Activision Blizzard Sales Fall as Call of Duty: Vanguard Underperforms

Declining 15 percent amidst a slow year for the gaming industry.

By Jason Schreier, Bloomberg | Updated: 2 August 2022 09:59 IST

Activision Blizzard Sales Fall as Call of Duty: Vanguard Underperforms

Photo Credit: Bloomberg/ Activision

Call of Duty: Modern Warfare II, the next entry in the series, will be released on October 28.

Highlights

Activision will also release Overwatch 2 in early access on October 4
It has sold over 400 million Call of Duty units since 2003
Activision is in the process of being acquired by Microsoft

Activision Blizzard, the biggest US video game publisher, reported revenue that beat analysts' estimates, but adjusted sales declined 15 percent from a year ago due to a soft Call of Duty: Vanguard launch last fall and a slow year for the gaming industry overall. Activision, which is in the process of being acquired by Microsoft, brought in adjusted revenue in the second quarter of $1.64 billion (roughly Rs. 13,000 crore), compared with the average analyst's projection for $1.6 billion (roughly Rs. 12,600 crore). Adjusted revenue excludes deferred sales from online purchases. Adjusted earnings per share were 47 cents (roughly Rs. 0.3), almost 50 percent lower than a year earlier and slightly below analysts' estimates, according to data compiled by Bloomberg.

Last fall's Call of Duty: Vanguard, which Activision said hasn't performed as well as anticipated, has had a ripple effect on the company's fiscal year. The game received negative reviews and faced stiff competition from new entries in the popular Halo and Battlefield series.

During the second quarter, Activision's Blizzard division released Diablo Immortal, a new mobile entry in the action series. Activision's Chinese partner NetEase delayed Diablo Immortal's launch in the world's biggest mobile app market by about a month, saying it needed additional time. It was finally released on July 25. Activision didn't give revenue figures for the new Diablo game on Monday.

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The video game industry has faced a sluggish year as it deals with hardware supply chain issues affecting consoles, inflation and a lack of big hits. Interest in gaming has also cooled off as pandemic stay-at-home orders lifted and people resumed outside interests and activities. Spending in the video game industry is expected to drop 8.7 percent this year, according to a report from the analytics firm NPD Group.

Activision said it expects revenue and earnings per share to “remain lower year-over-year in the second half.” The shares were up less than 1 percent in extended trading at $80.45 (roughly Rs. 6,500).

Call of Duty: Modern Warfare II, a new entry in the series, will be released on October 28. But the series will then skip 2023, Bloomberg has reported. Activision will instead release add-ons for Modern Warfare and other Call of Duty-related content. The next mainline game in the series, from the Treyarch studio, is planned for 2024. Call of Duty is Activision's biggest video game series and the titles regularly top yearly sales charts. They have sold more than 400 million units since the series began in 2003.

Call of Duty: Vanguard Is Offering One Week of Free Multiplayer Access

Activision said it will also release the Blizzard games Overwatch 2 in early access on October 4 and Dragonflight, a new expansion for the online game World of Warcraft, later this year. Diablo IV will be out next year, the company said.

The Santa Monica, California-based publisher increased developer headcount by 25 percent from a year earlier, in part due to acquisitions of the Boston-based game company Proletariat, which will assist on World of Warcraft expansions, and Sweden-based AI company Peltarion. However, it said it “remains cognizant of risks including those related to the labour market and economic conditions.”

Microsoft announced its purchase of Activision in January. The Xbox maker swooped in while Activision's shares had suffered amid an ongoing sexual misconduct scandal last year. Activision's stock has gained about 20 percent since the January announcement, although it is still trading well below the offer price of $95 (roughly Rs. 7,500) a share, suggesting market uncertainty that the deal will go through. Lina Khan, the newly appointed head of the Federal Trade Commission, has indicated that she plans to take a tough stance against technology mergers. Activision has said it expects the transaction to close in Microsoft's fiscal year ending June 2023.

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Call of Duty: Vanguard

REVIEW
KEY SPECS
NEWS

Good
Beautiful cinema
Well-written single-player campaign
Great characters; interesting addition of special abilities
Champion Hill game mode and combat pacing in multiplayer

Bad
Single-player campaign is way too short
Campaign difficulty skewed towards easy
Multiplayer visuals and pace make it more challenging
Zombies mode is not ready yet

Read detailed Activision Call of Duty: Vanguard review

Genre Shooter

Platform PlayStation 4 (PS4), PlayStation 5 (PS5), Xbox One, Xbox Series S/X, PC: Windows

Modes Single-player, Multiplayer

Series Call of Duty

PEGI Rating 18+

More Activision Games

Diablo Immortal

KEY SPECS
NEWS

Genre RPG

Platform Android, iOS, PC: Windows

Modes Multiplayer

Series Diablo

PEGI Rating 18+

More Blizzard Games

Overwatch 2

KEY SPECS
NEWS

Genre Shooter

Platform Nintendo Switch, PlayStation 4 (PS4), PlayStation 5 (PS5), Xbox One, Xbox Series S/X, PC: Windows

Modes Multiplayer

PEGI Rating 12+

More Blizzard Games

Diablo IV

REVIEW
KEY SPECS
NEWS

Good
Looks stunningly gory
Diverse class options
Skills synergise beautifully with builds
Finely-tuned combat
Great voice acting
Rewarding exploration
Satisfying loot system

Bad
Lacklustre story
Tight enemy-scaling
Microtransactions
Mob fights can get monotonous
Side quests feel like checklists

Read detailed Blizzard Diablo IV review

Genre RPG

Platform PlayStation 4 (PS4), PlayStation 5 (PS5), Xbox One, Xbox Series S/X, PC: Windows

Modes Multiplayer

Series Diablo

PEGI Rating 16+

More Blizzard Games

World of Warcraft

KEY SPECS
NEWS

Genre MMO

Platform PC: Windows, PC: macOS

Modes Multiplayer

Series Warcraft

PEGI Rating 18+

More Blizzard Games

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Further reading: Activision Blizzard, Activision Blizzard Q2 2022 revenue, Call of Duty Vanguard, Diablo Immortal, Call of Duty Modern Warfare 2, Call of Duty Modern Warfare II, Overwatch 2, World of Warcraft Dragonflight, Diablo 4, Diablo IV