Activision Blizzard closes 2012 with record $4.86 billion

Skylanders and Call of Duty lead the publisher forward

Activision Blizzard has announced its financial earnings report for the fourth quarter and full year of 2012, ended on December 31, 2012. For calendar year 2012, the publisher pulled in record revenues of $4.86 billion, up from $4.76 billion in 2011. Digital revenue accounted for 32 percent of the company's revenue, totaling $1.54 billion.

For the fourth quarter, Activision Blizzard delivered a record net revenue of $1.77 billion, up from $1.41 billion in Q4 2011. The recorded revenue was ahead of the publisher's prior estimates of $1.49 billion.

"We are very pleased to report that Activision Blizzard delivered the best performance in its history. With better-than-expected net revenues, record operating margins and record earnings, and over $1.3 billion in operating cash flow, we continue to set the industry success bar. I would like to thank our incredibly talented employees around the world for their passion, drive and creativity, which continues to fuel our success," said Activision Blizzard chief executive officer Bobby Kotick.

Titles in the Call of Duty and Skylanders franchises led the company forward for the full year. Across all platforms in the United States and Europe, Black Ops II, Skylanders Spyro's Adventure, Skylanders Giants, and Modern Warfare 3 were the number one, number four, number five, and number nine titles in dollars, respectively. As of December 31, 2012, the Skylanders franchise has drawn in more than $1 billion in worldwide sales, with more than 100 million figures sold through January 2013.

Blizzard Entertainment also had two top ten PC titles in the US and Europe: Diablo III and World of Warcraft: Mists of Pandaria. Diablo III sold 12 million units through the end of December and was the number one best-selling PC game, while Mists of Pandaria was the number three best-selling PC game.

"As we look to 2013, we will continue to invest in our established franchises, as well as several new properties. We expect these investments to drive our growth over the long term and to enable us to deliver superior returns to our shareholders in the years to come. In the short-term, we expect to continue delivering strong profitability, but below our record setting 2012 performance, due to a challenged global economy, the ongoing console transition and a difficult year-over-year comparison because of Blizzard's record-shattering Diablo III success in 2012," said Kotick.

Heading into the next year, Activision is expanding Call of Duty: Black Ops II with the Revolution downloadable content and Starcraft II with the Heart of the Swarm expansion. First quarter revenue is estimated at $1.16 billion, with calendar year 2013 coming in at $4.09 billion.

Activision shares rose to $12.69 in after hours trading on the earnings news.

[Image via Telegraph]

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Latest comments (13)

Bruce Everiss Marketing Consultant 9 years ago
Mr Kotick is by far the best businessman that the video game industry has ever seen.
Some people don't like that.
But we would all be a lot better off with more like him running the major publishers.

Edited 1 times. Last edit by Bruce Everiss on 11th February 2013 9:10am

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Peter Dwyer Games Designer/Developer 9 years ago

Seriously! If this guy is your hero, then you really need to take a step back or have you conveniently forgotten all the closed studios that ultimately boosted the bottom line for Activision. This is a short term boost as you can never make the same cost saving twice.

So yep the share holders will be pleased and Evil K. can afford yet another house/farrari/yatch but at what ultimate cost to our industry!
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Bruce Everiss Marketing Consultant 9 years ago
Closing under performing studios is good.
If our industry did more of it then we would be a lot more vibrant and healthy.
Kotick is not sentimental. He puts resources where they will do the most good in an entirely pragmatic manner.
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Show all comments (13)
Andrew Animator 9 years ago
Closing under performing studios is good.
I am honestly lost for words.

Edited 1 times. Last edit by Andrew on 8th February 2013 9:37am

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Michal Korec Editor/Analyst 9 years ago
If we have only managers like Bobby Kotick, we end up with 20 repeating foreseeable titles each and every year and variety of console games would die quickly. New IP would grow up once in a few years and need to be premium-priced like Skylanders because Bobby didn't bring anything new to market at all. Compared to EA (which is slumbering through its own muddy waters), not many IPs brought to the market, sorry.

Nevertheless, market wouldn't allow to have more than 2 or 3 managers on-board because they would compete to the bone and nothing will remain.

