For the third fiscal quarter ending 12/31/22, Activision Blizzard (NASDAQ: ATVI) saw bookings soar to $3.56 billion, up 45% from the previous year’s quarter. Net revenue was $2.3 billion with $1.2 billion in deferred revenue. Call of Duty: Modern Warfare II saw the highest opening quarter sell-through in franchise history. Blizzard reported its highest quarterly net bookings.
Analysis
The results for Activision Blizzard were quite strong. Call of Duty: Modern Warfare II was previously expected to be the best-selling title for the year, but the bigger surprise was the results for the Blizzard segment.
Blizzard franchises Warcraft, Overwatch, and Diablo each generated over $100 million in bookings as Blizzard revenue was up 90% year-to-year in the fourth quarter. Overwatch 2, which launched in October, was a question mark but it looks to have brought the franchise back in a major way. Overall monthly active users for Blizzard increased 88% from 24 million at the end of 2021 to 45 million at the end 2022.
Of course, the big issue with Activision is will the merger with Microsoft be approved. DFC Intelligence continues to be optimistic but the stock price is clearly driven by the latest merger news. However, strong growth for Blizzard products could be an area of concern. Regulators seem to be focused primarily on the Call of Duty franchise and the current arguments against the merger are weak.
It is also worth noting that last month Activision Blizzard’s partnership with China operator NetEase ended. Until a new China partner is found Blizzard products will not be distributed in China.
