Today, Activision Blizzard announced its latest quarterly results, for the three month period ended September 30, 2014. Revenues were higher than forecasted and up a great deal year over year. Its non-GAAP net revenues were $1.17 billion for the quarter; its forecast was $975 million, and last year, during the same period, the company did $657 million in revenue.
On average, Yahoo Finance's aggregation of analysts expected the company to slide in at $1.01 billion for the quarter. The highest estimate was $1.11 billion, which the company handily beat.
Destiny and Hearthstone lead the packDestiny
launched during the quarter, which was a big contributor, said CEO Bobby Kotick in a statement. The game has over 9.5 million registered users, Activision said. Meanwhile, Blizzard's Hearthstone
and its 20 million registered users contributed to bottom lines.
In the investor call following the announcement, COO Thomas Tippl said that Destiny
are both "far exceeding expectations" for the company so far.
However, Activision Publishing CEO Eric Hirshberg was cagey about how many copies the game has sold. Regarding the "9.5 million registered users" number, Hirshberg said, "There's a relationship to sell through, but it's not exact as some people have more than one profile," Eurogamer reports
. He declined
to provide sell-through numbers when asked.
Hirshberg also said that the next "full" Destiny
game is in development
alongside expansion packs for the original release.
In the statement, Kotick also noted that Blizzard's Diablo III: Reaper of Souls
, which launched for consoles during the period and became the number four console title in that period. and subscriptions for World of Warcraft
increased in advance of its next expansion pack. Subscriptions for the 10-year-old MMO rose to 7.4 million during the quarter.
What drives digital success?
For the quarter, digital channels represented 43 percent of Activision Blizzard's revenue. During the call, CFO Dennis Durkin broke down the company's digital business, which he said said was up 25 percent, year-on-year, for the first nine months of 2014. Moreover, he said that it represented nearly 60 percent of the company's business so far this year.
The biggest digital segment for Activision is additional content purchased on a per-transaction basis, including such things as Call of Duty
DLC, added services for World of Warcraft
(purchased separately from subscription fees), and Hearthstone
These are "very high margin and very good drivers of engagement inside our very, very large communities," Durkin said. He noted that WoW
subscription revenue was "flat to slightly down over the last year" yet digital revenues still grew.
He also noted that full game downloads are a rapidly growing part of the digital portfolio; the uptake on next-gen consoles is much higher than prior-gen. Hirshberg said that "we expect [Call of Duty: Advanced Warfare
] will be the most digitally purchased game in console history," by a "wide" margin.
Bobby Kotick was quick to call out his high expectations for two free-to-play games in 2015: Blizzard: Heroes of the Storm
, the company's upcoming MOBA, and Call of Duty Online
, which is being developed
for the Chinese market in partnership with Tencent.
"We're at the beginning of a new era for Activision Blizzard," Kotick said.