Videogame publisher Activision Blizzard beat Wall Street estimates for fourth-quarter adjusted sales on Monday, thanks to the success of the latest game in its Call of Duty franchise.
A string of launches in October and November, including
Call of Duty: Modern Warfare II, Warzone 2.0, and World of Warcraft: Dragonflight from the fantastical world of Azeroth, helped the company hold the attention of the gaming community.
As inflation squeezes budgets of American households, more gamers are expected to stick to their favorite gaming franchises, instead of experimenting with newer titles from other studios, helping companies such as Activision, analysts have said.
Modern Warfare II delivered the highest opening-quarter sell-through in the franchise’s history and crossed the $1 billion (roughly Rs. 8,275 crore) mark within 10 days of its late-October launch, the company said.
The company expects its full-year adjusted sales to grow at least in high-single digits, bolstered by the launch of games including Diablo IV.
Adjusted sales in the quarter ended December 31 came in at $3.57 billion (roughly Rs. 29,540 crore), compared with analysts’ average estimate of $3.16 billion (roughly Rs. 26,150 crore), according to Refinitiv data.
Activision’s upbeat results follow drab showings from rival Electronics Arts and Xbox maker Microsoft.
Activision’s $69-billion (roughly Rs. 5,70,100 crore) takeover by Microsoft is being challenged by the US Federal Trade Commission and being investigated by EU authorities. Activision said the companies are continuing to engage with regulators reviewing the transaction.
The end of Blizzard’s long-term partnership with China’s second-biggest gaming firm NetEase will rescind gamers’ access to the World of Warcraft game in the country until an alternative partnership is formed.
That is expected to hit the US company’s net bookings by $250 million (roughly Rs. 2,070 crore) in fiscal 2023, Benchmark analyst Mike Hickey wrote in a note last month.
Fourth quarter net income fell to $403 million( roughly Rs. 3,333 crore), or 51 cents per share, from $564 million (roughly Rs. 4,666 crore), or 72 cents per share, a year earlier.
© Thomson Reuters 2023