While Diablo Immortal slightly boosted player engagement, it wasn’t enough to help Activision Blizzard meet its Q2 2022 revenue targets.
Activision Blizzard has seen its fair share of controversy and scandal, including its recent buyout by Microsoft. While the release of Diablo Immortal in June led to a slight increase in monthly player engagement, Activision Blizzard’s finances were down 28% year-over-year relative to revenue.
Blizzard itself has struggled to recover the quarterly growth of the past two years, when its player base was just 22 million monthly active users. In contrast, they reported 35 million in 2018 and 32 million in 2019, according to their year-end reports. Diablo Immortal managed to recently increase its player base from 22 million to 27 million for the quarter that ended in early July.
Here are the numbers from Activision Blizzard’s Q2 numbers as reported by gamesindustry.biz:
Revenue: $1.64 billion (down 28% YoY) Bookings: $1.64 billion (down 15%) Net Revenue: $280 million (down 68%) Monthly Active Users: 361 million (down 12% YoY) annual basis and 3% quarter over quarter)
Specifically from the Activision camp, they showed a 38% year-over-year revenue decline and a 6% quarter-on-quarter decline. The launch of Call of Duty Mobile in 2019 wasn’t enough to improve the numbers. However, Call of Duty: Vanguard and Call of Duty: Warzone performed better in Q2.
On Blizzard’s side, Diablo Immortal and Hearthstone saw revenue decline by 7% year over year. The best results from the launch of Diablo Immortal were the fact that the company saw its first increase in eight quarters, up 4% year-on-year and 23% quarter-on-quarter.
Help also came from announcements of upcoming projects to be released, such as Overwatch 2, the next Call of Duty games, and the new versions of World of Warcraft: Wrath of the Lich King Classic and World of Warcraft: Dragonflight. Diablo IV was also slated for release sometime in 2023.
Activision Blizzard will have to arrange the Chinese release of Diablo Immortal for the next quarter, as the company was unable to do so before. It failed to launch earlier due to an incident of offending the Chinese government over a social media post mentioning Winnie the Pooh, a character banned in China.
Activision Blizzard’s infamous CEO, Bobby Kotick, said the company has seen a 25% increase in the number of developers year over year. He noted:
“Our acquisitions last quarter of Proletariat and Peltarion further increase our development resources, including our AI and machine learning capabilities. Even in a challenging economic environment, with so many companies announcing hiring freezes and layoffs, our development headcount grew 25% year over year at the end of the second quarter. Our talented teams plan to release exciting new content for Call of Duty, World of Warcraft and Overwatch later this year. We certainly look forward to completing our upcoming $95 per share all-cash transaction with Microsoft as soon as possible.”
Activision Blizzard CEO Bobby Kotick
Various Twitter users voiced their opinions on how Activision Blizzard could fix its new titles. Jason Schreier tweeted: “For 2023, I’d expect new paid (‘premium’) content for Modern Warfare 2, not a brand new Call of Duty. Treyarch is leading the next major game, which was pushed back to 2024, as Bloomberg reported earlier this year.”
For 2023, I’d expect new paid (“premium”) content for Modern Warfare 2, not a brand new Call of Duty. Treyarch is leading the next major game, which has been pushed back to 2024, as Bloomberg reported earlier this year. https://t.co/iLQEgbSt5w
— Jason Schreier (@jasonschreier) August 2, 2022
Blizzard got roasted by the internet this past weekend when it sent out a poll asking how much Overwatch 2 players would pay for Mythic skins. After Diablo Immortal was demonized for its gacha monetization strategies, it seemed like Blizzard was trying to fix its problems with users. Based on immediate feedback, this was not the way to go.
With Microsoft’s acquisition of Activision Blizzard and controversy, it seems difficult for the company to see growth again. While Diablo Immortal’s numbers looked strong, it didn’t look like another promising year for publishers. As a result of the current acquisition, Activision Blizzard did not hold its typical presentation and call with investors as is customary during acquisitions.
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