Activision Blizzard beats estimates, boosted by mobile games

ACTIVISION Blizzard beat analysts’ estimates for bookings and profit in the third quarter, boosted by its mobile gaming division.

The video game publisher reported net bookings, which excludes deferred sales from online purchases, fell 2.6 per cent to US$1.83 billion. That was still ahead of the US$1.7 billion average analyst forecast, according to data compiled by Bloomberg. Adjusted earnings per share were 68 US cents, ahead of analysts’ estimates for 50 US cents, according to data compiled by Bloomberg.

Activision said its mobile platform net bookings grew 20 per cent in the period from a year earlier to about US$1 billion, reflecting the enduring popularity of games like Candy Crush and the June release of Diablo Immortal followed by its release in China in July.

Smartphone game Diablo Immortal was Activision’s big release for the first half of the year. Made in partnership with NetEase, the mobile iteration of Blizzard’s popular horror role-playing game franchise earned the top spot on Google’s Play Store and Apple’s App Store, receiving more 20 million downloads across smartphones. However, the game has an average 4.1 review score on Android and 4.5 on Apple’s App Store, indicating that fans have begun to cool on the game.

Microsoft is in the process of acquiring Activision Blizzard for US$69 billion, although regulators are heavily scrutinising the deal for signs that it could limit Call of Duty to Microsoft’s Xbox console, cutting out Sony Group’s PlayStation. Microsoft has disputed that it will limit the game to Xbox.

Activision’s current quarter is stacked with new releases, including the recent Call of Duty: Modern Warfare II. The latest title has been an overwhelming success, topping more than US$1 billion in sales in the first ten days of its release, the fastest pace of any game in the highly successful franchise. A separate mode of the game, Call of Duty: Warzone 2.0, will be released on Nov 16. Another hit, the popular hero-shooter Overwatch 2, also released in October, attracted 25 million players within its first 10 days. Also coming this month, the next World of Warcraft expansion, Dragonflight.

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Investors will be focused on the success of these games, and particularly on their potential for repeatable revenue through 2023 when Activision Blizzard will skip its annual Call of Duty release for the first time. The next Call of Duty game is planned for 2024 from its Treyarch studio. Overwatch 2’s much-anticipated player-versus-environment mode - the game’s greatest deviation from its blockbuster 2016 predecessor - will release sometime in 2023.

Activision shares have gained 6.9 per cent this year, outperforming rivals due to the Microsoft purchase. BLOOMBERG