Activision Blizzard Fourth Quarter 2022 Financial Results - Record Breaking Growth and Larger Development Teams

Blizzard Posted 2023/02/06 at 3:49 PM by Archimtiros

fourth quarter financial resultsacquisition by Microsoft

CEO Bobby Kotick

"We ended 2022 with record quarterly net bookings as we delivered on our mission to bring epic joy to players. I’m grateful to our talented and hardworking teams for their many successes entertaining our hundreds of millions of players around the world. We look forward to a historic year, as we work toward merging with Microsoft. This merger will enable us to better serve our players, create greater opportunities for our employees, and allow us to succeed in an increasingly competitive global gaming industry.”Highlightscommitment to increasing representationActivision - 111 million monthly active users, up from 97 million in Q3 2022

Activision segment revenue and operating income grew approximately 60% year-over-year in the fourth quarter, driven by the performance of Call of Duty across console, PC and mobile.

Following its October launch, Call of Duty: Modern Warfare II delivered the highest opening-quarter sell-through in franchise history. The strong performance was broad-based, and digital sales were particularly robust on PC and in Asia-Pacific after Activision expanded distribution of the title to Steam's PC digital storefront. At the end of the fourth quarter, cumulative hours played were the highest in franchise history for a premium title at this stage of its release.

The November release of Warzone™ 2.0, including its new DMZ mode, also contributed to a strong year-over-year increase in franchise reach and engagement on console and PC in the fourth quarter, as well as record quarterly player investment. Year-over-year engagement growth in the free title has moderated following the launch, although next week sees the launch of Season 2, which will include new content, modes and gameplay updates aimed at delighting the community and accelerating growth. Our teams are also looking forward to further expanding the Warzone community with the release of Call of Duty: Warzone Mobile™ planned for this year.

Fourth quarter Call of Duty Mobile net bookings grew double-digits year-over-year to a new quarterly record, driven by enhancements to the player experience and well-received seasonal content.

Across the Call of Duty franchise, our teams are working to amplify the success of the fourth quarter, with 2023 plans including even more engaging live services across platforms and the next full annual premium release in the blockbuster series.

Blizzard Entertainment - 45 million monthly active users, up from 31 million in Q3 2022

Blizzard segment revenue and operating income grew approximately 90% year-over-year in the fourth quarter, as our teams executed against a substantial pipeline to deliver well-received content across key intellectual properties. Warcraft, Overwatch and Diablo grew strongly year-over-year and each delivered over $100M in net bookings.

In the Warcraft franchise, World of Warcraft delivered significant year-over-year growth in reach, engagement and net bookings in the fourth quarter following the September release of Wrath of the Lich King® Classic and the November launch of Dragonflight™. While early Dragonflight sales have not reached the level of the prior expansion, community feedback on the title has been positive. Blizzard has announced plans to deliver substantially more follow-on content for the expansion than in the past, and post-launch subscriber retention in the West is higher than recent expansions. Elsewhere in the Warcraft franchise, mobile title Warcraft: Arclight Rumble™ continues to progress well through regional testing.

The October launch of Overwatch 2 with a free-to-play model delivered the highest quarterly figures for player numbers and hours played in Overwatch history. Player investment is also off to a strong start, with fourth quarter in-game net bookings at the highest level to date for Overwatch. The team is working on an ambitious slate of regular seasonal updates, including PVE content, to engage and expand the community, as well as other ways for new and existing players to experience the Overwatch universe longer-term.

Diablo Immortal™ on mobile and PC also contributed to Blizzard’s fourth quarter year-over-year growth. Engagement and player investment trends for the title were stable at the end of the fourth quarter and into the new year. Diablo IV, the next installment in the genre-defining series, is planned for release on PC and console on June 6, 2023. This ambitious title will serve as the launch for a compelling live service, with regular seasons and story-driven expansions planned for years to come.

Licensing agreements with NetEase that covered the publication of several titles in China expired in January 2023. Nonetheless, we still expect very strong year-over-year financial growth globally for Blizzard in 2023, driven by both the launch of Diablo IV and live operations. Blizzard remains focused on finding alternative ways to serve the community in China.

