Activision Blizzard Second Quarter 2023 Financial Results - $1B in Net Bookings Thanks to Diablo 4

Blizzard Posted 2023/07/19 at 12:23 PM by Archimtiros

second quarter financial resultsMicrosoft merger agreement to October 18th

Activision Blizzard

“This quarter, our talented teams delivered strong performance for our players and shareholders. We delivered a 50% year-over-year increase in net bookings, operating income growth over 70%, earnings per share growth over 80%, and a record quarter for Blizzard with over $1 billion in net bookings for the first time,” said Bobby Kotick, CEO of Activision Blizzard.

“Most importantly, we continue to set new standards of excellence for workplace culture and provide joy and connection to hundreds of millions of players around the world. While we continue to have concerns about the economy and growing industry competition, we remain focused on the long-term opportunities ahead and completing our merger with Microsoft.”HighlightsActivision - 92 million monthly active users, down from from 98 million in Q1 2023

Activision segment revenue grew 17% year-over-year in the second quarter, while operating income increased over 80% year-over-year, driven by growth across the Call of Duty® franchise.

Net bookings on PC and console grew strongly year-over-year, as players continued to engage and invest in the Call of Duty: Modern Warfare® II universe. Premium Call of Duty sales grew sharply year-over-year. Second quarter in-game net bookings were higher than both the first quarter and the year ago period, with Season 3 being the highest-grossing Modern Warfare II in-game season to date, driven by a strong community response to gameplay enhancements and the new BlackCell battle pass offering. Our teams are looking forward to releasing additional seasons of new content and ongoing community updates in the coming months.

Call of Duty Mobile engagement and net bookings were stable year-over-year, with the team continuing to see a positive response to enhancements to the player experience and optimization of live operations. Lifetime worldwide consumer spending on Call of Duty Mobile since its October 2019 launch passed $3 billion in the second quarter.

Call of Duty approaches its 20-year anniversary in October with around 90 million monthly players, with over half of all engagement on the mobile platform. Activision’s teams are hard at work on major new installments in the franchise slated for the fourth quarter. Development of this year's full annual premium release on PC and console is proceeding well. Call of Duty: Warzone Mobile™, an ambitious, internally developed mobile game tightly integrated with the PC and console experience, continues to progress through regional testing.

Blizzard Entertainment - 26 million monthly active users, down from from 27 million in Q1 2023

In the second quarter, Blizzard segment revenue grew over 160% year-over-year and operating income more than tripled year-over-year, each setting new quarterly records, driven by the launch of Diablo IV.

As of the end of the second quarter, Diablo IV had sold-through more units than any other Blizzard title at an equivalent stage of release. Over 10 million players experienced Diablo IV in June, playing for over 700 million hours, and retention trends for the title are particularly strong.

The launch of Diablo IV marks the start of a live service plan designed to deeply engage the Diablo community and create opportunities for continued player investment. July 20 sees the release of Diablo IV’s first quarterly season, Season of the Malignant, bringing new themes, content, and fresh gameplay to the community. Blizzard’s teams are also making strong progress on expansions that will deliver major new features and continue the game’s acclaimed narrative for many years to come.

Following the launch of Diablo IV, Blizzard also saw increased engagement in Diablo Immortal™, with June monthly net bookings for the mobile and PC title reaching the highest level since January. Elsewhere on mobile, Warcraft: Arclight Rumble™, an action strategy game internally developed at Blizzard, continues to progress through testing ahead of its regional soft launch.

Blizzard continued to engage the Overwatch® and Warcraft® communities with live operations in the second quarter. While engagement and player investment in Overwatch 2 declined sequentially in the quarter, the Overwatch team is looking forward to the August 10 release of Overwatch 2: Invasion. This will be the largest seasonal update yet, planned to include new PVE Story Missions, a new game mode, and a new hero progression system as well as an additional hero.

The World of Warcraft® team is delivering more content faster than ever before following the November release of the Dragonflight™ expansion for the Modern game, and subscriber retention in the West remains higher than at the equivalent stage of recent Modern expansions.

King - 238 million monthly active users, down from from 243 million in Q1 2023

King segment revenue grew 9% year-over-year to a new quarterly record, equivalent to 10% year-over-year growth on a constant currency basisE, again driven by strong execution across Candy Crush™ live operations and user acquisition. Segment operating income was slightly lower year-over-year due to increased investment in marketing, which is expected to contribute to operating income growth in future quarters.

