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2015/11/03 16:20:27
Subject: Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
Following its $5.9 billion acquisition of Candy Crush creator, King, Activision Blizzard has lifted the lid on its latest quarterly results for the three month period ended September 30, and things at the company are going better than the company expected.
GAAP revenues exceeded expectations, rising from $753 million to $990 million. Non-GAAP revenues are down year-over-year, dropping from $1.17 billion to $1.04 billion--a smaller drop than forecasted, as Activision expected non-GAAP revenues to fall to $930 million.
The company also delivered record quarterly digital revenues, with digital sales generating $687 million in non-GAAP revenue, a year-over-year increase of 38 percent.
Strong software performance
Those digital sales were bolstered by the release of The Taken King, which broke PlayStation records with its day-one download rate and helped attract the highest number of active players in Destiny's history. Since the release of The Taken King, Destiny's community has grown to over 25 million registered players.
According to Activision, daily player engagement in Destiny is also now "well above" three hours per day, and has become the most watched console game on Twitch.
On the mobile front, the release of Hearthstone's second expansion, The Grand Tournament, saw play-time engagement grow by 77 percent year-over-year and helped the card-battler set a new quarterly revenue record.
The continued success of Call of Duty and World of Warcraft also remains a key factor in the company's success, with both of those franchises leading the pack on their respective platforms.
Assuming Call of Duty: Black Ops III and World of Warcaft expansion, Legion, meet their targets, and supporting acts such as Guitar Hero, Skylanders, StarCraft II, and Diablo III continue to perform, Activision expects to end the year with GAAP revenues of $4.53 billion and non-GAAP revenues of $4.65 billion.
Until Monday's $6 billion purchase of Candy Crush creator King, Activision Blizzard had taken a cautious wait-and-see approach when it came to heavy external investments into mobile games.
But when it saw the success of Blizzard’s mobile-based card game Hearthstone: Heroes of Warcraft, the company thought harder about making that big move.
Asked in an earnings call if the success of Hearthstone had an influence on how Activision viewed the mobile opportunity, Activision Blizzard CEO Bobby Kotick replied, "Certainly, Hearthstone’s success, which has been extraordinary, was a catalyst for us to think about [mobile] opportunities differently.
"And when you look at 196 countries being served by King’s footprint and a network of over 400 million players, and our intellectual property that goes back to 1980, we thought there was a great opportunity."
Kotick said mobile games are a $36 billion market that’s growing fast.
In May this year, Blizzard said Hearthstone had 30 million players.
But one of the biggest questions is whether or not King can expand its already-massive network through the creation of new games and franchises. Currently, King is heavily reliant on the success of the Candy Crush franchise, and concerns consistently emerge about the diversification of King’s portfolio.
Riccardo Zacconi, who will remain CEO of King after the Activision acquisition is complete, assured analysts and shareholders that more games are in the pipeline.
"We are working on all the key franchises we have, with sequels and sister titles, and by the end of 2016, there will be at least three new titles coming out," he said in the earnings call. "Of course at the same time, our people are working on new things. So the target over time is to [create] new franchises."
King is getting into the resource management genre, and planning to release a “mid-core” game to target new audiences.
Kotick stressed, "The most important thing we see [in the acquisition], creatively, are sustained franchises that will have perpetual value, and we’ll continuously put our best creative foot forward."
In a massive acquisition, Activision Blizzard has bought Candy Crush creator King for $6 billion, Activision announced Monday night.
The purchase puts one of the most successful mobile game makers under the same umbrella as billions-dollar Activision Blizzard franchises Call of Duty and World of Warcraft.
The company’s King purchase instantly makes Activision Blizzard a top contender in the lucrative mobile game market.
Until now, Activision Blizzard has been taking a measured approach to entering the mobile game business, mainly investing internally, namely with Blizzard’s popular Hearthstone: Heroes of Warcraft digital card game. King says its network has 330 million unique users.
Activision Blizzard will acquire all of King’s shares at $18 a piece for the total of $5.9 billion. The price per share is a 27 percent premium over King’s average share price over the last three months.
The combination creates an even more substantial game industry powerhouse. Activision Blizzard says it had GAAP revenues of $4.9 billion for the 12 months ended September 30 this year; King had revenues of $2.1 billion for the same period. As for profits during that period, Activision made $1.1 billion, while King made $600 million.
