Activision Blizzard has presented its financial report for the last quarter of 2017 and for the whole year. We have gained three insights about the company behind Overwatch, Destiny, and WoW.
Activision Blizzard is one of the largest video game corporations in the world. Although not quite as big as the Chinese giant Tencent, it is a giant here in the West. In 2017, it made 7 billion US dollars in revenue.
We look at the three most interesting statements from the current financial report.
50 minutes of daily playtime – Activision wants to be like Facebook
For the second consecutive quarter, Activision Blizzard has achieved that players spend 50 minutes daily on their games. And this applies on average to the 385 million monthly active users counted by Activision in Q4.
This puts Activision Blizzard on par with some of the “most engaging online connected” platforms in the world, as it is said: These are the platforms that captivate users the most. This surely refers to platforms like Facebook, YouTube, or Twitter.
And indeed: According to a statistic from the New York Times, users spent 50 minutes daily on the platforms Facebook, Instagram, and the Messenger platforms in Q1 2016.
The own closed ecosystem that satisfies all gaming desires
This demonstrates Activision’s effort to create a unique ecosystem in which players spend time and do not need to leave to satisfy all their gaming desires. Activision Blizzard wants its games to play a significant role in users’ lives, engaging them daily and continuously.
The Blizzard launcher, for instance, offers players the ability to switch from one game to another at the push of a button:
- There are “cross” rewards. In 2017, Blizzard tried to tempt Overwatch players with the flagging MOBA Heroes of the Storm.
- Through messages in the launcher and email, customers are constantly informed about new developments in the games of its own ecosystem.
- Through patches and DLCs, the games remain fresh.
Another number from Blizzard comes into play here. Blizzard had 40 million active users per month especially with Overwatch and Hearthstone, although hardly anything happened in 2017: No new game, no big expansion – only advancing the existing games.
In the future, the Overwatch League is supposed to ensure that the bond becomes even stronger.
4 billion dollars in microtransactions – and hardly any trouble
The figure that most gaming media are currently working on is the 4 billion US dollars revenue from microtransactions in 2017. These are “in-game purchases.” They have become more important for Activision Blizzard than classic DLCs, although those also performed outstandingly.
It is said that although the Zombie DLC for Call of Duty: Black Ops 3 was the best-selling addon on PlayStation in North America in 2017, players spent more money on in-game purchases than on DLCs for Destiny and CoD in 2017.
It should be noted that half of these microtransactions come from the Candy Crush publisher King. This leaves 2 billion US dollars that games like Overwatch, Hearthstone, Destiny 2, or Call of Duty have generated.
Minor reprimand for Destiny 2 in the report
Although there was a major controversy over microtransactions in 2017, Activision Blizzard remained largely unscathed by such issues. Only with Destiny 2 was there some trouble regarding the cash shop. However, this had other reasons: Players found that the rewards available in the shop actually belonged as rewards in the game itself.
Destiny 2 is indeed the only game that receives at least an indirect reprimand in the financial report. It is noted under the “positive milestone”: We have created a roadmap based on player feedback for Destiny 2.
It sounds harmless, but stands out when everything around it is only milestones and superlatives.
Candy Crush on par with Destiny or WoW
Activision Blizzard’s strategy is to rely on strong brands. However, the core gamer may find it shocking what it considers a strong brand.
In what context would one otherwise name “Bubble Witch” and “Pet Rescue” in the same sentence with “Diablo” and “Starcraft”?
With the acquisition of King a few years ago, Activision Blizzard significantly strengthened its mobile business and now considers its franchises to be “just as important” as the established game franchises from Blizzard (Warcraft, Diablo) or from Activision (Call of Duty, Destiny).
Thus, King and its mobile franchises play a central role in Activision’s concepts. This is clearly evident from the financial report.
In this mood, it fits that one of the next games from Blizzard may not be a blockbuster, but a mobile game based on the Warcraft franchise.
More about the current gaming market and the importance of microtransactions and similar things:
4 years old game beats Destiny 2 in digital revenue on PS4, Xbox One
