Activision Blizzard tops Q2 estimations despite economic slowdown

American video game maker Activision Blizzard revealed its financial results for the second quarter ended June 30, meeting analysts’ expectations despite the economic slowdown.

The company’s bookings hit $1.64 billion in Q2, surpassing Wall Street’s projection of $1.59 billion. However, it was still down 14% year-over-year as the pandemic-driven hype in the gaming industry sharply went down with people returning to their normal lives. Meanwhile, in-game bookings brought in $1.20 billion. 

The company reported earnings per share of $0.47, narrowly missing the $0.48 estimation of Wall Street analysts. The total number of its monthly active users, across Activision, Blizzard and King divisions, was 361 million.

While the Activision unit saw a yearly drop in revenue and operating income due to the lower engagement the Call of Duty franchise drove in Q2, the company expects to ‘usher a new era’ for the popular video game franchise in the fourth quarter, with the launch of Call of Duty: Modern Warfare II and Call of Duty: Warzone 2.0. It added that the Call of Duty Mobile net bookings were consistent with the Q1 results. Meanwhile, the company is also expected to launch the mobile version of Call of Duty: Warzone within this year. 

The Blizzard unit also saw a yearly decline in revenue and operating income during the second quarter. However, Diablo Immortal managed to drive high engagement among iOS and Android players, and ranked among the top-10 grossing games in the United States in June when it was first launched on the app stores. The subsidiary is also planning to launch new titles including Wrath of the Lich King Classic, World of Warcraft: Dragonflight and Overwatch 2 within this year, and Diablo IV in 2023. 

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Unlike Activision and Blizzard segments, King’s revenue and operating income managed to go up in the quarter, driven by its popular title Candy Crush. Despite the economic downturn which led to a sharp drop in ad revenues of many tech companies including Meta, Twitter and Snapchat, King’s ad business increased 20% year-over-year in the second quarter of 2022. In June, the subsidiary acquired AI firm Peltarion to improve its use of artifical intelligence and machine learning technologies. 

Aside from the financial results, the company also said Microsoft’s $68.7 billion Activision Blizzard acquisition is expected to close by the end of its 2023 fiscal year. The proposed deal is currently facing an antitrust investigation by the UK regulators.

In addition, while tech giants including Google, Apple, Microsoft, Tesla, Meta, Twitter, Shopify and many others have recently announced hiring pauses and lay-offs, Activision Blizzard said it kept growing its team in the second quarter.

‘’Even in a challenging economic environment, with so many companies announcing hiring freezes and layoffs, our development headcount grew 25% year-over-year as of the end of the second quarter,’’ said Activision Blizzard’s CEO Bobby Kotick.