Activision Blizzard announces Q1 FY15 results

Activision Blizzard has announced better-than-expected financial results for the first quarter of 2015.

For the quarter ended March 31, 2015, Activision Blizzard’s net revenues were $703 million, as compared with $772 million for the first quarter of 2014. For the first quarter, net revenues from digital channels were a record $538 million and represented a record 76% of the company’s total revenues.

Hearthstone: Heroes of Warcraft now has more than 50 million registered players and nearly $1 billion in revenues life-to-date.

Activision Publishing had the biggest Q1 online player community in its history, up a double digit percentage year over year. Activision Publishing also had 2 of the top 5 videogame franchises in North America and Europe year-to-date and continues to have 3 of the top 5 next generation games life-to-date – with Call of Duty: Advanced Warfare remaining the No. 1 title, as it has since its launch six months ago.2 Including toys, Skylanders was also the No. 1 console franchise and title globally in Q1, outsold the No. 1 action figure line globally, and was the No. 1 kids console franchise and title globally.

Call of Duty franchise Q1 sales increased by a double-digit percentage year-over-year due to the strong sell-through of Call of Duty: Advanced Warfare and growing online revenues per user across the franchise. There has been early success of the new micro-transaction offerings which have helped drive increased engagement and monetization.

Destiny continues to have strong engagement, with active players playing about 3 hours per day, along with strong digital sales and expansion attach rates.

Blizzard Entertainment had the largest Q1 online player community in its history, up a double digit percentage year over year despite no major launches in the quarter. The company saw a decline in the World of Warcraft subscriber number. Subscribers ended the quarter at 7.1 million. World of Warcraft’s revenue performance at constant FX has been more stable, driven by continued strong uptake on value added services, and price increases in select regions, which partially offset subscriber declines, particularly in the East. World of Warcraft remains the No. 1 subscription-based MMORPG in the world.

Given the weakening of foreign currencies versus the U.S. dollar, the company’s 2015 international revenues and earnings are expected to be translated at lower rates than in 2014. This impacts the company’s 2015 outlook as compared to 2014 actual results given approximately 50% of the company’s revenues, and a higher percentage of profits, are generated outside the U.S.

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