Activision Blizzard's bottom line is heading in the right direction, even if some of the company's other numbers wouldn't quite suggest it.
Activision Blizzard today reported earnings for its fiscal third quarter (three months ended September 30), showing net income up 38% to $260 million, even as its revenue and engagement numbers receded. Total revenues were down almost 7% to $1.51 billion, while bookings were off nearly 13% year-over-year to $1.66 billion.
One culprit for the drop was a tough comparison from the previous year's third quarter, which featured the launch of Destiny 2. While the company didn't specify that as a factor in its results, it could be seen clearly in the company's console revenues, which had dropped 34% year-over-year to $347 million. Mobile and ancillary revenues were also down 11% to $523 million, partly offset by a 21% growth in PC revenues to $482 million.
During the company's investor call, COO Coddy Johnson acknowledge that Destiny 2 was underperforming. "We have not yet seen the full core reengage in Destiny, which has led to the underperformance against our expectations to-date," he said. "Some players are still in a wait-and-see mode. When you're in, you're deeply engaged, but if you're not, we're working to bring players back in."
The jump in PC revenues is at least partly attributable to the August launch of World of Warcraft: Battle for Azeroth. The latest expansion to Blizzard's flagship MMO sold through 3.4 million copies on launch day, a record for the franchise.
Activision Blizzard's engagement numbers were also down, slipping from 352 million to 345 million monthly active users (MAUs) quarter-over-quarter. King's MAUs dropped from 270 million to 262 million, while Blizzard's held steady at 37 million. Activision's MAUs actually notched up from 45 million to 46 million, and the company said that last month's launch of Call of Duty: Black Ops 4 significantly boosted MAUs, which would be reflected in the company's fourth quarter results.
"Activision Blizzard's results for Q3 exceeded our prior outlook as we continue to entertain large audiences, drive deep engagement, and attract significant audience investment across our franchises," Activision Blizzard CEO Bobby Kotick said. "Our unique advantage continues to be our ability to create the most compelling interactive and spectator entertainment based on our own franchises, combined with our direct digital connection to hundreds of millions of customers, in over 190 countries. With these competitive advantages we continue to connect and engage the world through epic entertainment."