Skip to main content

Activision stumbles offset by booming Blizzard business

Overwatch division's growth leads Activision Blizzard to record year as disappointing Call of Duty: Infinite Warfare prompts return to traditional combat for series; no new Skylanders game in 2017

Activision Blizzard had a record year in 2016, but it wasn't an unqualified success. The company today reported its financial results for the fourth quarter and fiscal year ended December 31, showing the business reaching new heights despite turmoil for some of its traditional heavy hitters.

For the full year, Activision Blizzard posted a company record $6.61 billion in GAAP revenues, up 41% year-over-year. While that's $500 million higher than the publisher's initial guidance at the beginning of the year, much of the year-over-year increase can be attributed to the 2016 addition of King to the company's organizational chart. (The combined entity's 2016 revenues fell slightly short of the components' combined 2015 revenues of $4.66 billion for Activision Blizzard and $1.99 billion for King).

Blizzard was the clear star of the show for 2016, with the segment seeing full-year revenues soar 55% to $2.43 billion, accounting for 39% of Activision Blizzard's entire business. King brought in $1.59 billion in its first year with the company, while Activision Publishing revenues tumbled nearly 18% to $2.22 billion.

Blizzard's performance was driven largely by the launch of Overwatch, which hit a player base of 25 million faster than any game in the label's history and set a new Blizzard record for launch year unit sales, besting 2012's Diablo III debut. At the same time, Hearthstone and World of Warcraft grew monthly active users for the year by 20% and 10%, respectively, thanks to continued support and expansions. It was a banner year for Blizzard, but company executives cautioned that 2017 may not post numbers as strong because of a lighter release schedule.

As for what happened to Activision Publishing's performance, COO Thomas Tippl noted that Call of Duty: Infinite Warfare sales underperformed the publisher's expectations

"It's clear for a portion of our audience, the space setting just didn't resonate," Tippl said.

However, Tippl said that the development team was passionate about it and that the company must support teams pursuing opportunities they're passionate about. At the same time, they try to learn from their mistakes, and he assured investors that this year's Call of Duty title will be taking the series "back to its roots," with "traditional combat" taking center stage.

Tippl also addressed Skylanders: Imaginators, and while he didn't directly comment on its performance, he did say that there would be no new Skylanders console title in 2017. Instead, Activision will launch Imaginators on Switch and support the game with new adventure packs, characters, and other add-ons.

Those issues with Call of Duty and Skylanders didn't prevent Activision Blizzard from making a profit, as the company posted a GAAP earnings per share of $1.28 up from the previous year's $1.19.

For the fourth quarter alone, Activision Blizzard posted GAAP revenues of $2.01 billion, up 48% from 2015's King-less fourth quarter, and well ahead of the $1.86 billion guidance. The company also posted earnings per share of $0.33, up from the comparable period's $0.21 and again, well ahead of the guidance of $0.05.

Looking ahead, Activision Blizzard offered a conservative outlook for 2017, projecting net revenues down 9% to $6 billion, with earnings per share almost halved at $0.72.

Read this next

Brendan Sinclair avatar
Brendan Sinclair: Brendan joined GamesIndustry.biz in 2012. Based in Toronto, Ontario, he was previously senior news editor at GameSpot.
Related topics