With the Q2 2019 financials now out, it looks like both Activision and Blizzard have been fairly quiet on the sales front. While the latter has reported a dip in its monthly active users (MAUs) for the past two quarters, the former has seen a big increase in its revenues. The Activision Q2 2019 financials report that the company’s revenues grew 34% year-over-year (y-o-y) to $3.09 billion. The Q2 2019 revenues for Blizzard, meanwhile, rose to $1,547 million, an increase of 20% over Q2 2018.
The company reported quarterly revenues of $5.07 billion, which is up year-over-year by 15 percent, but down 1 percent from the previous quarter.
Activision Blizzard’s quarterly report showed up sales of $3.95 billion, up 13% over Q2 of 2018. The company has been under a cloud for a while, but with recent scandals involving CEO Bobby Kotick and COO Brian Kelly, the cloud has gotten even heavier.
The headline for our report of Activision-Q1 Blizzard’s 2021 financials – Blizzard has lost almost 29 percent of its total active playerbase in three years – went viral throughout social media and Reddit in May, and we received a lot of unexpected attention here at MassivelyOP. For several years, we, along with many other journalists and gamers, had been highlighting the company’s dwindling user base, shady metrics, and shoddy pipeline; we’d documented multiple incidents of mass layoffs, the Blitzchung boycott, dodgy stock deals, the exodus of veteran developers, multiple labor uprisings and compensation uproar, and a blatant attempt to bribe female employees to disclose their sexual orientation. So, although the piece was routine for us, the moment marked a revelation and awakening for the industry as a whole.
We had no idea that Activision-Blizzard was going to face an even greater reckoning at the time.
Following a two-year investigation, the California Department of Fair Employment and Housing filed a defamatory sexual discrimination and sexual harassment complaint against Activision-Blizzard on July 20, 2021. Over the last two weeks, the gaming industry has been bombarded with a steady stream of leaked memos, gaslighting, press statements, denials, promises, and apologies from both current and former Activision-Blizzard executives, all of which have been met with an understandably enraged chorus of victims and employees demanding more and more abuses and lies. The first reaction from Acti-Blizz was one of outright denial and deflection. Protests were held by gamers. With apologies in hand, J. Allen Brack, Mike Morhaime, and Chris Metzen arrived. Then there was Fran Townsend’s aggressive letter, which prompted workers to criticize the company’s reaction and conduct a huge walkout on Wednesday. Sponsorships for the company’s esports leagues started to dwindle. Journalists revealed how widespread the corruption was. Developers demanded the formation of a labor union. And players have been debating whether or not they should continue to play Blizzard’s games.
Instead of investigating the allegations and safeguarding employees, Activision-Blizzard CEO Bobby Kotick waited an entire week for a public address that failed to meet any of the employees’ demands; instead, it promised to fire offending managers and hired a law firm known for union-busting and helping companies navigate “the challenges of government investigations.”
That brings us to this morning, when Acti-Blizzard announced that J. Allen Brack had stepped down as Blizzard’s president after less than three years to “pursue new opportunities,” and had been replaced by a pair of executives, one of whom was the former head of Vicarious Visions and the other a former Xbox executive. We had anticipated that Brack would be the one to blame (our precise words were “he’s toast”), but both Kotick and Townsend have remained in their positions, and it’s becoming apparent that Activision has taken advantage of the chance to consolidate control at Blizzard.
Activision-Blizzard has released its Q2 investor report this afternoon. Readers may remember that, after huge layoffs and the Blitzchung boycott in 2019, the company’s sales fell for five consecutive quarters in Q1 2019, Q2 2019, Q3 2019, Q4 2019, and Q1 2020. COVID ultimately assisted the business in turning things around in Q2 2020, with improved results in Q3 2020, Q4 2020, and Q1 2021. However, as we previously said, the company’s public relations suffered during the first half of this year as a result of yet another wave of layoffs and a dispute over Bobby Kotick’s excessive compensation.
The findings for Q2 are now available; Q2 includes April, May, and June, and therefore does not include any response to the late-July sexism controversy. In comparison to the same quarter last year, Activision-Blizzard experienced a $370 million boost in revenue, owing mainly to Call of Duty.
“Activision Blizzard’s net revenues reported in accordance with GAAP for the quarter ended June 30, 2021 were $2.30 billion, compared to $1.93 billion in the second quarter of 2020. Digital channels generated $2.03 billion in GAAP net sales. The GAAP operating margin was 42%. In the second quarter of 2020, GAAP profits per diluted share were $1.12, up from $0.75 in the previous quarter. Activision Blizzard had a non-GAAP operating margin of 44% and profits per diluted share of $1.20, compared to $0.81 in the second quarter of 2020.”
