So here we are in 2020, looking back at the last quarter of 2019 for Blizzard. Nothing big happened or anything, just a massive political scandal that saw a widespread boycott of the company, a terrible nonpology, a BlizzCon that showed little on the immediate horizon beyond World of Warcraft’s next expansion, just two sequels far in the future. OK, so maybe a few things happened.
Readers will recall that exactly a year ago, the company saw record-high revenues and promptly laid off 800 employees, heralding a revenue plummet in May and again in August and then still again in November, which marked the third straight quarter of revenue drops for the corporation. The best news out of the November 2019 investor report was the revelation that WoW Classic had driven “the biggest quarterly increase to subscription plans in franchise history,” though SuperData’s subsequent revenue analyses showed WoW trending down in more recent months. The nicest thing reps and analysts could say was that ActiBlizz beat its rather low expectations for the period. Ouch.
So here we are checking up on Q4 of 2019, October through December, well past the launch of WoW Classic. If October’s Hong Kong drama in October or November BlizzCon impact were going to show up in the numbers, it’d likely be in this report. Our speculation from the MMO perspective has generally been that we’d not see a big shift either way, and of course we won’t see any fallout from WoW’s messy Visions of N’Zoth patch or the Warcraft 3 Reforged disaster, though we may see a spike from December preorders of the latter. So how did they do?
As it turns out, Activision-Blizzard had yet another down quarter with revenues down once again, this time down 16.7% compared to the same quarter last year. Even so, the company (also once again) calls it a better-than-expected quarter, this time thanks to COD, though at least it’s better than Q3.
“For the quarter ended December 31, 2019, Activision Blizzard’s net revenues presented in accordance with GAAP were $1.99 billion, as compared with $2.38 billion for the fourth quarter of 2018. GAAP net revenues from digital channels were $1.44 billion. GAAP operating margin was 23%. GAAP earnings per diluted share were $0.68, as compared with $0.89 for the fourth quarter of 2018. On a non-GAAP basis, Activision Blizzard’s operating margin was 30% and earnings per diluted share were $0.62, as compared with $0.90 for the fourth quarter of 2018.”
MMO players and watchers of Blizzard’s games rather than Activision specifically will want to zero in on this part. MAUs – that is, monthly active users across all of Blizzard’s games – are down to 32M, a loss of 1M since last quarter, a loss of 3M since this quarter last year, and a net loss of 5M since Battle for Azeroth came out. Yes, Blizzard intentionally obscures playerbase size across all of its games to make it hard to figure out how well any one game is really doing, and Retail WoW and WoW Classic are smushed together too. For reference:
38M in Q1 2018
37M in Q2 2018
37M in Q3 2018 (BFA)
35M in Q4 2018 (mass layoffs)
32M in Q1 2019
32M in Q2 2019
33M in Q3 2019 (WoW Classic)
32M in Q4 2019 (Blitzchung)
We’ll update with more as the conference call gets underway.
- Blizzard says it “doubled” the WoW community with the addition of WoW Classic over the last half of 2019, with a subscriber base “well above” actual Vanilla levels. It does not actually claim that the subscriber base stayed that high, of course.
- A decline for Diablo and Hearthstone franchises is pointed out. Diablo Immortal hits “regional” alpha testing mid 2020. Reps mention showing the game at BlizzCon (it didn’t actually do any panels on it, you’ll recall).
- In response to an analyst question about WoW Classic retention and whether Blizzard had held onto it, a Blizzard rep once again reiterated the doubling of the playerbase and says engagement with Classic has been particularly strong in the East. It’s a bit of a non-answer and most of the airtime was spent on re-explaining the fact that the playerbases are counted together.
- In response to an analyst question about the Warcraft 3 Reforged debacle, Blizzard says it’s committed to supporting the game and community. Again pretty much a non-answer.