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Diablo 4 and Overwatch 2 Delayed: Activision Blizzard Q3 2021 Financial Earnings Call

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Activision Blizzard held their third quarter earnings call for 2021 and we had some pretty big revelations, including the delays of Diablo 4 and Overwatch 2, Blizzard's financial situation and more, so let's take a look at the highlights.

  • Diablo 4 and Overwatch 2 delayed: it seems very likely they will not be launching in 2022, as Activision Blizzard CFO Armin Zerza mentioned they will not be including the two games in their financial outlook for 2022. With the recent departures of the leads on both the games, this is perhaps expected, as Blizzard leader Mike Ybarra commented that the extra time will allow both development teams to expand and be able to follow up the games' launches with "substantial content releases".


  • Blizzard had 26 million monthly active users, the exact same amount as in the second quarter.
  • Blizzard's Q3 2021 ($493 million) revenue grew 20% compared to last year, mostly due to Diablo 2: Resurrected.
  • D2R had the all-time highest first week of sales for a remaster for all of Activision Blizzard.
  • Diablo: Immortal release is scheduled for Q1 2022.
  • WoW is expected to deliver its highest engagement and net bookings for a non-expansion release year in a decade.
  • The two most important financial industry stats:
    • Revenue: $1.88 billion versus $1.88 billion expected.
    • Earnings per share: $0.72 versus $0.70 expected.
  • The Q3 results met analyst expectations and was a solid performance, the reported outlook for Q4 did not meet expectations.


You can check out the full visual presentation here, or check out the press release with a lot more numbers below:

Blizzard LogoQ3 Earnings (Source)

SANTA MONICA, Calif.--(BUSINESS WIRE)--Nov. 2, 2021-- Activision Blizzard, Inc. (Nasdaq: ATVI) today announced third-quarter 2021 results.

“I’m pleased to report strong third quarter results ahead of our prior outlook,” said Bobby Kotick, CEO of Activision Blizzard. “We are excited about this week’s Call of Duty launch and expect continued success in the fourth quarter. I want to thank our employees for their continued commitment to each other, the company, and our players. We look forward to sharing progress updates on our workplace initiatives, alongside our business performance.”

Financial Metrics




(in millions, except EPS)




Prior Outlook*



GAAP Net Revenues







Impact of GAAP deferralsA




























Impact of GAAP deferralsA













* Prior outlook was provided by the company on August 3, 2021 in its earnings release.

Please refer to the tables at the back of this earnings release for a reconciliation of the company’s GAAP and non-GAAP results.

For the quarter ended September 30, 2021, Activision Blizzard’s net revenues presented in accordance with GAAP were $2.07 billion, as compared with $1.95 billion for the third quarter of 2020. GAAP net revenues from digital channels were $1.85 billion. GAAP operating margin was 40%. GAAP earnings per diluted share was $0.82, as compared with $0.78 for the third quarter of 2020. On a non-GAAP basis, Activision Blizzard’s operating margin was 43% and earnings per diluted share was $0.89, as compared with $0.88 for the third quarter of 2020.

For the quarter, operating cash flow was $521 million, as compared with $196 million for the third quarter of 2020. For the trailing twelve-month period, operating cash flow was $2.89 billion.

Please refer to the tables at the back of this press release for a reconciliation of the company’s GAAP and non-GAAP results.

Operating Metrics

For the quarter ended September 30, 2021, Activision Blizzard’s net bookingsB were $1.88 billion, as compared with $1.77 billion for the third quarter of 2020. In-game net bookingsC were $1.20 billion consistent with the third quarter of 2020.

For the quarter ended September 30, 2021, overall Activision Blizzard Monthly Active Users (MAUs)D were 390 million.

Commitment to a Safe, Inclusive Working Environment

We are committed to becoming the most welcoming, inclusive company in our industry. We are taking further steps to advance our commitment with greater impact, transparency, and urgency.

