Items that jumped out at me from the Activision Blizzard investor call:
“Destiny now has over 20 million registered players, with an average of about 100 hours of game play each”
First, the statement that the average gameplay length from 20 million people is 100 hours is pretty incredible. It would be interesting to see the number of people who didn’t like the game (under 5 hours let’s say) and the number who fiend on it (1000+ hours or so), but either way that 100 hour average is impressive.
Also it caught my eye that they call users ‘registered players’, because that can be dismissed as ‘registered account’ in the F2P world, but you can’t register in Destiny without buying the game, so those ‘registered players’ are in fact paying customers. First FFXIV, and now Destiny, is ‘registered players’ some legal-driven term or what?
On to Blizzard.
“In Q2, the average MAU across Blizzard games was up more than 50% year over year, achieving its highest level ever.”
It’s almost as if allowing people to create free accounts, and allowing the same person to create multiple free accounts on different devices, results in more accounts than ever. Go figure, and a really strong number to LEAD OFF with.
Bet he gets into the real numbers shortly…
“Engagement for Hearthstone, which was already very strong, nearly doubled year over year in terms of active players and time spent.”
Is this a “how many free accounts do you have now?” or an earnings call?
“This year alone, the community has already held more than 1,300 Fireside Gatherings globally.”
Oh. Well ok then. Nothing of real substance was provided about HS, and (I haven’t seen it myself yet) I guess they lump HS with Destiny in the actual numbers again?
The HoTS part had as much depth as the game itself. My guess is every analyst on the call at this point was making a wanking motion and praying for something of substance to be said.
Then D3 was talked about and, because that game is doing well in China, financial numbers were given. Funny how that works.
On to the Q&A.
First question was about Hearthstone revenue. The answer given?
“We saw almost double the amount of active players and times spent year over year, and an increase in more than 50% quarter over quarter. Revenue on the new platforms appear to be incremental to PC.”
So when asked about revenue, the first answer is to talk about free accounts still being played, and then tossing out that maybe, perhaps, it could be possible that mobile is helping revenue along with PC sales. Solid answer Mike, really solid. Quick follow-up question though, how much of a factor is a title barely in the top 20 for revenue in the app store on iPhone (can’t find it on the iPad, fingers got too tired)? Is that a rounding error or a blip? Just wondering…
Skipping down to the HotS question:
“I was hoping you could discuss where you are with the players, and more specifically, the paying players for Heroes of the Storm”
Part of the answer, the rest was wank-motion nothingness:
“I think if you look at other games in the genre, they all had more gradual growth of their player base, so that is what we would expect to see with Heroes of the Storm.”
Translation: HotS numbers are in the toilet, but hopefully they turn around, because hey MOBAs need time to grow? I mean sure, LoL didn’t start with tens of millions, nor did DOTA2, but neither of those games are kiddie-pool shallow, nor did either of those games come with other major product tie-ins or as massive a marketing push as HotS. You weren’t watching LoL or DOTA2 commercials on TV when those games launched, were you now? Did you get a free mount or whatever in WoW when you signed up for LoL/DoTA2? But yea no, HotS is totally going to be saved by its eSport performance. That’s totally going to work out, hopefully as well as it did for Hearthstone last year, right?
New Blizzard just doing its thing yet again, good job all around everyone. Is there another China you could launch D3 in next quarter?
You skipped the part where they said Q2 growth was driven primarily (!) from Hearthstone, and that Hearthstone + D3 + HotS combined constituted the majority of Blizzard’s revenue for the quarter. Since HotS was released in June and is probably not doing well, that means everything was pretty much Hearthstone and D3 (… in China). Hell, we might be able to dig into the financials with what info we have now and tease out more solid guesses as to Hearthstone’s revenue.
Probable spoiler alert: it’s a massive success.
Or perhaps, like the last time we unbundled HS, we’ll find out it’s more of a footnote than a serious contributor to the overall company (though still profitable b.c copy/pasting your old art is good business while it lasts).
I think the big takeaway from this new bundle is D3 in China, and not the top 20ish mobile game that can’t even keep up its own Tavern Brawl release timing and is already repeating content. The fact that D3 money is lining up with the decline in WoW revenue speaks more volume about WoW than anything else, and why during the call both Blizzard and Activision leadership pushed the whole ‘diversify’ angle so hard.
This is completely incorrect. In this report, WoW and consoles are the strong points, and D3 in China fails to compensate for the decline in PC revenue otherwise.
In the investor call that this post is about?
“In the investor call that this post is about?”
Couldn’t honestly follow that, what exactly are you asking?
Honestly, though, if I were you, I think I’d answer the question that involves a gun to your head before resolving this issue; I know how seriously you take internet guns.
Whats kind of funny here is you are trolling, but I was 100% serious in that I couldn’t follow your original post, and now here you are talking about “in this report” on a post about an earnings call and then (I hope) sarcastically saying you don’t follow.
What’s kind of funny here is that you end serious debates by saying “You’re dead”, then accuse other people of trolling.
