Activision Blizzard's Lack of New Videogames Hurts Earnings -- WSJ
August 09 2019 - 3:02AM
Dow Jones News
By Sarah E. Needleman
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 9, 2019).
Activision Blizzard Inc.'s revenue fell nearly 15% in the second
quarter, hurt by the videogame maker again not releasing any major
new games during the period.
The largest U.S. game publisher by market capitalization instead
leaned on content updates and special events for existing
franchises to keep players engaged, just as it did a year ago.
"I'm encouraged by the early momentum of our increased focus
across our key franchises," Activision Blizzard Chief Executive
Bobby Kotick. The next installment of Call of Duty, due out Oct.
25, includes a new multiplayer mode. A new mobile Call of Duty game
is also in the works.
For the second quarter, Activision reported a profit of 43 cents
a share on $1.4 billion in revenue, under generally accepted
accounting principles, down from 52 cents a share and $1.64 billion
a year earlier. On an adjusted basis, Activision Blizzard's results
implied a profit of 38 cents a share on net bookings of $1.21
billion -- both down from a year earlier, but better on net
bookings than the company's guidance and the average analyst
estimate on FactSet.
Digital net bookings fell 16% to $1.01 billion, while monthly
active users declined 5% to 327 million. The company did report an
increase in the number of hours people played Call of Duty.
Activision Blizzard maintained its full-year outlook on net
bookings of $6.3 billion but raised its full-year outlooks on
profit and revenue. It now expects profit of $1.41 a share on
revenue of $6.19 billion, up from its earlier estimate of $1.18 a
share and $6.03 billion, according to generally accepted accounting
principles.
Shares of Activision rose 7 cents to $49.40 after hours.
Earlier this year, Activision Blizzard announced plans to
eliminate around 775 people from its workforce of about 9,800. It
said the 8% head count reduction was part of a restructuring effort
aimed at centralizing sales, marketing and other functions -- and
that it also planned to hire 20% more developers to create more
content for its biggest franchises.
Activision Blizzard's peers -- Take-Two Interactive Software
Inc. and Electronic Arts Inc. -- also have reported earnings above
expectations for the quarter ended June 30.
The stock prices for all three companies slumped after President
Trump criticized the "glorification of violence" in videogames
following the weekend's mass shootings that left 31 people dead in
El Paso, Texas, and Dayton, Ohio. Two other politicians, House
Minority Leader Kevin McCarthy (R., Calif.) and Texas Lt. Gov. Dan
Patrick, joined in the criticism, with Mr. Patrick pointing out
that Activision Blizzard's Call of Duty was mentioned in the
alleged El Paso shooter's manifesto. The stocks have since
rebounded.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
August 09, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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