The companies hinted that mobile business models and practices will be applied to various franchises across Activision Blizzard and King's combined portfolio, "from micro-transactions, game analytics and mobile marketing to increase digital revenues."
King's executive management will remain intact under "long-term" employment contracts. Activision said King and its 1600 employees and 12 studios will operate independently from the rest of Activision Blizzard.
The deal, slated to finalize in spring 2016, is subject to approval by King shareholders, Irish High Court, antitrust authorities and other customary closing conditions.
In a prepared statement, Activision Blizzard CEO Bobby Kotick said:
"The combined revenues and profits solidify our position as the largest, most profitable standalone company in interactive entertainment. With a combined global network of more than half a billion monthly active users, our potential to reach audiences around the world on the device of their choosing enables us to deliver great games to even bigger audiences than ever before."
King CEO Riccardo Zacconi added:
"We believe that the Acquisition will position us very well for the next phase of our company's evolution and will bring clear benefits to our players and employees. We will combine our expertise in mobile and free-to-play with Activision Blizzard's world-class brands and proven track record of building and sustaining the most successful franchises, to bring the best games in the world to millions of players worldwide. We are very much looking forward to working with Activision Blizzard. We have two teams that, together, will have an amazing footprint, innovative technology, and leadership across platforms, and unique, established IPs to delight one of the largest networks of players in the world."
Well Blizzard Activision just became the biggest giants in the games industry. Owning two of the most played FREE TO PLAY games on the market (Hearthstone and Candy Crush), and also owning the IP for Call of Duty, World of Warcraft, Starcraft 2, Diablo 3 and many other games.
This means they are probably going to see their sales and profit basically double. Meaning that this duo company owns 60% of the video games industry. (if my numbers are right)
But yeah pretty insane.
Sorry for the long read, but there was alot going on yesterday, thought I would share with the denizens of dakka dakka
This message was edited 1 time. Last update was at 2015/11/03 16:31:09
From whom are unforgiven we bring the mercy of war.
2015/11/03 16:38:58
Subject: Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
It's a shame Nintendo cocked up their foray into mobile gaming recently. with some half baked mii related release instead of 'Mario Mobile'.
Acti-Blizzard can still cock thing sup for themselves - they have had to uncouple from Vivendi after their mega merger a few years ago. and this statement.....
"The companies hinted that mobile business models and practices will be applied to various franchises across Activision Blizzard and King's combined portfolio, "from micro-transactions, game analytics and mobile marketing to increase digital revenues." .....
Makes uncomfortable reading.
However Mobile is the way forwards for getting cash in the bank so i'll have to wait and see how my shares do over the mid term.
I had the same question about Candy Crush. I thought that went the way of Farmville. Although, to be fair, if it isn't related to Clash of Clans I am not paying attention.
Mr. Burning wrote: Acti-Blizzard can still cock thing sup for themselves - they have had to uncouple from Vivendi after their mega merger a few years ago. and this statement..... "The companies hinted that mobile business models and practices will be applied to various franchises across Activision Blizzard and King's combined portfolio, "from micro-transactions, game analytics and mobile marketing to increase digital revenues." ..... Makes uncomfortable reading.
Could a Free to Play format work with console gaming? Seems like it could with things like the Xbox and PS marketplaces, but I wonder how the gaming community would respond to such a development.
*Fixed wonky quotes
This message was edited 1 time. Last update was at 2015/11/03 16:58:26
2015/11/03 17:07:11
Subject: Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
I'm not sure that this makes all that much financial sense, candy crush is quite old now and there is nothing innovative or unusual about it (although the same could be said for the rest of Actiblizzards catalog admittedly). How do they expect to make their money back?
Mr. Burning wrote: It's a shame Nintendo cocked up their foray into mobile gaming recently. with some half baked mii related release instead of 'Mario Mobile'.
Acti-Blizzard can still cock thing sup for themselves - they have had to uncouple from Vivendi after their mega merger a few years ago. and this statement.....
"The companies hinted that mobile business models and practices will be applied to various franchises across Activision Blizzard and King's combined portfolio, "from micro-transactions, game analytics and mobile marketing to increase digital revenues." .....
Makes uncomfortable reading.
However Mobile is the way forwards for getting cash in the bank so i'll have to wait and see how my shares do over the mid term.
