World of Warcraft® Classic drove the biggest quarterly increase to subscription plans in franchise history, in both the West and East.
-Activision-Blizzard Q3 2019 earnings report
WoW Classic brings another ray of sunshine.
Given what SuperData told us about WoW Classic previously, this was not unexpected.
This ray of sunshine however comes amidst some cloudy skies at A-B.
The company took a lot of heat at the start of the year when it announced layoffs in practically the same breath in which it announced record financial performances. While people were outraged, the 2019 financial reports have supported the company’s pessimism. Blizzard was especially hard hit with its margins dropping from 30% to 16% in Q1 2019 as Battle for Azeroth shed players while the company had nothing else new to attract people. And things have remained down. The charts show that Blizz has recovered a bit on margins, but now Activision is was down.
And the talk at the presentation was largely about the long term tent pole products, Call of Duty and World of Warcraft. Even as they try to diversify their stable of titles, the old champions have to carry water for everybody. Even the up part of company, King and its mobile games, the emphasis was on the Candy Crush franchise.
This is a very common problem, creating a popular and very profitable product then never being able to create something that could match, much less surpass, that product.
There was even mention of possibly beefing up the WoW team. And, it was recognized that WoW Classic gave the company a boost during an “off” year when WoW did not have an expansion set to go. There was some uncertainty about how sustainable WoW Classic would be over the long term. And certainly, if they don’t do anything else with it, it will dwindle off to a much smaller population.
Finally, Q3 ended on September 30, 2019. The Hong Kong debacle did not come to pass until mid-October, so that may put something of a damper on Blizzard numbers for Q4. Opening up pre-orders for Shadowlands during BlizzCon may offset that somewhat, but that is a short term solution for a long term problem.
You can find all of the quarterly result information at the Activision Blizzard investor relations site.