Jump to content
FORUMS
Stan

Activision Blizzard Q1 2019 Earnings Call

Recommended Posts

42165-fimggen.jpg

Results for the Q1 2019 Activison Blizzard Earnings Call are here and Blizzard is down to 32 million monthly active users (MAUs), since Q4 2018 when they announced layoffs and got rid of 8% of their non-development employees.

Highlights

  • Activision Blizzard
    • Activision Blizzard delivered approximately $800 million of in-game net bookings in Q1 2019.
    • For each of Activision, Blizzard and King, daily time spent per user playing their games increased Y/Y.
    • For Activision Blizzard overall, average daily time spent per user was approximately 50 minutes.
  • Blizzard
    • Blizzard had 32 million MAUs in this quarter (down from 35 million MAUs in Q4 2018 and 37 million MAUs in Q3 2018).
    • Segment revenues were in-line with expectations. ($344million)
    • Segement operating margin of 16% ($55 million) was lower Y/Y due to decline in segment in-game revenues, partially offset by lower costs.
  • Overwatch League
    • The second season of the Overwatch League commenced in February to sell-out crownds at the Blizzard Arena.
    • Viewership hours are over 30% higher than in the first season.
    • Dallas Fuel hosted the league's first home games in front of a sell-out crown of thousands of fans.
  • They have four key areas of focus include which include:
    • Major Content Releases: "We are focused on delivering a strong cadence of major content releases, where we meet the growing demand of the industry's gaming communities and release our high-quality content more frequently."
    • Live Operations: "We continue to grow our live operations capabilities, to deliver great content, services, features, and events that continuously engage our communities and drive in-game revenues."
    • Franchise Expansion onto Mobile: "We are building on our existing mobile leadership as we extend our acclaimed console and PC franchises to the largest and fastest-growing gaming platform."
    • New Engagement Models: "We are expanding the reach, engagement and our monetization of our francihses as we build on early success in esports, in-game advertising, and consumer initiatives."

Presentation

four key areas of focus.JPGprogress against our plan.JPGaudience reach.JPGdeep engagement.JPGplayer investment.JPGq1 2019 segment results.JPG

(Source)

Share this post


Link to post
Share on other sites

I love WoW but this is kinda sad to see. I know they're a business now and not who they were but when they first made the game they did it for the love of the game. Money for sure but the love of the game was the primary driver.

Reading something like this really does put a lot of perspective on the "hook em" techniques they're starting to implement.

They have the tail wagging the dog in my opinion.

  • Like 1

Share this post


Link to post
Share on other sites

Wow, the numbers for King / Candy Crush are insane, I had no idea.
Also, I thought that an average of 50 minutes daily per user was very high, but then roughly calculated my mean average a week. Now I don't think it's that much anymore 😛

Share this post


Link to post
Share on other sites

I thought exactly the same now that I've read through everything, King was worth comparable revenue as Blizzard + Activision combined and a lot more in actual profit, no wonder the company as a whole wants to push mobile as hard as possible 😮

Share this post


Link to post
Share on other sites
On 5/4/2019 at 2:42 PM, Seksi said:

I thought exactly the same now that I've read through everything, King was worth comparable revenue as Blizzard + Activision combined and a lot more in actual profit, no wonder the company as a whole wants to push mobile as hard as possible 😮

King really specialises in games that have much lower costs than something like WoW, especially in terms of development. Compare Candy Crush to WoW, in terms of development costs, operating costs, all of it, and it's easy to see why it is so profitable. Also, don't forget how incredibly easy it is to pick up a mobile game vs. a PC-based one. Regardless of the perception of the current userbase towards mobile games, there is a massive untapped potential base of players that will flock to a decent mobile game of multiple genres.

Share this post


Link to post
Share on other sites
Guest
2 hours ago, Blainie said:

King really specialises in games that have much lower costs than something like WoW, especially in terms of development. Compare Candy Crush to WoW, in terms of development costs, operating costs, all of it, and it's easy to see why it is so profitable. Also, don't forget how incredibly easy it is to pick up a mobile game vs. a PC-based one. Regardless of the perception of the current userbase towards mobile games, there is a massive untapped potential base of players that will flock to a decent mobile game of multiple genres.

