The lights are on
Since first quarter of Activision’s current fiscal year, CEO Bobby Kotick has been warning about performance due to the console transition. Today, the Call of Duty publisher has announced its fourth quarter financials, closing the year with better-than-expected net revenues.
This year marked Activision’s return to independence (though still public) company, after buying parent Vivendi’s controlling share in the company. This year saw net revenue of $4.583 billion, down slightly from 2012 year end of $4.856. Activision had been projecting $4.320 billion.
Performance was on the back of the Skylanders and Call of Duty franchises, respectively the #2 and #3 best-selling franchises of 2013. As of December 31, 2013, Skylanders had sold over $2 billion inclusive of games and figures. Over 175 million Skylanders figures have been sold around the world.
Additionally, Blizzard’s Starcraft II: Heart of the Storm was the best-selling PC game of 2013. Activision is looking to Blizzard for two of its three upcoming free-to-play titles: Hearthstone and Heroes of the Storm. Call of Duty Online (for the Chinese market) is the third.
Due to its strong performance, Activision will pay back $375 million of an outstanding loan. Shareholders will also see a cash dividend of $.20 per share.
Our TakeActivision expressed caution throughout the year, setting reasonable expectations and delivering revenues from its mega-franchises. Activision’s model of betting big on a small number of extremely popular intellectual properties continues to pay off.