Activision Blizzard today announced better than expected financial results for the second quarter of 2011. In the quarter, the company delivered record GAAP net revenues of $1.1 billion, as compared with $967 million for the second quarter of 2010. On a non-GAAP basis, the company’s net revenues were $699 million, as compared with $683 million for the second quarter of 2010. For the second quarter, the company delivered record GAAP net revenues from digital channels, representing a 27% increase year over year, and accounting for 37% of the company’s total net revenues. On a non-GAAP basis, record net revenues from digital channels increased 13% year over year, accounting for more than 60% of the quarter’s total net revenues.
Robert Kotick, CEO of Activision Blizzard, stated, “Our better-than-expected second-quarter performance was driven by record digital sales of our online-enabled franchises. For the six month period, net revenues from digital channels grew more than 20%, driving record operating margin and EPS growth of more than 50%. Looking to the balance of the year, while we have numerous releases we believe our audiences will be especially excited by three key properties — Call of Duty: Modern Warfare 3, our new online service Call of Duty Elite and Skylanders Spyro’s Adventure – all of which are shaping up to be incredible.
To date, pre-orders for Modern Warfare 3 have significantly exceeded the pre-orders for Black Ops at this time last year. In addition, we believe that Call of Duty Elite, which was built for Modern Warfare 3 and is expected to launch with the game on November 8, should redefine social connectivity for multiplayer gaming. Additionally, we expect that Skylanders Spyro’s Adventure will change the way we look at toys and video games by bringing the world of toys, video games and the Internet together in an unprecedented way.”
Today, there are more ways than ever for players to access entertainment online and play games which have truly become one of the most compelling forms of entertainment in the world.”
- Call of Duty: Black Ops was the #1 game in the U.S. and Europe for the first half of 2011.
- For the second quarter, Blizzard Entertainment had two top-10 PC titles with World of Warcraft: Cataclysm and StarCraft II: Wings of Liberty.
- To date, Call of Duty: Black Ops players have logged more than 2.2 billion hours of online gameplay.
- Total unique online gamers playing Call of Duty: Black Ops were more than 30% greater than the total unique online gamers who played Call of Duty: Modern Warfare 2 during the first eight months after each game’s release.
During the quarter, Activision expects to release the Call of Duty: Black Ops Resurrection content pack for the Xbox 360 and other systems, as well as X-Men Destiny, Cabela’s Big Game Hunter 2012 and a Kinect-ready title for the Xbox 360, Cabela’s Hunting Party. Additionally, Blizzard Entertainment’s World of Warcraft: Cataclysm was launched in China on July 12, 2011.
Activision Blizzard plans to allocate the majority of its resources and focus toward opportunities which it expects will afford it the greatest competitive advantages and the greatest potential for best-in-class quality, high-margin digital growth, and long-term success. These opportunities include new content for Blizzard Entertainment’s World of Warcraft, StarCraft and Diablo franchises, and Blizzard Entertainment’s next-generation MMO; robust investment in Activision Publishing’s forthcoming Call of Duty titles, including a micro-transaction game for China; the development of a best-in-class digital platform, Call of Duty Elite; a new property from Bungie; and Skylander’s Spyro’s Adventure, an innovative new universe bringing the world of toys, video games and the Internet together in an unprecedented way. These investments should better position Activision Blizzard for long-term growth and enable it to continue expanding its position as the largest digital video-game publisher.
Activision’s financial call to investors is due to start any moment. We’ll listen in and bring you any information of note from the call.