Activision-Blizzard’s Q4 2019 revenues are down YoY for the fourth straight quarter

Blizzard says it doubled the WoW community with the addition of WoW Classic

    
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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.

Updates from the conference call
  • 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.

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April-Rain
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April-Rain

I was a massive blizz fan in the past and would have been bothered about them not doing as well, nowadays i simply don’t care

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Dobablo

I take from that that Classic is doing well (must be for WoW’s sub base at year end to be double that as of the end of June), Switch players have moved on from Diablo, and Hearthstone players were too busy watching streamers play the auto-chess game to actually log in and play for themselves.

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Sarah Cushaway

Good. Maybe it will teach them to a) stop putting out garbage crapping on a dedicated fanbase and b) stop bowing to Chinese dictators.

Techno Wizard
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Techno Wizard

Free Hong Kong!

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Munchmeat2

Make fun games again and stop focusing on freaking e-sports that is what will turn things around for Blizz.

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Danny Smith

b-but running the next game into the ground to force the esports meme will be the one to finally get us all those doter and brood war bux we missed out on, 27th times the charm!

Reader
Josh Grischkat

The title and content of the article seems to be misleading, intentionally or not. It didn’t specify that the wow community doubled because of classic, just that it exited the year with double the subscriber count (note this was coming up with the release of 8.3 as well, which no doubt drew people back, regardless of the overall opinion of the patch once it released.)

Though I suppose that doesn’t quite fit the narrative does it?

Alyn
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Alyn

Josh let us watch the financials as the year goes by. I’m going to predict that WoW Classic will have a much less impact on the overall sub numbers. Warcraft III was one of the worst disasters to happen at Blizz, this will show up eventually in the “numbers”.

Anyroad, the upcoming HYPE train for Shadowlands is incoming and that CGI extravaganza almost always pulls in a few. We shall see, won’t we? :)

Carlo Lacsina
Staff
Carlo Lacsina

I love how you said anyroad. Aside from me, you’re the only person I know that says that!

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TherecDaMage .

Looks like the boycott really worked. Their stock is tanking and investors are pissed. People are abandoning WoW in the millions. It’s over guys. It’s over.

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James Crow

blizzard making a game once in few years so the revenues down is predictable, still the have wow and getting more income then other b2p game bc ppl still paying for p2p.

so this things are not really matter and we going to see them going up with OW2 and then decline until D4.

and Activision have Cod Once a year.

so no matter what the company is safe for good and worse.
also if the rumors about Cod MW BR going to be Free to play its mean they going up cuz this game going to bring alot of Cod and BR fans.

im more interested to see how the mmo companies doing and look like most of them not doing well beside maybe wow/ff and eso.

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Aiun Tanks

Yeah, well, here’s hoping they get worse. Get worse and straight-up crater as a way of signalling to the broader industry that acting like assholes isn’t as profitable as it has been, or as they think/hope it is.
That’s my hope. I doubt it will come true. In real life, the bad guys always win.

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Ozzie

Just looking at their product line-up, I don’t think their profits will get much worse this year unfortunately. Their entire development strategy seems to be “don’t rock the boat.” Almost all of their games are being safe and convenient. Zero risks with as little innovation as possible. Development isolation, without cooperating or relying on anyone else (D:Immortal aside, I guess). I’d expect them to go downhill but the bleeding staunched by making completely safe, conservative bets. Who knows how long they can do that, though. I hate, hate using the term “milking the cash cow while they can”, but that’s exactly what’s going on here.

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Bruno Brito

We honestly don’t know that. Their playerbase seems to be a bit on edge lately, so i’m willing to bet that Shadowlands will need to at least pull some weight.

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Ozzie

Just my interpretation of their strategy, from the outside looking in. I think they’d agree with you on Shadowlands, seems to be the cornerstone of their plan. Which is why it has as basic of a feature set as possible. Personally, I’m getting some Cata vibes from the leveling re-design…

Mordyjuice
Reader
Mordyjuice

The level resigned was an atrocious mistake, they should have just did what Zenimax did with One Tamriel, play where ever you want with automatic level scaling so if you’re some one like me that actually enjoys playing content from start to finish when leveling an alt it doesn’t feel like a train wreck experience.

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Bruno Brito

Don’t expect Blizzard to pull a damn feature from other games without trying to mess with it first. They fucked up the GW2 leveling style. They fucked up HotS because they wanted it to be a simplified LoL and didn’t realize how taking one currency off ( gold ) unbalances the entire moba.

Everything Blizzard does is ripping off an idea and “improving” on it. There’s a reason why TF2 players find themselves extremely bothered with OW, because TF2 is a game that has a huge ammount of freedom, while OW doesn’t, because of design.

I’m interested in how Shadowlands will come out, but yeah, cata vibes.

Mordyjuice
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Mordyjuice

Can’t blame them considering BFA’s last content patch was cut from the time table because their staff isn’t big enough to develop patches in times; same damn reason why WC3R was released in the state it was in. All this makes me doubt the quality of WoW’s upcoming expansion and D4.

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Munchmeat2

That is how I feel about WoW. WoW has become like the most generic MMO on the market. I don’t know why people still shovel money at this game?

Alyn
Reader
Alyn

Oh Blizz 2020 second month here we go-