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Activision Revenues Up, Operating And Net Income Down In First Quarter
Activision is a changed company, with a quarter that has seen the company complete its acquisition of mobile giant King and bring on Major League Gaming. The result is a company raking in more revenue than the prior year by 29 percent, even as operating and net income fall.
Revenue for the quarter totaled $1.455 billion, soundly beating estimates. This has led Activision to raise its sales outlook for the coming quarter and the full year.
Operating income has dropped during the quarter by 15 percent to $461 million. Net income dipped 17 percent to $336 million.
The quarter also marks an enormous jump in digital revenue for the publisher. That segment reached a record $926 million, increasing 59 percent year-over-year. Digital represented 64 percent of Activision’s revenue for the quarter.
The publisher has started leaning more heavily on monthly active users (MAU) as an engagement metric, indicating growth of 10 percent to 55 million. Blizzard MAUs climbed 23 percent year-over-year to 26 million thanks to Hearthstone and Heroes of the Storm. Hearthstone revenue climbed 20 percent year-over-year, but no game-specific revenue was cited.
Activision will be holding an investor call this afternoon. We’ll update and provide additional reporting as appropriate.
[Source: Activision]
Our Take
The King acquisition has completely reshaped Activision’s revenue mix. Last year, 59 percent of revenue was related to consoles, 30 percent to PC, and 7 percent to mobile. That has shifted to 53, 27, and 17 respectively. In particular, mobile revenue jumped to $243 million from $86 million on the back of Candy Crush and other King games.
Monthly active users as a key metric is harder to parse than revenue. There are a number of free-to-play games I log into each month in which I don’t spend a dime. Showing up to browse isn’t the same as opening the wallet.
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