  • We are adding staff and resources to our ethics and compliance and employee relations teams. We are continuing to thoroughly investigate each and every claim and complaint that we receive. As a result of this process, more than 20 individuals have exited the company in recent months.
  • We are implementing a zero-tolerance harassment policy across Activision Blizzard that will be applied consistently. Our goal is to have the strictest harassment and non-retaliation policies of any employer.
  • Based on feedback from employees, we are waiving required arbitration of future individual sexual harassment and discrimination claims.
  • We have introduced the goal of increasing the percentage of women and non-binary people in our workforce by 50% within the next five years, to more than one-third across the entire company.
  • We plan to invest an additional $250 million over the next 10 years in initiatives that foster expanded opportunities in gaming and technology for under-represented communities.
  • To help us continue to recruit, retain and promote employees from all backgrounds and identities, we are implementing the requirement for a diverse slate of candidates for all full-time open positions.
  • A review of 2020 U.S. pay equity at our company conducted by an independent firm showed that women on average earned slightly more than men for comparable work in 2020. We are committed to compensation remaining equitable for men and women performing comparable work in 2021, and beyond.

In September we announced a comprehensive agreement with the U.S. Equal Employment Opportunity Commission, which is subject to court approval, to strengthen policies and programs intended to further improve the prevention of harassment, discrimination, and related conduct. As part of the agreement, we will establish an $18 million fund to compensate those who have experienced such behavior at our company and elect to participate.

The company continues to monitor the progress of its business units, franchise teams, and functional leaders with respect to workplace initiatives. We will continue to provide regular updates to all stakeholders.

Selected Business Highlights

Activision Blizzard’s third quarter results were above our outlook. Third quarter monthly active usersD were consistent with the year-ago level, even as regions continued to re-open, while net bookingsB and operating income grew year-over-year. This performance again illustrates the structural expansion that our talented and passionate teams have driven in our largest franchises as they created new ways for players to interact with our intellectual properties, including free-to-play experiences. We continue to increase investment in creative talent so that we can grow and delight the communities for each of our key franchises.


  • The Call of Duty® ecosystem sustained reach, engagement, and player investment well above levels seen prior to the introduction of free-to-play experiences across console, PC, and mobile.
  • Activision segment revenue grew year-over-year to a new record on a year-to-date basis. Segment revenue was lower year-over-year in the third quarter due to the launch of Tony Hawk’sTM Pro SkaterTM 1 + 2 in the year ago quarter and declines in Call of Duty against a quarter that benefited from shelter-at-home mandates and the early ramp of WarzoneTM.
  • Activision had 119 million MAUsD in the third quarter. MAUsD in the Call of Duty franchise were consistent year-over-year on console and PC and grew on mobile.
  • On console and PC, Call of Duty MAUsD and time spent exhibited very similar retention from Q2 to Q3 as our experiences in prior years.
  • In-game player investment on console and PC remained well above the level seen prior to the Warzone launch, at approximately three times the level of Q3 2019.
  • Strong conversion from free-to-play drove premium sales higher than in any third quarter prior to the launch of Warzone.
  • For Call of Duty Mobile, net bookings grew over 40% year-over-year in the third quarter, driven by double digit growth in the West and a continued contribution from the game in China.
  • Call of Duty: Vanguard will release on November 5, followed by the roll out of Call of Duty: Warzone Pacific, the biggest update to the Warzone experience since launch, on December 2.


  • Blizzard segment revenue grew 20% year-over-year in the third quarter, driven by the successful launch of Diablo® II: ResurrectedTM. Blizzard had 26 million MAUsD in the third quarter.
  • For Diablo, our plan to enter an era of unprecedented content scale for the franchise has experienced a strong start with the September release of Diablo II: Resurrected, the return of one of the most acclaimed titles in PC gaming history. First week sales of the title were the highest recorded for a remaster from the company.
  • On mobile, Diablo® ImmortalTM is in public testing, and remains on track for release in the first half of next year.
  • World of Warcraft® reach and engagement continues to benefit from the combination of the Modern game and Classic under a single subscription. World of Warcraft is on track to deliver its strongest engagement and net bookings outside of a Modern expansion year in a decade.
  • Hearthstone® net bookings were stable year-over-year in the third quarter. In October, the team launched MercenariesTM, an innovative role-playing mode that gives existing, returning and new Hearthstone players an entirely new way to play the game.


