Activision Blizzard has presented its business report for Q3 2021. The cash shop registers are glowing in games like Call of Duty: Warzone, Hearthstone, and WoW. However, the stock fell by 13% in pre-trading. The reason is apparently the postponement of Overwatch 2 and Diablo 4 to 2023.
How is Blizzard doing financially? On November 2, there was an earnings call for Q3 2021 at Activision Blizzard. Financially, it was a good quarter for the company:
- Above all, the success of Call of Duty is highlighted – here, CoD Warzone and Mobile are proving to be lucrative revenue sources. They are already looking forward to the release of CoD Vanguard.
- Everything is stable at Blizzard, they say: Diablo 2 Resurrected was the company’s most successful remaster, WoW retains its players, Hearthstone is stable. Blizzard’s revenue has increased by 20% compared to the previous year – primarily due to Diablo 2.
- In total, they exceeded the expectations and forecasts for the quarter.
Activision Blizzard earns the most when the game is already sold
This number stands out:
A metric appears in the financial reports that is called “In-Game Net Bookings”, which is the money Activision Blizzard earns through microtransactions made in the game – that is when the customer has already purchased the game.
The figure for Q3 2021 is a whopping $1.198 billion. That is more than half of Activision Blizzard’s total revenue. A lion’s share of the money will come from the free-to-play title Call of Duty: Warzone, but there are also increasing offers in WoW’s cash shop, such as a €25 mount in the shop.
Stock drops significantly after the postponement of Overwatch 2 and Diablo 4
Why did the stock drop anyway? Blizzard’s stock fell by 8% in after-hours trading following the earnings call.
This morning, in pre-trading, it is even cheaper. Compared to the price at market close on Tuesday evening, the stock has now lost about 13% of its value.
This is just a snapshot, however.
The share loss is apparently due to the postponement of Overwatch 2 and Diablo 4 to 2023. Originally, the release of both titles was planned for 2022.
Blizzard is chronically suffering from releasing too few new games. This allegedly also causes internal trouble with Activision Blizzard.
Moreover, Jen Oneal, the co-head of Blizzard, will leave the company. She was promoted to the top of the company only a few months ago after J. Allen Brack left the company following a lawsuit over sexism.
We have thoroughly discussed Blizzard’s situation in a podcast:
What else stood out? A major topic in the business report was once again the fight against the apparently rampant and systemic sexism at Activision Blizzard. Here, they have established a catalog of countermeasures:
- They want to implement a “zero-tolerance” policy against harassment
- The company has set the goal of increasing the proportion of women and non-binary people in the workforce by 50% over the next 5 years.
- They plan to spend $250 million over 10 years to support underrepresented groups to enter gaming and the tech industry.
- Activision Blizzard emphasizes that women already earn slightly more than men in the company on average. This was found by an independent investigation.
CEO Bobby Kotick draws consequences from the scandal at Activision Blizzard
