Activision Blizzard Sees 35% Revenue Surge Across All Divisions

Despite facing a setback with the UK's decision to block its sale to Microsoft, Activision Blizzard found solace in its first-quarter financial results, which demonstrated growth across every division and key franchise. The company had initially planned to release these results on April 27 but decided to announce them earlier. A spokesperson stated that the decision was made to address questions already answered in the planned earnings release. Key financial highlights include: $2.38 billion in revenue, marking a 35% increase, $1.86 billion in net bookings, representing a 26% rise, and $740 million in net income, showing an 87% increase. The company attributed this broad-based growth to the performance of its five largest intellectual properties: Call of Duty, Candy Crush, Warcraft, Overwatch, and Diablo. Mobile net bookings saw double-digit year-over-year growth, primarily driven by Candy Crush, Call of Duty Mobile, and Diablo Immortal. The Activision segment experienced a 28% year-over-year revenue increase to $580 million, largely due to the success of Modern Warfare 2. However, the segment's monthly active users decreased by 2% year-over-year and 12% quarter-over-quarter to 98 million. Blizzard, the smallest division, achieved the largest percentage gain with a 62% increase in sales to $435 million. Although Overwatch 2 engagement decreased from the previous quarter, hours played remained about double what Overwatch was before transitioning to a free-to-play model. Blizzard's monthly active users were up 23% year-over-year but down 40% quarter-over-quarter. King, the largest contributor to the company's top and bottom line, posted an 8% year-over-year increase in segment net revenues to $739 million. Candy Crush was the top-grossing game franchise in US app stores for the 23rd consecutive quarter. Looking ahead, Activision Blizzard expects at least high-teens year-over-year growth for GAAP revenue in 2023, with the second quarter seeing at least 10% GAAP revenue growth and a 30% increase in net bookings. Strong pre-sales and demand for Diablo 4, scheduled to launch on June 6, are expected to drive these numbers.