Activision Blizzard, the largest US video game publisher, reported revenue that beat analyst estimates, but adjusted sales were down 15 percent from a year earlier due to a soft launch of Call of Duty: Vanguard in the fall. past and a slow year for the gaming industry in general. Activision, which is in the process of being acquired by Microsoft, generated second-quarter adjusted revenue of $1.64 billion (approximately Rs. 13 billion), compared with analysts’ average projection of $1.6 billion (approximately Rs. 12.6 billion rupees). Adjusted revenue excludes deferred sales from online purchases. Adjusted earnings per share were 47 cents (about Rs 0.3), down nearly 50 percent from a year earlier and slightly below analyst estimates, according to data compiled by Bloomberg.
Last fall’s Call of Duty: Vanguard, which Activision says hasn’t performed as well as expected, has had a ripple effect on the company’s fiscal year. The game received negative reviews and faced stiff competition from new entries in the popular Halo and Battlefield series.
During the second quarter, Activision’s Blizzard division released Diablo Immortal, a new mobile entry in the action series. Activision’s Chinese partner NetEase delayed the release of Diablo Immortal on the world’s largest mobile app market by about a month, saying it needed more time. It was finally released on July 25. Activision did not provide revenue figures for the new Diablo game on Monday.
The video game industry has faced a slow year dealing with hardware supply chain issues plaguing consoles, inflation and a lack of blockbusters. Interest in gaming has also cooled as pandemic stay-at-home orders were lifted and people resumed outside interests and activities. Spending in the video game industry is expected to fall 8.7 percent this year, according to a report from analyst firm NPD Group.
Activision said it expects revenue and earnings per share to “remain lower year-over-year in the second half.” The shares were up less than 1 per cent in extended trading at $80.45 (approximately Rs. 6,500).
Call of Duty: Modern Warfare II, a new entry in the series, will be released on October 28. But the series will then skip to 2023, Bloomberg reported. Instead, Activision will release add-ons for Modern Warfare and other Call of Duty-related content. The next main game in the series, from studio Treyarch, is planned for 2024. Call of Duty is Activision’s biggest video game series and the titles often top annual sales charts. They have sold over 400 million units since the series began in 2003.
Activision said it will also release Blizzard’s Overwatch 2 games in early access on October 4 and Dragonflight, a new expansion for the online game World of Warcraft, later this year. Diablo IV will be out next year, the company said.
The Santa Monica, California-based publisher increased the developer headcount by 25 percent from a year earlier, in part due to acquisitions of Boston-based gaming company Proletariat, which will help with expansions of World of Warcraft, and Sweden-based AI company Peltarion. However, he said that he “remains aware of the risks, including those related to labor market and economic conditions.”
Microsoft announced the purchase of Activision in January. The Xbox maker pounced as Activision shares had suffered amid an ongoing sexual misconduct scandal last year. Activision’s shares have gained around 20 per cent since the January announcement, although they are still trading well below the offer price of $95 (approximately Rs. 7,500) per share, suggesting market uncertainty over the completion of the deal. agreement. Lina Khan, the newly appointed head of the Federal Trade Commission, has indicated that she plans to take a tough stance against tech mergers. Activision has said it expects the transaction to close in Microsoft’s fiscal year ending June 2023.
© 2022 Bloomberg LP
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