And that is the huge problem IMO.

Why on earth should Blizzard spent lots of money and time to make high quality PC games?
Why invest 50-100 Mio if you can make MORE cash by spending much LESS and instead of a great game you develop mobile games, sell skins and stuff like that?

If you love games (like Blizzard and Bioware did 10 years ago) you are conent that you make good money with good games. Because your heart is in what you do. You love your job. CD Project comes into mind.

But today? Decisions aren't done by the same people anymore. Now accountants get to decicde.

And they are correct: Why invest 100 Mio with a chance to maybe double your investment (but you riks loosing a significant amount too!) - if the alternative is to invest 5-10 mio and a chance to earn even more, like 150 Mio? And if all hell brakes loose you loose 5 Mio.

Obviously, the alternative is the MUCH better choice. More profit, less risk.

Share this post


Link to post
Share on other sites
On 5/6/2019 at 11:23 AM, WedgeAntilles said:

And that is the huge problem IMO.

Why on earth should Blizzard spent lots of money and time to make high quality PC games?
Why invest 50-100 Mio if you can make MORE cash by spending much LESS and instead of a great game you develop mobile games, sell skins and stuff like that?

If you love games (like Blizzard and Bioware did 10 years ago) you are conent that you make good money with good games. Because your heart is in what you do. You love your job. CD Project comes into mind.

But today? Decisions aren't done by the same people anymore. Now accountants get to decicde.

And they are correct: Why invest 100 Mio with a chance to maybe double your investment (but you riks loosing a significant amount too!) - if the alternative is to invest 5-10 mio and a chance to earn even more, like 150 Mio? And if all hell brakes loose you loose 5 Mio.

Obviously, the alternative is the MUCH better choice. More profit, less risk.

That's why, even with D4 being worked on, Diablo Immortal was the clear choice for Blizzard. If they do it right, this game will be monetized well, be incredibly easy to pick up and get involved in, will bring in huge amounts of money and will have minuscule development costs compared to D4. 

CD Projekt could have focused on Gwent, mobile Witcher stuff etc., but are pouring money into Cyberpunk 2077 and whatever their other yet to be revealed big game is coming in the next few years. 

Share this post


Link to post
Share on other sites
Guest
1 hour ago, Blainie said:

That's why, even with D4 being worked on, Diablo Immortal was the clear choice for Blizzard. If they do it right, this game will be monetized well, be incredibly easy to pick up and get involved in, will bring in huge amounts of money and will have minuscule development costs compared to D4. 

CD Projekt could have focused on Gwent, mobile Witcher stuff etc., but are pouring money into Cyberpunk 2077 and whatever their other yet to be revealed big game is coming in the next few years. 

Yes, CD Project is the last of the big companies that is really interested in making a great game.

The last company, that seems to be led by people, who do not want to make the most money with the least input possible, but who want to make great games. Games that will be remembered in 30 years like we remember old games like Syndicate e.g.

Ubisoft, EA, Blizzard-Activision do not care if they make a great product.

Share this post


Link to post
Share on other sites
Rare Patron

Mercedes Benz and Hyundai both make cars.

Mercedes Benz can't really make a good "on a budget" Benz because everyone will compare it to the "not on a budget" Benzes.

Hyundai can make a good "not on a budget" Hyundai because everyone will compare it to the "on a budget" Hyundai.

At least for a time.

Eventually, the "not on a budget" Hyundai is compared to the "on a budget" Benz and the Benz is found wanting.

Later, the "not on a budget" Hyundai is compared to the "not on a budget" Benz, and because Benz was busy "looking backwards" in their development, trying to capture a market that didn't fit their expertise, even the "not on a budget" Benz will be found wanting.

Meanwhile Toyota has been in NASCAR for almost 20 years, with an engine design they don't use in any production vehicle.

