Activision Blizzard’s revenue fall almost $700 million due to ‘lower engagement’ for CoD franchise

Activision Blizzard saw its revenue and profit decline in the second quarter ended June 30. Here are all the highlights from the company’s latest financial report.

Call of Duty: Modern Warfare II

Key takeaways

• Activision Blizzard reported net revenues of $1.64 billion, which is down $652 million (28.3%) compared with $2.29 billion for Q2 2021.
• The vast majority of revenue came from in-game purchases (microtransactions) and subscriptions, at $1.34 billion, down 22.4% year-over-year.
• The publisher’s product sales were $304 million, down 46.4% year-over-year.
• The company’s operating profit was $338 million, which is down 64.7% year-over-year.
• Activision Blizzard reported net income of $280 million, which is down 68% year-over-year.
• The company saw its MAU decline from 408 million in the second quarter of 2021 to 361 million in three months ended June 30, 2022.

Highlights for the company’s main divisions

• Activision cited “lower engagement for the Call of Duty franchise” as the main reason behind the revenue decline.
• However, the series’ net bookings on PC and console “grew sequentially” in the second quarter. And Call of Duty: Mobile bookings were “consistent with the first quarter.”
• Activision says the numbers will grow in the fourth quarter when it will launch Call of Duty: Modern Warfare II and a new Warzone game. These games are expected to become the main revenue drivers for the company.
• Blizzard saw its revenue and operating income decline year-over-year, though the numbers were higher compared to the first quarter.
• The studio plans to improve its financial results by releasing Overwatch 2 beta later this year. Blizzard is now also increasing its production capacity on World of Warcraft, thanks to its acquisition of Proletariat.
• Diablo IV, which is expected to come out in 2023, is designed to be the “foundation for an engaging live service, providing ongoing storytelling and new content for many years to come.”
• Candy Crush maker King continued to show consistent growth, with its revenue and operating income increasing year-over-year.
• The studio’s in-game net bookings grew 6% year-over-year, while its advertising business increased by over 20% year-over-year.