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Activision Blizzard Q4 CY2022 Financial Results

MarcoP90

MarcoP90

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Selected Business Highlights

Activision Blizzard delivered 43% year-over-year net bookings growth and record segment financial results in the fourth quarter. Net bookings grew 49% year-over-year on a constant currency basisE. Amid an uncertain macro environment, our focus on expanding key intellectual properties across platforms, geographies and business models positions the business for further growth.

Strong execution by our talented teams enabled each of our business units to break records in the fourth quarter. At Activision, Call of Duty®: Modern Warfare® II delivered the highest opening-quarter sell-through in franchise history. Blizzard reported its highest quarterly net bookings to date, driven by strong growth for Warcraft® and the reinvigoration of Overwatch® and Diablo®. At King, Candy Crush® once again delivered a record performance. Activision Blizzard net bookings on the mobile platform grew mid-teens year-over-year while overall in-game net bookings grew 46% year-over-year.

Our robust product pipeline, live game opportunity, and ongoing focus on operational discipline create a foundation for strong financial performance in 2023. While we remain cognizant of risks, including those related to our execution, economic conditions, the labor market, and exchange rates, we expect at least high-teens year-over-year growth for GAAP revenue, and at least high-single digit year-over-year growth in net bookings and total segment operating income for 2023. We also expect interest income to be significantly higher year-over-year in 2023 given the current rate environment.

For the first quarter, we expect at least high-teens year-over-year growth for GAAP revenue, at least mid-teens year-over-year growth for net bookings, and at least high-single digit year-over-year growth for total segment operating income. The first quarter will see significant development and marketing investment in live operations and future releases, including the June launch of Diablo IV.

In the fourth quarter we continued to invest in growing our development teams and in our goal of being the model workplace in our industry. Our game development teams grew over 25% year-over-year in 2022. We shared our latest representation update in the quarter, which showed that we increased our representation for those who identify as women or non-binary to 26% globally, as of the end of November, versus 24% a year earlier. Representation for underrepresented ethnic groups increased to 38% from 36% in the US over the same period.
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Activision

  • Activision segment revenue and operating income grew approximately 60% year-over-year in the fourth quarter, driven by the performance of Call of Duty across console, PC and mobile.
  • Following its October launch, Call of Duty: Modern Warfare II delivered the highest opening-quarter sell-through in franchise history. The strong performance was broad-based, and digital sales were particularly robust on PC and in Asia-Pacific after Activision expanded distribution of the title to Steam's PC digital storefront. At the end of the fourth quarter, cumulative hours played were the highest in franchise history for a premium title at this stage of its release.
  • The November release of Warzone™ 2.0, including its new DMZ mode, also contributed to a strong year-over-year increase in franchise reach and engagement on console and PC in the fourth quarter, as well as record quarterly player investment. Year-over-year engagement growth in the free title has moderated following the launch, although next week sees the launch of Season 2, which will include new content, modes and gameplay updates aimed at delighting the community and accelerating growth. Our teams are also looking forward to further expanding the Warzone community with the release of Call of Duty: Warzone Mobile™ planned for this year.
  • Fourth quarter Call of Duty Mobile net bookings grew double-digits year-over-year to a new quarterly record, driven by enhancements to the player experience and well-received seasonal content.
  • Across the Call of Duty franchise, our teams are working to amplify the success of the fourth quarter, with 2023 plans including even more engaging live services across platforms and the next full annual premium release in the blockbuster series.
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Blizzard

  • Blizzard segment revenue and operating income grew approximately 90% year-over-year in the fourth quarter, as our teams executed against a substantial pipeline to deliver well-received content across key intellectual properties. Warcraft, Overwatch and Diablo grew strongly year-over-year and each delivered over $100M in net bookings.
  • In the Warcraft franchise, World of Warcraft delivered significant year-over-year growth in reach, engagement and net bookings in the fourth quarter following the September release of Wrath of the Lich King® Classic and the November launch of Dragonflight™. While early Dragonflight sales have not reached the level of the prior expansion, community feedback on the title has been positive. Blizzard has announced plans to deliver substantially more follow-on content for the expansion than in the past, and post-launch subscriber retention in the West is higher than recent expansions. Elsewhere in the Warcraft franchise, mobile title Warcraft: Arclight Rumble™ continues to progress well through regional testing.
  • The October launch of Overwatch 2 with a free-to-play model delivered the highest quarterly figures for player numbers and hours played in Overwatch history. Player investment is also off to a strong start, with fourth quarter in-game net bookings at the highest level to date for Overwatch. The team is working on an ambitious slate of regular seasonal updates, including PVE content, to engage and expand the community, as well as other ways for new and existing players to experience the Overwatch universe longer-term.
  • Diablo Immortal™ on mobile and PC also contributed to Blizzard’s fourth quarter year-over-year growth. Engagement and player investment trends for the title were stable at the end of the fourth quarter and into the new year. Diablo IV, the next installment in the genre-defining series, is planned for release on PC and console on June 6, 2023. This ambitious title will serve as the launch for a compelling live service, with regular seasons and story-driven expansions planned for years to come.
  • Licensing agreements with NetEase that covered the publication of several titles in China expired in January 2023. Nonetheless, we still expect very strong year-over-year financial growth globally for Blizzard in 2023, driven by both the launch of Diablo IV and live operations. Blizzard remains focused on finding alternative ways to serve the community in China.
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King

