Blizzard Sinks Slightly in the Low Key 2021 Financial Results Announcement

Citing the planned Microsoft acquisition, Activision Blizzard did not feel the need to go through the full dog and pony show when announcing their Q4 2021 and full 2021 financial results.

No fun graphics, no fancy slide deck, and no investor call for questions.   The minimum financial reporting requirements were met and that was it, no time for awkward questions about unions, the ongoing problems with the state of California, Blizzard’s product roadmap, or exactly how much cash Bobby Kotick will walk away with when he hands over the keys to Phil Spencer.

It will all be Microsoft’s problem soon enough I suppose… if the FTC is good with that.

As I noted at the end of my month in review post, should Microsoft’s purchase go through, we’ll probably be getting even less detail about what is going on at Blizzard, as they’ll be a part of a much bigger organization.  I’m not sure it will be like SOE being completely invisible in Sony’s financial statements back in the day, but they probably won’t get their own slide in a presentation once it happens.

Anyway, over on the investor relations site… and that will go away once the deal is done, so somebody back that up… you can find a press release and a PDF file that has all the bits and pieces of information we usually get.  Just, as I noted, no snappy graphics.

Overall the company earned $2,163 billion in Q4 2021, down from the $2.413 billion earned in the same quarter in 2020, but that was still a bit more than the advisory they put out in Q3 2021.

Blizzard itself earned $419 million in Q4 2021, down noticeably from the $493 million posted in Q3.  That is also off from the $433 posted in Q2 and the $483 million posted in Q1, making the normally lucrative holiday season the lowest quarter for the division.  But that is what happens when you don’t have anything new to sell for the holidays.

Overall Activision Blizzard brought in $8.8 billion in 2021, up from the $8.09 billion they booked in 2020, largely on the back of Activision figuring out new ways to make the Call of Duty franchise pay.

By itself Blizzard brought in $1.827 billion of that in 2021, down from the $1.905 billion the division earned in 2020, but that is what you get when you ship zero new products and have to rely on remakes and remasters.  Over at Massively OP, where they have been tracking the Monthly Active User numbers (MAU), they reported that Blizz only pulled in 24 million MAUs in Q3, down again, with the long term trend showing 14 million monthly users fewer than back in Q1 2018.

The report had this to say for Blizzard and its prospects:

  • Within the Warcraft franchise, fourth quarter World of Warcraft reach and engagement continued to benefit from the combination of the Modern game and Classic under a single subscription. In 2021, World of Warcraft delivered its strongest engagement and net bookings outside of a Modern expansion year in a decade. Hearthstone fourth quarter net bookings grew year-over-year, driven by a steady cadence of new content.
  • Blizzard is planning substantial new content for the Warcraft franchise in 2022, including new experiences in World of Warcraft and Hearthstone, and getting all-new mobile Warcraft content into players’ hands for the first time.
  • In the Diablo franchise, Diablo II: Resurrected sold through more units from its September release until the year end than any other Activision Blizzard remaster over an equivalent period. On mobile, Diablo Immortal concluded its public testing with positive feedback.
  • Blizzard is making strong progress on its pipeline, including new experiences in Warcraft, ongoing development in Diablo and Overwatch, and an exciting new IP.

Basically, various flavors of WoW, along with Diablo II Resurrected, carried most of the water for the division, though the company does like to be coy and put Hearthstone under the Warcraft IP banner.  But WoW still probably brought in close to a billion dollars in 2021, even with a foundering retail experience.

Nostalgia has paid off as WoW Classic has turned out to be as popular as many of us thought it would be.  I know I said I’d lay off him on his famous quote, but I really want to ask J. Allen Brack where Blizz numbers would be today if we really didn’t want vanilla.

As for the future, Diablo Immortal is still being dangled out there, as is the threat of some sort of mobile Warcraft related experience. (Some speculation on that here.)  Wake me when they have something to ship.  And there is a reference to the unannounced survival game that Blizzard announced last week, but it is so far out in the future it doesn’t even have a name yet, putting it somewhere behind Diablo IV and Overwatch 2, neither of which will see the light of day in 2022.

Still, things went pretty well for Blizzard considering their legal problems and the fact that they spent much of 2021 living off of 15-20 year old content.  But I suspect they’ll need to ship something new in 2022.

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