It's always easier to grow than to scale back. To conquer territory compared to holding it.

There are online games with orders of magnitude fewer people playing, without any monthly subscription, but they also started that way, they didn't really "fall" to that place, so the perception on them being a success or failure is entirely different.

WoW Classic is going to be an enlightening social experiment.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Similar Content

    • By Stan
      Blizzard had 32 million monthly active users in the first quarter of 2020. WoW's community increased further driven by both new and returning players. Shadowlands is still planned for 2020.
      Q1 2020 Highlights
      Blizzard had 32 million monthly active users in Q1 2020. Even though the majority of employees are currently working from home, there are no plans to change key content releases this year, meaning Shadowlands will still be released in 2020. They saw continued momentum for World of Warcraft during the first quarter of 2020. Hearthstone continues to perform well thanks to the Battlegrounds game mode that launched in November 2019. Overwatch engagement also increased in March whilst the Overwatch League sucessfully moved to online play and remote production.  You can find the full report here.
      (Source)
      COVID-19 Response
      At Activision Blizzard, our number one priority is the health and safety of our employees and their families. All of our offices moved to work-from-home environments by mid-March. We are covering all costs of testing and treatment for affected employees and their families, and we have increased access to tele-health resources and contracted private doctors and medical support in regions where our employees live and work. And we are continuing to find other ways to support our employees and their families as we navigate through this unprecedented situation, including services to help families balance work and home life.
      The digital nature of our content means our creative talent can continue to work on our product pipeline from home. While the shift to remote working adds complexity and challenges in some areas of the game development process, we are implementing mitigation measures to address these areas and, based on the work to date, we still expect to deliver a robust slate of content over the remainder of the year.
      We have leveraged our game platforms to disseminate critical health and safety information while offering in-game events and rewards to promote social distancing. We have made donations to world class health organizations and medical centers in cities where our employees live and work, funding promising convalescent blood therapies and drug trials. And we have made an additional contribution to our own Call of Duty Endowment to continue placing veterans into high-quality jobs.
      The increasingly digital, recurring and cash-generative nature of our operations remains one of our fundamental strengths. With a strong balance sheet, low capital intensity and a track record of disciplined capital allocation, we have substantial flexibility as we navigate through an uncertain environment.
      Selected Business Highlights
      Activision Blizzard exceeded its first-quarter outlook, driven primarily by our investment in creative and commercial initiatives for Call of Duty® delivering better-than-expected results throughout the quarter. We also saw continued momentum for World of Warcraft® and better-than-expected results for other key franchises, as populations sheltering at home turned to our content for entertainment and social connection. These trends have continued so far in the second quarter, with business momentum accelerating further in April. In the current environment, we are fortunate to still be in a position to enable some of the world’s best gaming experiences through our direct digital connection to hundreds of millions of people.
      Activision
      Activision had 102 million MAUsD in the first quarter. Call of Duty: Warzone launched on March 10, 2020 and has reached over 60 million players to date. Life-to-date, Modern Warfare has sold through more units and has more players than any prior Call of Duty title at this point after its release. In the first quarter, Call of Duty: Modern Warfare®unit sell-through was the highest for the franchise outside of a launch quarter. Following substantial year-over-year growth versus the prior title in January and February, unit sell-through accelerated in March, driven by upgrades from Warzone as well as rising demand amidst shelter-at-home conditions. Also in the first quarter, Modern Warfare in-game net bookingsC more than doubled year-over-year versus Black Ops 4. Call of Duty Mobile continued to build on last October’s breakout launch with new content, features and events aimed at optimizing engagement, retention and player investment. The game saw increased reach and engagement in March, driven by an increased cadence of compelling content and events as well as shelter-at-home tailwinds. Originally planned in a local city-based homestand format, the inaugural season of the professional Call of Duty LeagueTM pivoted all matches to online play and remote production for the remainder of the regular season, to keep players and fans safe while still delivering premium esports content to a global audience. Blizzard 
