During today’s conference call over at Activision Blizzard detailing their Q1 2014 results, some interesting and assuring information was shared. The conference call covered many things, but, as one might expect, it covered what they have been doing well in addition to what followers can expect going forward.
One of the major themes of the call was about how surprisingly well Activision Blizzard performed in Q1 2014, piggybacking off of the amazing transformational success experienced during 2013. While Q1 success came from essentially all elements of their portfolio, they did cite Blizzard Entertainment’s digital franchises as strong elements of it all. More specifically, they noted that Hearthstone performed surprisingly well (more than 10 million registered users as of its launch on Windows and Mac in March 11, 2014). Of course, they also applauded World of Warcraft (despite a drop in subscribers) and Diablo as contributing to that success.
It was noted that while Q1 was a “solid start” for Activision Blizzard, it is expected that Q2 will not be nearly as successful. They cited the fact that there are no major releases planned for Q2 as well as an expected decrease in online subscriptions. And most importantly, they cited the increased spending that will have to take place in order to fully market their major releases coming towards the back end of 2014. Like Q2, Q3 will also have to endure the increased spending for marketing, which will lead to decreased operating revenue.
Boldly enough, Activision Blizzard claimed that they will have the strongest release lineup in history during the back half of the year. This lineup will be consisting of Destiny in September, Skylanders in October, and Call of Duty in November. Whether they were referring to this being the strongest lineup in their own personal history or in the entire games industry was a bit unclear. Regardless, it was certainly a bold claim to make that I hope finds itself justified later this year.
Analyzing a changing industry, they mention that a high margin digital business will indeed be coming as the future unfolds. Specifically, this is attributable to the increased emphasis on digital gaming and interactions that have come along with the new wave of consoles. From there, they went on to confirm that they will be showing off three AAA titles at E3: Destiny, Skylanders Trap Team, and Call of Duty: Advanced Warfare. No surprises there, but the confirmation is always nice to have.
So much was covered in today’s conference call. Indeed, the sheer breadth of it all made it abundantly clear why Activision Blizzard is such a force to be reckoned with in the games industry. With E3 right around the corner, all these claims and information become so much more interesting to hear.