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Activision Blizzard beats earnings expectations, ‘Call of Duty’ dominates

Activision Blizzard's new 'Call of Duty Warzone' is a free-to-play game that's been downloaded 15 million times in just its first 4 days of availability. (Image: Activision Blizzard)
Activision Blizzard's 'Call of Duty' franchise had a massive year. (Image: Activision Blizzard)

Activision Blizzard (ATVI) capped off a year of monumental growth in the video game industry by beating analysts’ Q4 expectations for revenue, and growing full year revenue by 24% year-over-year.

Here are the most important numbers from the quarter compared with what analysts were expecting, as compiled by Bloomberg.

Revenue: $3.05 billion versus $2.78 billion expected.

Earnings per share: $1.21 versus $1.17 expected.

“We had the best year in our 30-year history,” Activision Blizzard CEO Bobby Kotick told Yahoo Finance.

The video game maker’s stock was trading up 5% after hours on Thursday.

The breadwinner for Activision Blizzard was easily its “Call of Duty” franchise, including “Call of Duty Warzone” and its latest full entry into the series “Call of Duty: Black Ops Cold War.”

In the quarter, the “Call of Duty” franchise saw monthly active users of 128 million, while sustaining more than 100 million monthly active users throughout the year. In-game purchases on both consoles and PCs grew by 40%.

ANKARA, TURKEY - NOVEMBER 26: A man plays Candy Crush Saga game on smartphone in Ankara, Turkey on November 26, 2018.  (Photo by Metin Aktas/Anadolu Agency/Getty Images)
ANKARA, TURKEY - NOVEMBER 26: A man plays Candy Crush Saga game on smartphone in Ankara, Turkey on November 26, 2018. (Photo by Metin Aktas/Anadolu Agency/Getty Images)

Activision Blizzard has north of 300 million users playing across its various franchises each month. That number surpasses the number of subscribers for both Netflix (NFLX) and Disney+ (DIS), which respectively have 200 million and 86.8 million subscribers.

The company also saw a strong shift to digital downloads for “Call of Duty,” which continues to spell bad news for the likes of online retailer GameStop (GME), whose stock recently skyrocketed as part of a squeeze on short sellers before falling back to earth.

“World of Warcraft” also saw big gains in the quarter, with Activision Blizzard reporting the series had 29 million monthly active users. That makes six consecutive quarters of growth for the franchise. For the full year, “World of Warcraft” saw a 40% year-over-year increase in revenue across both its classic and modern versions.

Then there’s Activision Blizzard’s King mobile franchise “Candy Crush.” The mobile game saw double-digit growth year-over-year in the quarter with monthly active users totaling a whopping 240 million players. That growth is all the more impressive since people aren’t traveling as frequently as before the pandemic and might not be on their mobile devices as much.

The gaming industry in general has seen enormous growth throughout 2020 with consumers looking for entertainment outlets while stuck in their homes due to the pandemic. And with a new set of consoles from Microsoft (MSFT) and Sony still in high demand and hard to find, it’s unlikely that the surge in video game spending will slow anytime soon.

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