  • King segment revenue grew 22% year-over-year to a new quarterly record, with very strong year-over-year trends for both in-app purchases and advertising. King had 245 million MAUsD in the third quarter.
  • Hours played across the King portfolio grew year-over-year in the third quarter, with players responding positively to a more frequent cadence of compelling in-game content and events for key titles. Payer numbers grew by a double-digit percentage versus the year ago quarter.
  • In-game net bookings for Candy CrushTM grew over 20% year-over-year, with Candy Crush once again the top-grossing game franchise in the U.S. app stores1.
  • At the end of the third quarter King launched the Candy Crush All Stars U.S. tournament which has driven meaningful increases in installs, game rounds played and in-app purchases in recent weeks.
  • King has been accelerating and refining content delivery in Farm HeroesTM, its second largest franchise. This work continued to bear fruit in the third quarter, and in-game net bookings have grown around 20% year-over-year on a year-to-date basis.
  • King’s advertising business grew robustly, with quarterly revenue growing sequentially and year-over-year to a new high. Both volume and pricing grew strongly year-over-year, benefiting from the team’s growing relationships with demand partners and the ongoing ramp of new categories of advertisers.

Company Outlook

(in millions, except EPS)






Impact of GAAP

CY 2021







Net Revenues














Fully Diluted Shares














Q4 2021







Net Revenues














Fully Diluted Shares







Net bookingsB are expected to be $8.65 billion for 2021 and $2.78 billion for the fourth quarter of 2021.

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ugh with the D2 news this is just going to reinforce to companies that people will buy remakes of old games over and over so they will keep continuing to see reissuing old games as a substitute for making actual new content.  And with the WoW news, players showed they really don't care what Blizz does (or did) behind the scenes if the playerbase has stayed steady with all the lawsuits, firings, etc.  and all that talk of people quitting cause what Blizz did was unacceptable was just that, talk.

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3 hours ago, Calorat said:

And with the WoW news, players showed they really don't care what Blizz does (or did) behind the scenes if the playerbase has stayed steady with all the lawsuits, firings, etc.  and all that talk of people quitting cause what Blizz did was unacceptable was just that, talk.

So the WoW news is likely being obscured by how their assessing the metrics.

Their definitions are based on engagement and net bookings. Net bookings represents the total amount made off digital sales, which includes store mounts, pets, etc, and its long been that a smaller subset of the player base can contribute to an oversized proportion of the store purchases. Another element is how you're counting, 6 month subscriptions front load the balance sheet for example, and could be double dipping with the store mount reward for them.

A lot's been made of how Blizz measures engagement over the past few years, with time played as a big part of the metric. Engagement is a pretty nebulous category and one blizzard gets to define the parameters of. While its not clear based on what we have here, relative engagement levels are likely being captured in the way which most celebrates their current model; it is their earnings report after all and leadership is hoping to keep their jobs. Info leaks, which should always taken with a grain of salt, indicated a substantial falloff in active players.

Its real easy to make numbers lie depending on how you count 'em, and its always worth looking between the lines of what executives and lawyers say.

Edited by Rag

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So let me recap for TL;DR: Everything is fine. They didn't lose single piece of player, they even increased the profit and investors are happy. Lawsuit and other bullshiets are not important to deal with. 

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Their measurements of "engagement" are pretty vague, as every company tends to measure it in their own way, but it does look like they lost many players. Delaying OW2 further can't be good, as it is a game that depends on getting new content. More and more people are leaving. Will they return after such long content drought? Many might not. People are used to waiting for Diablo 4, plus it's a new game, so further delay in this case won't impact it as much.

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