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Earnings Report: Hell on the Rise, Azeroth in Decline

| 3 Aug 2012 02:15

"Only" bringing in a billion dollars is a good problem to have.

Activision Blizzard has published its Q2 2012 earnings report, and the numbers aren't half bad. The company earned $1.08 billion in revenue: more than the $950 million prediction made in May, but not quite on par with last year's Q2 earnings of $1.15 billion. That's a lot of money by anyone's standards, and Activision knows exactly where it's coming from.

"Our performance was driven by strong audience demand for our great games," stated Activision Blizzard CEO Bobby Kotick. "For the first six months, we had the top three best-selling games in North America and Europe with Activision Publishing's Skylanders Spyro's Adventures and Call of Duty: Modern Warfare 3, and Blizzard Entertainment's record setting Diablo III."

Blizzard doesn't have quite as many horses in the race as Activision Publishing does, but it's certainly not falling behind in revenue. World of Warcraft subscriptions, alongside Call of Duty DLC, were responsible for $343 million this quarter, making up nearly a third of Activision Blizzard's total earnings. Blizzard was particularly proud of Diablo III's success, reporting that as of July, "more than 10 million players have entered the world of Sanctuary." About 1.2 million of those players grabbed their copy of the game for free via the WoW Annual Pass, which included a copy of Diablo III when players subscribed for 12 months of World of Warcraft playing time.

The biggest slip-up in the company's finances comes from a notable decline in World of Warcraft subscribers. After being dethroned by League of Legends last year, the MMO currently has only 9.1 million subscribing players - down from 10.2 million at Blizzard's last count (which itself was a 1.8 million decrease from last year). This marks the first time since 2008 that the game has had less than 10 million active players. The report still names it "the #1 subscription-based MMORPG," but with most of its competitors switching to free-to-play models, Blizzard may need to start considering other options.

Overall, the company seems to have high hopes for the rest of 2012. Blizzard plans to release its fourth World of Warcraft expansion Mists of Pandaria on September 25, which may bring a resurgence of WoW subscriptions. Meanwhile, Activision is making an effort to bring the Call of Duty franchise to Chinese markets with an upcoming free-to-play title. As for how successful these plans will be, only time will tell.

Source: Activision

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