We got the 2020 Q2 financial results for Activision Blizzard earlier this week and it confirmed what many had probably already guessed; people staying home play (and pay for) more video games.
So, not really a surprise that they did well, though I am sure senior execs from Bobby Kotick on down will claim that their leadership was the magic ingredient. It is always their work that causes anything good and unavoidable market conditions that cause anything bad. So the execs get huge bonuses and the employees… well… and it isn’t just people on the Activision side of the house.
Anyway, as the presentation shows, revenue was up year over year.
Of course, things were looking pretty meager a year ago, with the 2019 Q1 results showing people had fallen away from Battle for Azeroth with Q2 reviving slightly… margins up from 16% to 20%… on anticipation of WoW Classic and the Rise of Azshara update which unlocked flying in the expansion.
It wasn’t until the Q3 results that included the launch of WoW Classic that things began to look better. And then, of course, the national disaster of the pandemic hit and kept everybody home.
So things are looking up for the company. Surprising to me is the lack of depth in the portfolio at Blizzard and across the company. The only thing new in Q2 was the Call of Duty: Warzone battle royale addon to the Call of Duty franchise and the promise of the Shadowlands expansion for WoW some time this year.
Of course, maybe that shouldn’t surprise me. Activision is mostly Call of Duty these days, and Blizzard has some other titles, but WoW is still the revenue juggernaut and when it sags there isn’t anything to take up the slack. A new card pack for Hearthstone isn’t going to make a huge impact at this point and Diablo: Immortal still seems to be far from going live.
So I expect things will remain upbeat so long as we’re all encouraged to stay home as much as possible, and there no doubt be a spike when the Shadowlands expansion launches in Q4. But the company remains the same. It is WoW and everything else.
For those interested, the financial data, presentation, and audio of the conference call, can be found on the Activision Blizzard investor relations page.