Blizzard, of course, should have benefitted from the fact that it eventually released WoW Classic Burning Crusade and the long-awaited World of Warcraft 9.1 in June, as well as opening preorders for Diablo II Resurrected. Even while World of Warcraft income increased this quarter (by an undisclosed “double-digit percentage”) over Q2 2020, Blizzard nevertheless lost another million monthly active users across all of its titles.
Since the beginning of 2018, the business has lost 12 million players, or 31%, with three million of them leaving in Q4 2020. As usual, we’d like to point out that Blizzard reports MAUs in order to obscure which games are gaining and losing players:
In the first quarter of 2018, 38 million dollars were spent. 37 million in the second quarter of 2018 In the third quarter of 2018, 37 million dollars were spent (BFA) In the fourth quarter of 2018, 35 million dollars were spent (mass layoffs) 32 million in the first quarter of 2019 32 million in the second quarter of 2019 33 million in the third quarter of 2019 (WoW Classic) 32 million in the fourth quarter of 2019 (Blitzchung) 32 million in the first quarter of 2020 (COVID-19) 32 million in the second quarter of 2020 (COVID-19) 30 million by the third quarter of 2020 (COVID-19) In the fourth quarter of 2020, there will be 29 million people (COVID-19, Shadowlands) 27 million in the first quarter of 2021 In the second quarter of 2021, there will be 26 million people (TBC Classic, WoW 9.1)
The press statement reiterates what Kotick stated in his letter last week about the company’s internal culture. The employee coalition has already rejected it.
“Following significant accusations about Activision Blizzard’s employment, pay, and workplace policies, the firm is moving quickly to guarantee a safe and inviting work environment for all workers. We’ve hired a law firm to examine our rules and procedures to make sure we’re following best practices for fostering a courteous and inclusive workplace. Our Compliance and Employee Relations teams will be bolstered with more personnel, enhancing our ability to investigate employee complaints. We’re establishing safe places for workers to speak out and offer suggestions for change, which will be monitored by third parties. We’ll be assessing managers and leaders throughout the business to see whether they’re following our procedures for analyzing allegations and enforcing appropriate penalties. In addition, we will increase our efforts to guarantee that diverse candidate slates are considered for all vacant jobs. The company’s leadership is dedicated to providing the most friendly, pleasant, and secure environment possible.”
As soon as the conference call begins, we’ll update with the pertinent information.
Notes from the conference call with investors
• Kotick is repeating his previous comments on harassment and discrimination. He’s presented the new Blizzard leaders and emphasized Allen Adham’s presence (he returned in 2016). He reiterated that offenders and supervisors found in breach of the behavior rules would be fired. There isn’t anything fresh to say that hasn’t already been stated (and rejected by workers). • Acti-Blizz describes the debut of WoW Burning Crusade Classic as “well-received.” The decline in MAUs is ignored. • Diablo Immortal will not be released until the first part of 2022. Reading between the lines, it seems like they returned it for extensive retooling. Blizzard was still planning a worldwide debut for this year last quarter, so this is certainly a setback.
• The slides clearly show that Blizzard’s revenue decreased year over year in Q2 2020, blaming “product timing for Hearthstone and reduced Overwatch League revenue.” • The first query concerns the controversy. The response included no fresh information. Activision has previously stated the same thing, and it has been dismissed as inadequate. • In 2022, promising Blizzard titles will finally see the light of day. • As the world reopens post-COVID, a bit on player patterns. The response is essentially the same as it was last quarter: they still have momentum, there’s a long-term trend toward more people gaming than before, and so on. • Inquiry into Blizzard morale and “Blizzard pride,” as well as if the scandal is having an effect on productivity. Jen Oneal responds by praising developer enthusiasm and team growth, claiming that game creation takes care of itself when individuals feel “comfortable and encouraged.” Allen Adham joins the conversation to discuss how the new pipeline is helping to create a new culture at Blizzard (PC, console, mobile, new franchises, and new genres). • An analyst inquires about the continuing crackdown on Chinese gaming regulations (which we just discussed this morning), particularly in relation to Call of Duty and CoD Mobile. Acti-Blizz touts its hiring in the CoD and mobile sectors, and claims it’s collaborating with Chinese partners in the “changing environment,” which includes this problem. However, the firm claims that China now accounts for just 5% of its net bookings, so it doesn’t seem to be overly concerned.
In the first quarter of 2019, Activision Blizzard reported a $1.71 billion revenue for the quarter (up from $2.2 billion in Q1 2018), but the company also saw a decrease in its net income, with $397 million in net income in the quarter (down from $1.1 billion in Q1 2018). The reason for the decline is due to the declining number of users (MAUs) who play Activision games on PC. Activision Blizzard is a game-publishing company that publishes games on multiple platforms, but the report did not give specifics on the breakdown of its revenues by platforms.. Read more about activision revenue 2021 and let us know what you think.
This article broadly covered the following related topics:
- blizzard layoffs 2020
- activision q1 2021
- blizzard controversy 2021
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- blizzard fires employees 2021