Activision Blizzard today reported that third-quarter revenue ended September 30, Wall Street beat its revenue and revenue expectations. The company had a major launch of the World of Warcraft Classic during the quarter, which helped drive audiences much higher in both Asia and the West, the company said.
Activision Blizzard's core businesses include games like Overwatch, Call of Duty, and World of Warcraft on consoles and PCs and its Candy Crush mobile games.
"Third quarter results exceeded previous expectations for both turnover and earnings per share," CEO Bobby Kotick said in a statement. Recent launches have allowed significant growth in audience size for Call of Duty and the World of Warcraft series. When we introduce mobile and free-to-play games based on our franchisees, we believe we can increase audience size, engagement and revenue generation across our wholly owned franchisees. With a strong content pipeline and momentum in mobile, esports and advertising, we are confident that we will continue to be a leader in connecting and engaging the world through epic entertainment. ”
For the quarter ended September 30, 201
For the quarter ended 30 As of September 2019, on a non-GAAP basis, Activision Blizzard's earnings per diluted share were 38 cents, compared with 42 cents for the third quarter of 2018. Analysts had expected 23 cents per share.
For the fourth quarter, the company said it expects revenue of $ 1.812 billion and earnings per share of 43 cents on a non-GAAP basis. It is only slightly up from the third quarter, and less than some of the most optimistic forecasts. (Overall, analysts expected $ 2.20 per share for Q4 before earnings were announced). Perhaps as a result, the stock price is down 1.98% to $ 53.47 in demand trading.
Activision previously stated that Call of Duty: Modern Warfare generated $ 600 million in its first three sales days, more than WWII and Black Ops 4, both of which earned more than $ 500 million in opening weekends. And today, the company said that Modern Warfare sells out last year's Black Ops 4 by a percentage of "teens."
This year's game was launched after the third quarter, October 25, and ultraviolet scenes in the single-player campaign that include torture, child fighting and shooting unarmed women are irritated. Fans have responded positively to the realism of both the content and the graphics, as it brings the game closer to being more like a documentary on modern warfare.
But the game has faced protests in Russia because it portrays Russian soldiers as war criminals and it has a fictional "Highway of Death" blamed for Russian bombers, even though it was an actual "Highway of Death" scene committed by Americans in the Gulf War. Call of Duty Mobile, launched on October 1, generated more than 100 million downloads in the first month, something Kotick said in a revenue interview was one of the most successful mobile launches ever. The game is among the top ten in revenue charts in more than 100 countries.
Chief Operations Officer Coddy Johnson said in an interview that Activision Blizzard will be able to spend a lot of money marketing Call of Duty Mobile, and this will affect profitability in the fourth quarter.
Meanwhile, the Blizzard Entertainment side of the company showed off their games in the works of Diablo IV and Overwatch 2 last week at its BlizzCon 2019 conference in Anaheim, California. While the company faced some protesters related to its ban on a Hearthstone player advocating to free Hong Kong, the games were pretty much well received.
In an analytics interview, Kotick said he expects Blizzard to deliver consistent results thanks to strong franchises such as Overwatch, Hearthstone and World of Warcraft.
The World of Warcraft Classic drove the largest quarterly increase in franchise history plans, both in the west and the east, the company said. World of Warccraft's next expansion, Shadowlands, will be launched in 2020.
In the third quarter, Activision had 36 million active users each month, Blizzard had 33 million and King had 247 million.
The mobile franchise Candy Crush grew over the past year, said the company, driven by last year's launch of the Candy Crush Friends Saga. Ad bookings almost doubled from a year ago.
The company laid off about 800 employees in February. This followed financial results for fiscal year 2018, which was the company's best ever, but did not fall below expectations.