are untrustworthy and like to tell us whats fun instead of listening.
In all fairness FFXIV is pretty simply the best MMO to play right now, and square need a big pat on the back its amazing the amount of work that has gone into the game since the original launch. I just managed to snag a house on the beach on one the fullest servers as well so they is no way I will un-sub.
Since September 2017 Blizzard has hemorrhaged 10 million monthly active users.
Didn’t they sell bungie….. I mean, losing access to all the revenue from destiny, all the other bungie IP games seems like it would account for a lot of the gap.
Not to mention all the income from having the studio buy it’s freedom likely helped to fill the coffers.
The thing about business is there’s ALWAYS an explanation and a story.
They deserve nothing more. Allowing Ion to oversee the development of World of Warcraft and try to turn the game into an esport was the dumbest decision ever.
Ion has been the most disasterous failure of a leader I’ve ever seen for the game. The guy makes Ghostcrawler look like a genious. The changes made to the WoW that stem from this clown’s direction have lost the game millions of subscribers.
Every direction WoW has taken in the latest expansion has been despised by the players by and large. All of my friends have quit playing. I’ve quit playing. Activision-Blizzard deserves to lose money for hiring fail clowns.
Actually whole WoW community met recent BFA changes with open arms.
That’s why they lost 6 millions subs in less than a year
Ya, they lost 6 millions subs (which they didnt) in less than a year because of update that hit the server a week ago. Makes sense /s
Who said anything about an update besides you? Nobody dude. Nobody. They lost six million subs in six months. Sorry it upsets you so much that you are in denial. Wow is dying bro. Lol
Blizz doesnt give sub numbers. So these six millions lost subs is nothing but wet dreams of poor hater that wants it to be true soooo bad. Dream on, boy. If you dream harder, it can be even 8 mil
When even Belular made videos about how grim the situation is, here comes Oleg Chebeneev, WoW connosseur, and lays down the inner workings of Blizzard.
“Everything is fine, nothing to see here” – Said the Russian fellow, while the Vodka in his lapel exploded from the heat that was generated by the huge fire he was in vain, trying to cover with his body.
Everything was in fact, not fine.
By grim situation you mean that WoW still has many millions players and is the most popular sub based MMOs on the market? Doh, thats so grim.
Rest in kill, SuicideWatch.
If you want to know what a business is about, you look at where they spend their money:
Are games their product, or is the stock price?
I would prefer if they repurchased all the stock and went private. Then they wouldn’t have to be so greedy and worry about the stock price or share holders at all. Its the fact these game companies are public that drives them to seek out new underhanded ways to monetize thier games.
Video game studios have no buisness merging with large, publicly traded corporations. Modern day Blizzard and Bioware are what happens when you let suits have control over artists.
Perhaps you missed that last expose on Bioware?
They’ve always needed adult supervision. Unfortunately the past few cycles they’ve not had any at all so their house has been trashed. Recovering from those past several debacles is going to be expensive and that’s not something EA has been known to be real keen on.
True, but suits aren’t the best adult supervision.
“Suits” almost ALWAYS “controlled” gaming. The creative folks make the games, the business folks make sure that the games can/do sell and make money as best they can. Developers are often TERRIBLE at the business side of things, and actually need guidance and support from business folks because they know how to run a business.
There’s a broader discussion to be had on how quarterly reporting for publicly traded companies leads to incentives to prioritize short-term revenue to keep investors happy over longer term plans that are better for a business, it’s a super salient point. But business and creative are two different disciplines that, while often at odds, can and do need to work together to ensure the success of a title and the continued operation of a company.
To be fair, lately, we’re having a wave of the people responsible for the business side being also terrible at business.
So what? Steam has published their sales data recently: there is a huge seasonal sales drop every January and February – and a rise in November and December.
it’s the 7% drop yoy that is more of a concern for investors.
Not really. It is the empty pipeline that is a concern for investors. Only getting a 7% YoY fall considering where they are in the release cycle is quite strong. Investors will be more concerned about future revenues and when the next release will happen.
their stock dropped 5% before market closing, so investors don’t agree with you/
Actiblizz: Good news. Net revenue was fell less than we told you it was going to fall. Bad news, engagement is down and we don’t have any new releases in the pipeline.
fallwind: Share price dropped because revenue fell
lol.
because if everything was as good as you’re pretending it is, they wouldn’t have sold their holdings.
A dip that big is a pretty large indication that investors DON’T think that things are going well and future earnings are worth the current share price, hence they are getting out while the getting’s good.
Exactly. They have lots of worries about future earnings. It’s just that current revenues were already priced in.
Steam is a storefront. Blizzard has 6 titles, half of which are objectively dead and experiencing no significant growth or drop off. So yeah a million players per month every month for 6 months straight is a little more significant when 3 titles are responsible for the overwhelming majority of your userbase and income.
This is specifically addressed in the first paragraph of this article. This is a significantly larger drop than Blizzard has previously seen between Q4 and Q1, in addition to the drop between Q1 ’18 and Q1 ’19.
I mean, we live in a world where making 1.8 billion in a single quarter is somehow spun into a negative thing…?
Yes, capitalism. We need to grow infinitely or we’re somehow doing it wrong. It can’t really work that way but curiously nobody noticed so far.
To be fair, they did. They just milk stuff before looting companies. Suits rarely plan long-term.
“Greed is eternal.” – Rules of Acquisition #10
Bet Blizzard is wishing its 2008 right about now.
2008 was when WoW was still breaking numbers and I believe Starcraft 2 had been announced by then. So yeah I bet they were back to those days for more reasons than just getting that Obama money. :p
I was implying that they wished it was 2008 so that they could get some sweet bail out relief for companies that failed at life.