- Activision Blizzard reported net revenue of $1.8B USD for Q1 2019, exceeding its outlook of $1.7B but dropping overall compared to Q1 2018.
- Core franchises such as Call of Duty, Candy Crush, and Overwatch were cited as drivers of revenue during the quarter and will remain the focus of continued investment.
- Esports initiatives create “enduring appeal” for its core franchises, Activision said, citing the success of Overwatch League and announcing the first five owners of its new Call of Duty League franchise program.
Activision Blizzard reported its Q1 2019 earnings on Thursday, citing its profits on esports initiatives and continued support of its core franchises.
The company, which includes Activision Publishing, Blizzard Entertainment, and King Digital Entertainment, reported net revenues of $1.83B for the first quarter of 2019—higher than its initial outlook of $1.7B USD billion. Despite exceeding quarter expectations, revenues declined from $1.97B in Q1 2018.
Activision Blizzard is “refocusing” on its core franchises, CEO Bobby Kotick told investors on the call, forecasting increased investment in existing titles and communities. While the company will “selectively” invest in new IPs, Activision Blizzard will focus almost entirely on existing franchises.
One such investment is an esports franchise for Call of Duty that emulates the infrastructure of Overwatch League (OWL). That being said, Activision Blizzard granted franchises to existing OWL franchise owners who “recognize the scale of the opportunity from their partnerships with us on the Overwatch League.”
The first five owners of Call of Duty League franchise slots are Atlanta Esports Ventures, Envy Gaming, Sterling.VC, c0ntact Gaming, and OverActive Media.
Related Article: Breaking: First Five Call of Duty League Franchise Owners Revealed
Kotick told investors that city-based leagues foster passion as they grow fan base and subsequently, create value for shareholders. He cited “substantial” revenue from sponsors including Anheuser-Busch InBev, Coca-Cola, and State Farm, as well as selling the broadcast rights for tournaments.
Broken down by subsidiary, Activision, Blizzard, and King generated $317M, $344M, and $529M, in net revenue respectively.
Players spent more time in the games during Q1, Kotick said, with an average of 38 minutes per DAU in Candy Crush and double-digital time growth in Call of Duty: Black Ops 4.
Activision Blizzard is investing heavily in mobile, Kotick said, which includes ambitious projects “that will take time.” This will include mobile extensions to existing games, mobile reimaginings, and cross-platform games.
The company will continue to charge a premium upfront for AAA releases but is continually evaluating each franchise’s business model, investors were told, referring to free-to-play (F2P) and DLC (downloadable content).