      Blizzard had 32 million MAUsD in the first quarter. After doubling in the second half of 2019, World of Warcraft’s active player community increased further in the first quarter, driven by both new and returning players, as the team continued to deliver more content between expansions than ever before. Each of Blizzard’s key franchises experienced a month-on-month increase in MAUsD in March as a result of shelter-at-home tailwinds. Hearthstone® engagement improved sequentially, driven by the new Battlegrounds game mode launched in November, and strong execution in live operations. Overwatch®engagement increased meaningfully in March and the Overwatch LeagueTM successfully moved to online play and remote production during the quarter. King
      King had 273 million MAUsD in the first quarter. MAUsD grew month-over-month in both January and February, and further accelerated in March as shelter-at-home conditions came into effect. Candy CrushTM franchise MAUsD grew year-over-year in each month of the quarter, with double-digit growth in March. Within the franchise, the community played more game rounds than in any quarter since Activision Blizzard’s acquisition of King. Candy Crush SagaTM and the wider Candy Crush franchise were once again the top-grossing title and franchise in the U.S. mobile app stores. Advertising net bookingsB grew over 75% year-over-year, even against the backdrop of the sudden decline in demand across the digital advertising sector in March. Company Outlook
      Our business exhibited accelerating momentum entering the second quarter from the dual tailwinds of strong execution in the Call of Duty franchise following last year’s increased investment, and increased engagement as people turned to our interactive content as they sheltered at home. The full extent of the impact of the COVID-19 pandemic on our business, operations, and financial results will depend on numerous evolving factors that we are not able to fully predict at this time. While there are risks related to global economic weakness, rising unemployment, pressures on the retail channel, pricing and other potential factors, we also see many positive opportunities for our operating performance this year, including the potential for continued heightened engagement in our content well beyond the second quarter. We have aimed to be prudent in our guidance to account for these effects, and we believe there is potential for overperformance if these risks do not materialize.
      Regarding product development, the majority of our employees are currently working from home, which while adding complexity to some areas of the game development process, has not currently changed our plans for our key content releases this year.
      Since we provided our initial guidance in February, the strengthening dollar has resulted in an additional FX headwind to full year net bookings of approximately $100 million. Further, the strengthening dollar and lower interest income from the current interest rate environment represent an additional headwind to full-year GAAP and non-GAAP EPS of approximately $0.08 versus our prior outlook. Nonetheless, with strong momentum across the business we are raising our outlook for net revenues and EPS for the year, more than passing through the Q1 earnings outperformance despite these headwinds.
    • By Stan
      Last Thursday was Take Your Child to Work Day and Blizzard initially planned on hosting on-campus activities for Blizzard's parents and their kids, but due to COVID-19, they had to get creative and host it online, so they've come up with some epic art tutorials with Samwise Didier and storytelling by Chris Metzen.
      (Source)
      This past Thursday was Take Your Child to Work Day, and prior to COVID-19, we were planning a big day of fun and enriching on-campus activities for Blizzard’s parents and their kids. After the company shifted to work-from-home mode, we had to get creative.
      Thanks to the help of talented folks across the company, we were able to put together a cool virtual program aimed at giving Blizzard’s kids an entertaining and educational glimpse into what goes into our games. We’re thrilled to share some highlights with you!
      Art Tutorials with Samwise Didier
      Join veteran Blizzard artist Samwise Didier for some sketching tutorials centered on iconic Warcraft races.
      And for some extra credit, download this PDF guide to drawing your favorite characters from across the Blizzard multiverse!
      Story Time with Chris Metzen
      Blizzard alumnus Chris Metzen reads from his children’s book Snow Fight: A Warcraft Tale. A treat for kids (and adults!) regardless of age.
      From artists and game designers, to engineers, HR professionals, and more, folks from all across Blizzard shared lessons, lectures, and tutorials designed to provide kids with insights and skills that’ll equip them for a bright future. We hope you enjoyed this glimpse into some of our extracurricular Take Your Child to Work Day activities, and as always, stay happy, healthy, and safe!
    • By Starym
      This was an unexpected treat, as Benmonor surprised us with Diablo Respawned, a full and actual true remake of the Diablo 1 trailer! From its start you might assume it's just a remaster with improved graphics (which we've already seen), but we not only get new parts added to the original, but also an entirely new second half! It's even more impressive when you find out that the project took him 40 days to make and he did it all alone.
      Benmonor is an independent game developer at Forbidden Realms Studio and made this as a passion project, and it's really massively impressive. I particularly love the second part, with the shadowy Diablo lurking in the Cathedral, and the Tristram zoom-out at the end. We even get some "behind the scenes" stuff as well:


