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03 November 2020

Activision Blizzard – a flurry of new players

Activision Blizzard, a leading global video game publisher based in Santa Monica, California, beat Wall Street earnings estimates considerably as the pandemic has pushed demand for its products. The video gaming industry, as with other home entertainment sectors, has benefitted significantly with Activision being no different. Some of the game franchises published by the company include Call of Duty, Overwatch, World of Warcraft, Hearthstone, Diablo and Candy Crush.

Activision has reported great revenue figures of US$1.95bn for Q3 2020, with analysts only expecting US$1.7bn. This displays a 38% increase on a year earlier. Because of these gains, its CEO, Bobby Kotick said the company is raising its expectations for full-year results. The level of demand for Activision Blizzard’s products has prompted hiring 20% more employees, up from the 10,000 already working for the company.
The good news does not stop there for the company as they have plenty more in the pipeline. Call of Duty: Black Ops – Cold War will launch on PC, Xbox and Playstation platforms on 13th November 2020 with the great feature of allowing players using different gaming consoles, as well as those on older generation consoles, to play alongside each other. World of Warcraft is introducing a new expansion to the game, named Shadowlands, launching on 23rd November.

The company stated that the franchise driving the biggest gains in the quarter is the Battle Royale game mode for Call of Duty: Warzone, and Call of Duty: Mobile, with both increasing active monthly user usage by more than three times for the same franchise products that came out last year. Activision Blizzard had more than 111m monthly active users as Warzone reached 80m downloads, 60m of which occurred in the first 52 days since the games release. Warzone has prompted significant cross-selling abilities for the company, as people were buying the premium version of the game, producing the highest premium sales in the Call of Duty franchise history. With two thirds of copies sold digitally, this can only have proven beneficial on profit margins, as the need to manufacture the disks and packaging of the games is reduced.

The games in the pipeline are showing huge potential to raise earnings for the year. Activision allowed Call of Duty players to trial the new game in the franchise, Call of Duty: Black Ops – Cold War, which attracted record numbers once again. The company is also growing its global presence significantly into the huge market that is China, with Call of Duty: Mobile in large scale testing there, with more than 50m players pre-registering to play the game upon its release date.

The fact that Activision Blizzard has managed to grow its combined console and PC players playing Call of Duty by 700% compared to a year ago, strongly emphasises the underlying quality and fan base for the company’s products.

Please note that investments and income arising from them can fall as well as rise in value. This communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.
Activision Blizzard – a flurry of new players
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