Activision Blizzard sees revenues leap 38% as gaming replaces the pub

Activision Blizzard is the latest company to report healthy financial growth through the coronavirus period as revenues jump 38%.

The firm, which owns popular titles such as Call of Duty and Candy Crush, has seen share price increase 46% since the beginning of the year and it is clear why. Total revenues for the quarter ending June 30 were $1.9 billion, a year-on-year increase of 38%, while net income grew 76% to $580 million.

“Our mission to connect and engage the world through epic entertainment has never been more meaningful,” said Bobby Kotick, CEO of Activision Blizzard.

“Our 400 million players continue to experience fun, joy and accomplishment through our games. Our record engagement resulted in greater revenue and earnings per share than previously forecast. While economic uncertainty could have an impact on our near-term results, the initiatives that drove our growth for the first half of the year should also provide the foundation for long-term growth.”

Across the gaming segment, COVID-19 has proven to be a profitable period with more children at home from school and more adults needing entertainment without the pub as a distraction.

Financial results for most recent quarter (in millions, USD)
Company Revenue Year-on-year Profit Year-on-year
Activision Blizzard 1,932 38% 580 76%
Electronic Arts 1,459 20% 365 NA
Take-Two Interactive 831 53% 88 91%

It is somewhat difficult to get the whole financial picture from the gaming segment as many of these organisations are still under private ownership and therefore do not have to report results to the market. Some are part of larger corporations, where revenue/profit is not broken down than granularly, EPIC Games is part of the Tencent Group, for example.

This makes it a little bit more difficult to understand how profitable this segment is, but the above does offer a slim insight. Aside from financial results for the specific titles, there are other indicators to demonstrate success over the last few months:

  • Google saw a 100% year-on-year increase for ‘best online games’ as a search term over the course of March and April
  • Counterstrike: Global Offensive saw an increase of 360,000 players during March, and Dota 2 received 120,000 new players
  • Video game digital distribution service Steam saw a 50% increase in log ins during the opening weeks of lockdown in the UK
  • Nintendo sold more of half its games through digital channels in the most recent quarter, helping to improve profitability by 41%
  • Verizon saw gaming traffic across its network increase by 75% when lockdown was introduced in the US
  • Gaming voyeur service Twitch saw traffic grow 23% in March

There are plenty of indicators to keep an eye on for the gaming world, compensating for the lack of insight into financial performance. The interesting element of this growth will be how much will be retained when some semblance of normality returns to the world.

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