Call of Duty: WWII and Microtransactions Propel Activision Blizzard to a Record Year

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Activision Blizzard (NASDAQ:ATVI) have posted their earnings for the quarter ending December 31, and, unsurprisingly, the video game publishing giant had a (mostly) happy holiday. Q4 2017 delivered $2.04 billion in revenue for Activision Blizzard, a single-quarter record for them. 2017 as a whole delivered revenue of $7.02 billion, an annual record. Unfortunately, a large $769 million one-time tax charge wiped out the company’s Q4 profits, leading to a $584 million shortfall and a loss per share of $0.77. That said, the publisher's overall financial picture is still very positive.

Traditional Game Sales Are Healthy

The triple-A gaming industry as a whole may be pivoting toward the “games as a service” model, but Activision Blizzard is still doing very well with traditional packaged games. Call of Duty: WWII was the top-grossing console game of the year, and Destiny 2 was the runner up. Meanwhile, Crash Bandicoot N. Sane Trilogy was the best-selling remastered title in PS4 history, which is a crowded field! Overall, traditional packaged product sales brought in a very healthy $737 million in Q4.

Overwatch 2 Team to Look into Guild System and In-Game Tournaments

Digital and In-Game Sales are Where the Big Money Is

Activision Blizzard isn’t quite as tilted towards microtransactions and live services as, say, Electronic Arts, but they are the publisher’s biggest source of revenue. Activision Blizzard’s digital sales were $1.31 billion for Q4 and $4.91 billion for the year. According to Activision Blizzard, most of that money (over $1 billion in Q4 and $4 billion in 2017) came from microtransactions and other in-game purchases. Overall, the publisher boasts 385 million monthly active users across PC, console, and mobile platforms.

Mobile Continues to Pull its Weight

While Activision didn’t provide specific dollar amounts, they revealed their King mobile division (Candy Crush Saga) was the “biggest contributor to our record year of in-game net [sales.]” In 2017 King managed to increase average in-game sales per user by double digits.

This Will Be Another Record-Breaking Year

Looking forward, Activision expects to top themselves again in 2018, with revenue of $7.35 billion and full-year earnings per share of $2.50. Most of this money will be made off good, old dependable Call of Duty and their growing in-game purchase business, but new sources of income will be opening up as well. Overwatch League will be one to watch closely and could start bringing in big money once more sponsors are lined up and Blizzard begins selling new expansion teams. Activision Blizzard also has plans to bring more advertising to games outside the mobile sphere, which is sure to be controversial, but could be a healthy new source of income. Oh, and what about that Call of Duty movie penciled in for 2018? Hmmm!

Clearly, Activision Blizzard is still the envy of the video game industry, and it seems likely they'll continue to be for years to come.