Honestly, Bobby Kotick became CEO in summer 2008, when Call of Duty was already multi-billion franchise and WoW was going to third published release (Wrath of the Lich King). Exclude Skylander and there is nothing new he brough to the market. There is a clear difference of inventing and leading the venture or maintaining it.

But hey, let's see how he manages WoW slump and transition to the new generation and then we'll discuss his achievements. Or we'll see how he manages to perform in 2015 when WoW gets to 5-6 million customer, CoD would be tired franchise and Destiny will have... well, we don't know its destiny.
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Bruce Everiss Marketing Consultant 9 years ago
@Michael Korec

How does The Blast Furnace fit in with your view?

If all the industry managers were like Kotick then all developers would be happy because they would be working on successful projects that customers wanted.

Kotick became CEO of Activision in February 1991. Fact.
2008 was just the date of the Blizzard merger.
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Max Kaftanati President, Galaxy Gaming9 years ago
Recycled products (and graphics engine) every year. Good thing there is just one Kotick. I remember buying MW3 for PC and never looked at BO2 ever since. Textures looked worse than COD4, maybe 1 good map, $59.99 purchase. No idea why it still gets played according to steam stats. I guess life is good at Activision
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Andreia Quinta Photographer 9 years ago
we would all be a lot better off with more like him running the major publishers.
Kotick is a financial genius and businessman, and while the games industry might have been better off and financially healthier with Koticks, creativity and 'vibrance' - as Bruce put it - would have reached stagnation apart from indie developers since all the major publishers would stick to financially secure IP's to appeal it's shareholders.
Holding creativity in this industry would never be a good idea, but apparently making games isn't meant to be fun anyway, fun being one of the main propellers of creativity and innovation.

I can respect his business drive, but he doesn't care about his consumers, something like this would never be done by someone that does.
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Cameron Lourenco Studying Business Managemant, Conestoga College9 years ago
With more Bobby Koticks you'll get absolutely no risk taking, milking franchises for all they are worth, putting out as many as possible until market saturation with little innovation until everyone gets sick of it and the franchise dies (see - Guitar Hero).

Closing smaller studios which may not have made as big a profit is what Kotick does. Those studios may have been creating something ingenious that may not have sold like Call of Duty, but if you're not a homogenized game that appeals to the mass market, you have no place at Activision. This is a business strategy that does nothing for the industry in terms of moving forward creatively and expanding what is possible. This is what David Cage was talking about - an industry that can't move anywhere because its stuck marketing to teenagers, and people with teenage mentalities, where the vast majority of what is sold is just another version of you getting to stab and/or shoot things. If you're a shareholder, on the other hand, it's great, and that's who Bobby Kotick is running Activision for - the shareholders. He doesn't give two pisses if you think the games his company puts out are derivative and don't push the industry forward. That's what smaller companies are for who aren't looking to maximize profits as their first and only goal.
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Randy Marr Customer Service Representative, Blizzard Entertainment9 years ago
Financially, you're apparently not wrong, and the dollar signs prove that. Creatively, you couldn't be further from the truth. People like him, who have gone on record saying that he wishes to take the fun out of video game making, are going to be what wreck this industry and turn it into a worst-than-Hollywood slog-fest.
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Paul Gheran Scrum Master 9 years ago
But work isn't supposed to be fun, or we wouldn't have invented another word to describe how it feels. Fun is for hobbyists, which we are not supposed to be.

Call me Bobby. Lets do lunch.
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Paul Jace Merchandiser 9 years ago
Activision shares rose to $12.69 in after hours trading on the earnings news
For a company as successful as Activision Blizzard and one that has been as successful as long as they have I've always wondered why their share price seems so low. I don't expect them to pull in Apple numbers but I can't remember the last time they have had a negative year or even quarter and their major franchises continue to break records year after year. Shouldn't their stock price be somewhere between $25-$55 a share?
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Gareth Eckley Commercial Analyst 9 years ago
@Bruce's remark

Do you honestly think that people who work in the industry STOP working in it when a studio closes?

No, the ones who've spent the longest in the industry are pretty much guaranteed new jobs, regardless of talent. So pretty much the only people who get screwed are new talent at the bottom end, who don't have any say in the overall production of the game anyway.

But don't let reality get in the way of things.

Edited 1 times. Last edit by Gareth Eckley on 24th March 2013 10:50am

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