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Activision Blizzard reported that its Q2 bookings reached $1.64 billion, slightly better than analysts were expecting, while earnings are out of line.
The company said its Activision, Blizzard and King divisions all grew in the second quarter compared to the first, and it forecast a strong slate for the second half. Microsoft has announced that it expects its $68.5 billion acquisition of Activision Blizzard to be approved by regulators in the current fiscal year ending June 30, 2023. In after-hours trading, the stock is up slightly at $80.32 per share.
“Our acquisitions this past quarter have further boosted our development resources, including our artificial intelligence and machine learning capabilities,” Activision Blizzard CEO Bobby Kotick said in a statement. “Even in a challenging economic environment, with multiple companies announcing freezes and layoffs, our growth headcount grew 25% year-over-year by the end of the second quarter. We plan to finally release exciting new Call of Duty, World of Warcraft and Overwatch content. Of course, we look forward to closing our pending $95 per share all cash transaction with Microsoft as soon as possible.”
Still arriving on time from the company’s previously announced title, Call of Duty: Modern Warfare II is releasing on October 28 as the sequel to 2019’s Modern Warfare, the most successful Call of Duty title to date. Call of Duty: Warzone 2.0 is also coming later this year, with no specific date yet.
World of Warcraft: Wrath of the Lich King Classic is releasing on September 26, and World of Warcraft: Dragonflight is coming later this year as an expansion to the mod game. Overwatch 2 is scheduled to launch on October 4th in Early Access on PC and consoles with a free-to-play live service model.
“Activision Blizzard’s total net bookings (non-GAAP revenue) were 8% better than our forecast,” said Michael Pachter, an analyst at Wedbush Securities. King came on the spot on our forecast (missed by $1 million), but Activision Publishing beat out by $50 million and Blizzard by $100 million. I can’t say enough about Diablo Immortal (probably only $25 million or so) more), but those are very good numbers.
Pachter said, “The key conclusion is that King in-game purchase revenue was up 6% year-on-year, and it’s widely reported that mobile games are suffering. I suspect “data” services, because I think they make this stuff up as they go, and King’s performance proves them wrong. More importantly, ad revenue increased by over 20%, and once again, skeptics made a mistake. Only Zynga has physical mobile revenue and advertising revenue (now part of Take-Two), so the report should be interesting.
mobile games
Diablo: Immortal.
In mobile games, Activision Blizzard touted the successful June launch of Diablo Immortal, a high-end free-to-play mobile game that topped game download charts in more than 100 countries. It is also ranked among the top-10 grossing games in the US App Stores for the month of June. The company did not say how much revenue Diablo Immortal generated. Sensor Tower estimated that Diablo Immortal generated $100 million in revenue in the first eight weeks.
King’s segment revenue and operating income increased year-over-year, driven by Candy Crush, King’s largest franchise. King’s in-game net bookings grew 6% year-over-year, reflecting strong execution in live operations and user acquisition.
Time spent within Candy Crush again increased year-over-year, with franchise payer numbers increasing by a double-digit percentage year-over-year, and Candy Crush being the highest grosser in the US App Store for the 20th consecutive quarter. The game was a franchise.
Activision Blizzard said its developer headcount increased 25% year-over-year in Q2, and it acquired two companies, including the acquisition of Boston-based Proletarian, maker of Spellbreak, to expand its World of Warcraft team. To continue to deliver engaging content.
And in June, King acquired software company Peltarion to accelerate the use of AI and machine learning technology to serve more engaging content to its community.
more financial statements
Call of Duty: Modern Warfare II aims to bring realism, night or day.
For the quarter ended June 30, 2022, Activision Blizzard’s GAAP net revenue was $1.64 billion, compared to $2.30 billion for the second quarter of 2021. GAAP net revenue from digital channels was $1.47 billion.
GAAP operating margin was 21%. GAAP earnings per diluted share was 36 cents compared to $1.12 for the second quarter of 2021. On a non-GAAP basis, Activision Blizzard had an operating margin of 28% and earnings per diluted share was 48 cents, compared to $1.20 for the second quarter of 2021.
Activision Blizzard generated $198 million in operating cash flow for the quarter, compared to $388 million for the second quarter of 2021.
For the quarter ended June 30, 2022, Activision Blizzard’s net bookings were $1.64 billion, compared to $1.92 billion for the second quarter of 2021. In-game net bookings were $1.20 billion, compared to $1.32 billion for the second quarter of 2021.
For the quarter ended June 30, 2022, total Activision Blizzard monthly active users (MAUs) were D 361 million.
Based on the existing pipeline, the company said total segment operating income is expected to grow marginally in the third quarter versus the second quarter and return to year-over-year growth in the fourth quarter.
Activision Blizzard is dealing with a massive lawsuit alleging sexual harassment by the company. The company said it is committed to becoming the most welcoming, inclusive company in the industry and continues to implement previously announced initiatives to strengthen our practices and policies. In the second quarter, Activision Blizzard said it added experienced diversity, equity and inclusion leaders to key positions in the organization.
In July, the company launched Level Up You, a 12-week program that prepares talented individuals from inside and outside the industry to become full-time game developers. Level Up You is the first major program funded through a $250 million investment over 10 years announced last October to accelerate opportunities in gaming and technology for underrepresented communities.
Junker Queen is a new tank in Overwatch 2.
Activision’s expanded studios also continue to make strong progress on an innovative mobile experience that will bring Warzone to the largest and fastest growing platform, the company said. Across the Call of Duty ecosystem, teams are well positioned to support these launches with substantial live operations, as well as ongoing development of new premium content planned for 2023 and beyond, the company said.
Activision’s second-quarter segment revenue and operating income declined year-over-year, reflecting lower engagement for the Call of Duty franchise, but rose in the first quarter. Following gameplay improvements and seasonal content in Call of Duty: Vanguard and Call of Duty: Warzone, Call of Duty net bookings on console and PC grew sequentially in the second quarter, which the company said was well received by players. went. Net bookings for Call of Duty: Mobile were in line with the first quarter.
Diablo IV, the next generation installment in the action RPG series, is planned to launch on PC and consoles in 2023. The title will support cross-play and cross-progression and is designed to be the foundation of the live service, providing ongoing storytelling and new content.
During the second quarter, Blizzard unveiled Warcraft: Arclight Rumble, a mobile strategy game set in the Warcraft universe. Public testing of the game is underway in select areas.
Blizzard’s second quarter segment revenue and operating income were down year-over-year, but higher than in the first quarter. Net bookings for World of Warcraft declined compared to the year-ago quarter, which included the launch of Burning Crusade Classic, year-over-year growth for Hearthstone and contributions from the June launch of Diablo Immortal.
Despite intensifying macro headwinds during the quarter, King’s advertising business grew more than 20% year-over-year, as the team continued to carefully grow ad volume on the King network.
Cash and short-term investments were $10.8 billion at the end of the second quarter, and Activision Blizzard ended the quarter with a net cash position of approximately $7.1 billion. adjustments were made.
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