  • King continued to outperform amid a challenging backdrop for mobile games. Fourth quarter segment revenue grew 6% year-over-year, equivalent to low double-digit growth on a constant currency basisE. King’s fourth quarter segment operating income was lower year-over-year, due to the year ago quarter benefiting from lower cash compensation expense and insurance claim proceeds.
  • King’s in-game net bookings increased 9% year-over-year, driven by the Candy Crush franchise. Candy Crush was the top-grossing game franchise in the U.S. app stores1 for the 22nd quarter in a row. King advertising revenue was stable year-over-year despite an ongoing difficult macro environment for digital advertising.
  • Candy Crush Saga™, the largest title in the Candy Crush franchise, celebrated its 10-year anniversary in November. In-game net bookings for the title grew approximately 20% year-over-year for every quarter of 2022, driven by continuous live operations improvements and highly-effective user acquisition. The team sees further opportunities to increase engagement, retention and payer conversion in the title, including through further social and competitive features and deeper seasonal content. In 2023, King will also intensify focus on applying its proven live operations strategy to other games in the portfolio.
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Previous threads

CY2022

Q1 - https://www.installbaseforum.com/fo...report-revenue-22-yoy-mau-53-million-yoy.731/
Q3 - https://www.installbaseforum.com/fo...on-blizzard-q3-cy2022-financial-results.1189/
 
The damage done by the last few expansions and all the lawsuit disaster clearly had an impact on Dragonflight which is really good.
 
I wish we knew MWII sales so we could compare with Scarlet/Violet tomorrow. T2 just released figures as well and GTAV only shipped ~15M in 2022 calendar year so Pokemon & COD battle for #1 spot (Minecraft 2022 unknown right now, probably did 20M).
 
m051293 said:
I wish we knew MWII sales so we could compare with Scarlet/Violet tomorrow. T2 just released figures as well and GTAV only shipped ~15M in 2022 calendar year so Pokemon & COD battle for #1 spot (Minecraft 2022 unknown right now, probably did 20M).
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"Only" 15 M is hilarious considering we are talking about a 2013 game.
 
Astandahl said:
"Only" 15 M is hilarious considering we are talking about a 2013 game.
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Haha, it was doing 18-20M/year for a stretch of years so I had that in the back of my mind.

RDR2 just added another 7M for the year as well, and crossed 50M shipped. GTAV has crossed 175M shipped (what comes first, 200M or GTAVI?).
 
Lelouch0612 said:


At the exception of the WoW expansion, those are pretty good results for Blizzard, especially Overwatch 2.
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Yeah if you were to go with internet discourse one could imagine OW2 is deader than dead, really surprised in a good way to see the game doing this great!

Would like to see more concrete numbers from Diablo Inmortal.
 
I “love” how they write a lot off stuff but never the actually sales of each game.
And I love Nintendo because of the same thing!😅
 
Jorge said:
Yeah if you were to go with internet discourse one could imagine OW2 is deader than dead, really surprised in a good way to see the game doing this great!

Would like to see more concrete numbers from Diablo Inmortal.
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People are thinking OW2 is dead?

It seems to be pretty populate to me. On Xbox most played is at 12th, so it's not a success like Fortnite or Apex, but is doing fine.
 
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$100M+ for OW2 is nice but it still feels like a huge drop from the hype and success of the first game. I'm guessing $200-300M in a year, OW2 seems to have dropped off notably in popularity.

OW singlehandedly pushed Blizzard revenues to $700M+, launch likely generated ~$400M. Year revenue was $1B iirc. A lot of that was due to being a boxed launch rather than F2P, so it will be interesting to see OW2's legs in revenue, if the new monetisation model will pay off. Hard to judge though with the new Warcraft expansion, Diablo Immortal and Diablo 4 soon all being tied in one.

Biggest COD launch of all time, however Warzone 2 is in serious trouble. They completely messed up the game, to the point that so many players were leaving that they have had to reverse how the game fundamentally plays. And next year has no new COD, so its nearly entirely based on how well Warzone does.

I'm feeling like ATVI will miss their 2023 FY projections due to OW2 and Warzone 2 dropping off in popularity.

Or to make to more clear. This was the most stacked ATVI release year of all time: Diablo Immortal, COD MW2, Warzone 2, OW2 and WoW DragonFlight and ATVI is still down YoY.
 
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