Anyway, I’m not trolling; it is legitimately not clear what you were asking there. Clear it up, eh?
“and now here you are talking about “in this report” on a post about an earnings call”
This is not correct, I wasn’t responding directly “on a post about an earnings call”, I was responding to a chain of comments in which the Quarterly Report had already been implicitly mentioned: “Hell, we might be able to dig into the financials with what info we have now and tease out more solid guesses as to Hearthstone’s revenue.”
The investor call is full of a lot of BS, like every companies investor call is. At the end of the day, the 6 month preceding profit for Activision went from 500 million dollars in 2014 to 600 million dollars in 2015, which, considering we have both agreed that much of the talent has left the company, is surprisingly good. It’s a bummer to see how much bitterness you have about this company, when you consider the difference in your analytical methods you apply to this company and to CCP.
Digging slightly deeper, we see that 6 month preceding product sales are down 30 million in 2015 compared to 2014, and 6 month preceding ‘other revenue’ is up 290 million. Where other revenue =
1 Subscription, licensing and other revenues represent revenues from World of Warcraft subscriptions, licensing royalties from our products and franchises, value-added services, downloadable content, and other miscellaneous revenues.”
so, compared to 2014, Activision appears to be making an additional ~600 million per year in subscriptions. However, when we look at the WoW sub numbers, it seems possible that much of this apparent increase is merely a temporary effect of the WoD launch. The next quarterly report should be instructive, as the WoD bump appears to be over.
To conclude: Syn, gun to your head? New Blizzard: Better than Old Blizzard, or Best Gaming Company ever?
If you look at “GAAP Net Revenues by Segment/Platform Mix”, then 100m of the revenue increase for the first half of 2015 compared to the first half of 2014 was from WoW, the LoD bump, and 150m of the revenue increase was from consoles, which I believe is all the non-Blizzard part of Activision? Everything else seems relatively constant or down.
This is confirmed by looking at the “ACTIVISION BLIZZARD, INC. AND SUBSIDIARIES
FINANCIAL INFORMATION” chart, where we see that the ‘activision’ segment had increased revenues in that time period, whereas Blizzard decreased revenues in that time period, even with WoW making more revenue. This is probably due to D3 selling less boxes in 2015, as the China release didn’t outweigh the rest of the world no longer buying many boxes of D3. The main bright spot for Blizzard comes from looking at this chart, as we see that it consistently maintains a higher profit margin than Activision. Apparently the side effect of being New Blizzard and selling mass-market crappy online games without paying for decent talent is that moderate income and low costs = good profit margin, leaving it still the most profitable part of Activision Blizzard.
Couldn’t honestly follow that, as I think you are using Activision, Activision-Blizzard, and Blizzard interchangeable, and I honestly don’t want to review the numbers again to line it up. Can you clear that up?
Nope, because you’re dead from the gun to your head.
Otherwise I would, of course. I’m just frightened of zombies.
Wow, you’re really struggling to put a negative spin on the Hearthstone numbers, and sorry but I’m not buying it. If you want to convince me that Hearthstone is not hugely successful you will need to present way better arguments than the piss poor effort you have presented here.
Explain being #17 in the app store for gross revenue as ‘hugely successful’?
Seems highly successful to me. Are you are saying that there are only currently 16 or fewer apps you regard as “Hugely successful”? That’s a pretty tight definition if that’s what you are arguing.
Based on what metric does it seem highly successful to you?
And yes, I’m saying that a mobile game from Blizzard using the Warcraft IP only being the current #17 would not qualify as ‘hugely successful’. Top 5 for a while (month+), top 10 over a long period of time (1yr), maybe top 20 over a very long time if a game isn’t being updated (no ongoing expenses), but barely top 20 for a newish game that is being frequently updated and has TV commercials, b.net, and WoW tie-ins (to name a few) items supporting it? Nope.
So you are imposing a ridiculously high barrier, fair enough. By your metrics there have only been maybe 20 “Hugely successful” apps ever. You heard it here first folks, Syn doesn’t think Tinder is hugely successful.
come on Gman, you’re going overboard on this one. Hearthstone is #13 in the current Games category on the iOS store charts for ‘top grossing’. Tinder is #1 in the lifestyle category there, under ‘top grossing’. Arguing that HS was cheap to make and is outperforming expectations makes sense. Saying that the Warcraft IP tie-in and marketing expenditures only guarantee that people will try the game; but don’t mean that a small game made by a few people needs to make a billion dollars to be any kind of a success, makes sense. Comparing the #13 game to the #1 lifestyle app is going too far. I thought that HS would crack the top ten and stay there; but it didn’t, at least not yet–and that’s fine, I was wrong. But honestly, even if it had, I still wouldn’t call it a huge success, a huge success means it’s a success, then it’s a really big success, then it’s a freakin’ huge success. That should be a high barrier—how high? Let’s put it this way….the barrier should be huge.
Dude, I can hear your hate-boner for Heroes popping from here. Painful.