      For more BTS images like the above, check out the reddit post.
      Check out this truly impressive D1 trailer remake with a ton of new stuff added.
    • By Starym
      The last few Upscale videos haven't been that impressive, as the newer things they upgraded were already pretty good to start with, and I assumed this one would be the same. But, as the video has plenty of footage from older games, it's very much worth taking a look at, especially the comparison in the second half. Also it's a pretty good video in general, so why not check it out again:
       
      Other Upscaled Remasters
      MoP and WC3: Reforged Warcraft 3 E3 Trailer, Diablo 2 LoD Final Cinematic and Overwatch 2 Battle for Azeroth and Diablo 1 WoW Cataclysm and Starcraft: Ghost Diablo 3 Tyrael's Sacrifice Cinematic Burning Crusade Intro Wrath of the Lich King Intro Vanilla WoW Intro Diablo 2 Intro Diablo 2 E3 Teaser and Lord of Destruction Intro
    • By Starym
      After the recent re-emergence of the one day a year that's officially allowed to be funny and the official Blizzard patch notes that came with it, we wanted to go back and check out older editions of this now tradition. It turns out Blizzard actually has an archive for their April Fools posts, which is good news, but they also stopped updating it in 2015, which is bad news.
      In any case we poked around it for some fond memories and picked out some milestones, but you should definitely head on over and check it out yourselves as well. Unfortunately some of the entries there have broken links so we don't get to see all the content, but we do at least get a general idea of what it was and can search it elsewhere if it gets interesting.
      It seems the one Prince song may have been referring to Blizzard, as they started their April Fools shenanigans in 1999, with the original StarCraft and DIablo 2! And what a start it was, as it was the one that cemented the secret cow level as the most enduring joke of the Diablo franchise. You can read more about the exact origins of the cow level, but this April 1st screenshot of D2, while it was still being developed, reignited the fires of the cow level craze!

      Now we did end up actually getting a cow level in Diablo 2, so I'm not quite sure this one counts as a "fool" anymore, since it's basically just normal promotion art (ok, so the cows don't show up in the Den of Evil, but they might have back then!). The other entry in this very first April Fools Blizzard edition was StarCraft's Biggest Game Hunters map, based on the very popular Big Game Hunters one from the original game, except with... a few... more crystals:

      2002 was another of Blizzard's strangely predictive jokes, as they announced the Pandaren were coming to WarCraft 3, including their Shodo-pan warriors.

      Then WoW arrived on the scene and we immediately got one of the better ones, with the 2-player controlled Ogre race (which would later become a pretty great hero in Heroes of the Storm... wait, are Blizzard just using April Fools jokes to test the waters for their really weird ideas that they'll eventually implement?!)

      This next one is definitely one of my favorites, as Blizzard announced a brand new game set in the World of Warcraft universe, and it was a prequel to boot!

      Wait, was that one actually just another pre-concept-testing for Reforged?! I'm so confused right now.
      Then came one of the most famous ones of all time, 2008's Bard announcement!
        

      The same year had the impressive console off-shoot of WoW, the Molten Core:
      These following ones are really making me doubt these are jokes at all, as they're clearly just the shape of things to come, as 2010 saw the first whiff of Diablo: Immortal and the EPEEN system:
        

      There are plenty more awesome entries in the archive, so head on over there and remind yourselves of some of the cooler things Blizzard have done over the years, and definitely post some of the better ones we missed below!
×
×
  • Create New...