In-game net bookings increased 10% year-over-year. The spring Candy Crush All Stars tournament, the first to include contestants from multiple continents, drove particularly strong year-over-year growth in installs and player investment in the Candy Crush franchise in April. Candy Crush payer numbers again grew year-over-year in the second quarter, and Candy Crush was the top-grossing game franchise in the U.S. app stores1 for the 24th quarter in a row.

In the second quarter King saw further benefits from the acquisition of Peltarion, an AI technology company acquired in June 2022. Peltarion’s machine learning technology is helping King to accelerate the production and testing of Candy Crush live operations and to offer more relevant game content to players. King is now working on additional use cases involving generative AI to assist its developers in accelerating their workflow.

King’s advertising business grew year-over-year in the second quarter, with growth across direct brand advertisers and partner networks. Direct sales benefited from the rollout of innovative new ad formats and success in targeting new verticals, while indirect growth was driven by enhancements to our platform and the ramp of new partners.

first annual Transparency Reportacquisition by Microsoftwithout the usual conference call

Comment by VarusEUdolla, dolla bills ya'llComment by IceWolfDKDiablo4 is doing much better than the vocal minority expects.Comment by FlorencewSo it confirms the feeling that DF is retaining players with that much updates. Hope they find a way to bring people back as the Exp is pretty good and some still afraid to comeback.Comment by Shark02Diablo4 is doing much better than the vocal minority expects.Comment by eKatherineSo it confirms the feeling that DF is retaining players with that much updates. Hope they find a way to bring people back as the Exp is pretty good and some still afraid to comeback.Comment by KePoWDiablo 4 rocks!Comment by zawyer Most importantly, we continue to set new standards of excellence for workplace culture Comment by GcharisnThis includes Diablo Immoral that made $500 million.

Doesn't matter how much they make, game is still #$%^. Game is still down 97% viewership on twitch and -80%+ player count.

Blizzard is hoping they will see this revenue from diablo 4 again, they are in for a shock. Only 2% of their total revenue is from cash shop.Comment by Devil64Diablo 4 rocks!Comment by Sayosin99The problem with DF is that it hasn't shown much to lure players back.

The next big patch is what will determine the direction DF heads towards.Comment by TinglyPianoLETS GO! They deserve every penny. OW2 free to play is a great success bringing in more new player base than ever when it is paid to play. I started playing when it is F2PComment by AesiriaLETS GO! They deserve every penny. OW2 free to play is a great success bringing in more new player base than ever when it is paid to play. I started playing when it is F2PComment by HaraiLETS GO! They deserve every penny. OW2 free to play is a great success bringing in more new player base than ever when it is paid to play. I started playing when it is F2PComment by kanegasibeing falsely permabanned on one for "using botting software"Comment by Bloodwraith0Overwatch is dead!Comment by sapiensTLDR ABK MAUs declined, revenue increased = D4 + more aggressive monetisation

prognosis is this trend is likely to continue, cuz the initial D4 hype is off, while OW2 is desperately headed for Steam (Epic and GoG next?) and WoW wont turn its tides into Fortnite levels of user metrics, while HS probably isnt worth the mention?

/edit personally the most interesting aspect on this trend is the When and How for WoW. cuz obv box tiers and ig monetisation models for MTX r cash shop exclusive collectibles like mogs and mounts (no data on services eg faction change though). all of which have been heavily inflated since SL and furthermore the Trading Post by the obscenely massive volumes of (not longer so much) prestige pixels.

i dont see any other potential for additional monetisation than grind intensive drops (like TLPD) and deleted rares (like Bruto) rn, as any attempt to pay-to-win than boosting would result in a revolt, while content is payed by box and sub.Comment by OutcomeDiablo 4 came out, made net 1 Billion. Drew in a LOT of non blizzard game player base.

YET

Monthly active users DOWN by 1 million from previous Q

Thats NUTS. They say WoW is doing better than recent expansions for user retention, so this must mean Overwatch lost A LOT of players, like MILLIONS. Which I dont think it even had millions to spare. No wonder its moving to Steam.Comment by AedionMorrisIf the best thing they can say about retail is just that it's doing better than recent expansions, being BFA and SL, that's not really saying a lot and given that it's the only thing they can say if a bit concerning.Comment by AthenamonicaSo it confirms the feeling that DF is retaining players with that much updates. Hope they find a way to bring people back as the Exp is pretty good and some still afraid to comeback.Comment by Pandaabear
-80%+ player count..