Activision Blizzard Reports Q4 Earnings, Layoffs Announced, Netease Partnership Extended

Activision Blizzard reported their Q4, 2018 earnings report today which missed analyst estimates; revenues came in at $2.84B while analysts expected $3.04B. The company also laid off ~8% of its total employees (775 employees) in non-development positions, mostly in publishing and eSports.

On a more positive note, the company has committed to increasing its development budget with the total number of developers working on Call of Duty, Candy Crush, Overwatch, Warcraft, Hearthstone, and Diablo set to increase by 20% in 2019. Activision Blizzard also extended their partnership with Netease until 2023. Netease currently publishes all of Activision Blizzard's games in China and is co-developing Diablo: Immortal.

It's been a tough for Activision Blizzard lately. The company's stock price is down 50% since Blizzcon and the infamous Diablo: Immortal PR disaster. Time will tell if the company will recover from these blunders.

Business Highlights by Division:

Activision

Activision had 53 million Monthly Active Users (MAUs) in the quarter, growing double-digits quarter-overquarter.

Call of Duty was again the number-one selling console franchise worldwide for the year, a franchise feat accomplished for nine of the last 10 years. In its launch quarter, Call of Duty: Black Ops 4 sold through more units than Call of Duty: Black Ops III, with PC units more than tripling. Full-game downloads were over 40% of Call of Duty: Black Ops 4 console sell-through, versus approximately 30% for the prior release, Call of Duty: WWII.

The successful launch of Spyro® Reignited Trilogy in the fourth quarter and the ongoing contribution of Crash Bandicoot. Sane Trilogy, which has sold-in over 10 million units since its 2017 release, highlight the enduring nature of Activision’s classic franchises.

Blizzard
Blizzard had 35 million MAUs in the quarter, as Overwatch® and Hearthstone® saw sequential stability and World of Warcraft® saw expected declines post-expansion-launch.

Building on an 11-year partnership, Blizzard extended its joint venture with NetEase to publish its games in China through January 2023.

King

King had 268 million MAUs in the quarter, growing sequentially, driven by the successful launch of Candy Crush Friends Saga.

This quarter, King had two of the top-10 highest-grossing titles in the U.S. mobile
app stores for twenty-one quarters in a row, with Candy Crush Saga at #1 again.

Source: Q4 2018 Earnings Release