King - 233 million monthly active users, down from 240 million in Q3 2022

King continued to outperform amid a challenging backdrop for mobile games. Fourth quarter segment revenue grew 6% year-over-year, equivalent to low double-digit growth on a constant currency basisE. King’s fourth quarter segment operating income was lower year-over-year, due to the year ago quarter benefiting from lower cash compensation expense and insurance claim proceeds.

King’s in-game net bookings increased 9% year-over-year, driven by the Candy Crush franchise. Candy Crush was the top-grossing game franchise in the U.S. app stores for the 22nd quarter in a row. King advertising revenue was stable year-over-year despite an ongoing difficult macro environment for digital advertising.

Candy Crush Saga™, the largest title in the Candy Crush franchise, celebrated its 10-year anniversary in November. In-game net bookings for the title grew approximately 20% year-over-year for every quarter of 2022, driven by continuous live operations improvements and highly-effective user acquisition. The team sees further opportunities to increase engagement, retention and payer conversion in the title, including through further social and competitive features and deeper seasonal content. In 2023, King will also intensify focus on applying its proven live operations strategy to other games in the portfolio.

acquisition by Microsoftwithout the usual conference call

12 3

Comment by nastywafflesxxxBring back Joyous Journeys now that servers have been unlockedComment by lucasrjNeatComment by kovee87Money money money money money!Comment by AedionMorris"Dragonflight has not sold as well as previous expansion"

So the theory that it's gonna take several expansions to win back everyone is at least partially true now.Comment by pawpurr"we ruined diablo and it made us soooo much money, we will keep doing this in the future" -- Bobby Kotick, 2023Comment by RusarulesMoney money money money money!Comment by CepitoreThey released two expansions during that quarter. What else would be expected? I’m preparing to laugh when they release their Q1 2023 numbers.Comment by Mardux11Something something dead game?Comment by miloticwell shadowlands and bfa crap affect dragonflight salesComment by Drakenden"Dragonflight has not sold as well as previous expansion"

So the theory that it's gonna take several expansions to win back everyone is at least partially true now.Comment by Butters05If I wanted to hear something from Bobby I would ask Bill CosbyComment by Revenor"Dragonflight has not sold as well as previous expansion"

So the theory that it's gonna take several expansions to win back everyone is at least partially true now.Comment by Villager720Honestly not surprised to hear that :

Dragonflight didn't sell as many copies as Shadowlands
Dragonflight is retaining more players than Shadowlands

It represents both the damage they did to the brand and how well they did with the Dragonflight course-correction.Comment by HareticGood to hear! Keep it up!Comment by Artek88wait till summary of q1 of 2023 and the influence of closing china region almost entirelyComment by VSozonovIf these are numbers for q4 2022 I don't understand how is DF retaining players better than Shadowlands, it's been out for only a month at the end of 2022, they will have some real numbers for q1 2023 report maybe. Not surprised that DF sold less than SL.Comment by lavishnessNo news from Starcraft sadgeComment by mark34932The most interesting part of this to me, is that for the entire SL beta, people were like, wow, this looks like a big old pile of awful!
LETS BUY IT AND FIND OUT!

Then all throughout the DF beta, everyone was like, o my god this looks incredible, this looks like they are finally fixing wow!
Let's just take it easy, not gettin fooled again!Comment by NotYetRatedBoth statements sound accurate. Shadowlands was getting hyped up like crazy and with covid and it's peak it resulted into being one of the fastest selling PC games. Shadowlands also left a pretty bad taste with the 9.1 and crazy alt unfriendliness so again, no surprise people have been skeptical.

As for Dragonflight, imo it wasn't really being hyped up all that much. The setting is also pretty mild in terms of story and villains. There isn't anything crazy that will draw your attention besides the reworked talent trees and all.

However.. the expansion is very good all around so the fact it's retention is so high is really not a surprise.

Hopefully they can keep this up with a banger 10.1 patch and so forth. I do think the smaller patches are great as well. Especially stuff like the Trading Post or Ret having a full rework, not to mention the other class changes that are coming (and tuning each week). It makes the game a lot more fresh to me.Comment by Squishyywait till summary of q1 of 2023 and the influence of closing china region almost entirely

12 3