They would have had StarWars in their portfolio, having previously published lucas arts product, but EA have that now.
Nintendo has long fallen from grace and has become the New EA, they are bogging down their customers and treating them like crap. Nintendo has lost alot of crediblity and their stocks have been constantly falling
Nintendo Co., Ltd
TYO: 7974 - Nov 2 3:00 PM GMT+9
19,415.00Price decrease65.00 (0.33%)
They have made alot of stupid mistakes in the past couple of years. The WII U was a complete and utter failure. Nintendo might as well not compete with other consoles. Unless their secret project becomes a success.
From whom are unforgiven we bring the mercy of war.
2015/11/03 18:14:50
Subject: Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
So the leaders of bliz are doing an ego buy to pad their paychecks then. After all, no synergy us being created here, but now the books look like they have more profit and sales so they look better to shareholders.
This message was edited 1 time. Last update was at 2015/11/03 19:59:53
The people in the past who convinced themselves to do unspeakable things were no less human than you or I. They made their decisions; the only thing that prevents history from repeating itself is making different ones.
-- Adam Serwer
My blog
2015/11/03 20:26:19
Subject: Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
It's a long-term plan. That's my guess. I don't have much insight into that specific sector and its numbers, but if I had to make an educated guess, Act/Bliz is looking into a long-term plan, i.e. grabbing more F2P customers in. Mobile games are a great way to do so and grabbing the Candy Crush crowd is a smart move given that it's mostly compromised of young adults who started out as children consumers a few years ago. Those customers are well-familiar with the F2P concept and were invested in it, so getting those people to hop on nearby trains is a good move. Act/Blizz is the strongest power on the market by a huge shot as Activision provides an easy-to-please crowd and Blizzard comes with a hugely positive reputation and the most oustanding track record there has ever been on the games market. No other publisher managed to release such perfect games at such an unbelievable quality level.
Blizzard has not launched a single unsuccessful game yet and all games of theirs are top-notch quality-wise. They operate at the high end of price (Starcraft II being 3 parts at full price, HotS prices high in general) but also match their quality to their pricing standards. For what it's worth, they opened MMORPG to the core market.
Melissia wrote: So the leaders of bliz are doing an ego buy to pad their paychecks then. After all, no synergy us being created here, but now the books look like they have more profit and sales so they look better to shareholders.
Its rhetorical, I'm industry. the reason why they are doing it is because they are trying to improve their profit margins. Currently activision blizzard wants to become the center of gaming. In terms they are becoming the Disney of Video Games. For a while now they have been acquiring smaller companies.
Blizzard Activision you may hate them but they know how to make games for large groups of people. They really know how to build games. And also sell to people. They aren't doing it just for shareholders, but for their future, and to basically control the games industry.
Automatically Appended Next Post:
Sigvatr wrote: Blizzard has not launched a single unsuccessful game yet and all games of theirs are top-notch quality-wise. They operate at the high end of price (Starcraft II being 3 parts at full price, HotS prices high in general) but also match their quality to their pricing standards. For what it's worth, they opened MMORPG to the core market.
Basically,
Activision same deal. Whenever a call of duty game is released it is going to make money.
Plus everyone is forgetting Activision in the equation I feel like.
They make just as much as blizzard does, and make more because of their highly popular games they make.
This message was edited 1 time. Last update was at 2015/11/03 21:52:35
From whom are unforgiven we bring the mercy of war.
2015/11/03 22:55:38
Subject: Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
Sigvatr wrote: and all games of theirs are top-notch quality-wise.
?!?
Blizzard used to make top quality games, about 10 years ago.
Blizzard sells on what they've always sold on: Reliable formulas executed with good production values and accessibility. What exactly to you feel has changed about the products in the last 10 years to be so drastically different? I can see poo-pooing them if you've never enjoyed the likes of Starcraft or Diablo but they are what they've always been, save the interface modernization. Even the newer stuff they've put out in Heroes of the Storm and Hearthstone are simply accessible, polished versions of well-established formulas. Overwatch is likely to be the same, take the team shooter as pioneered by TF2 and the like slap on some high production values and lower the entry barriers.
This is what Blizzard has always done. At least after releasing the original Starcraft anyway
This message was edited 5 times. Last update was at 2015/11/03 23:55:55
2015/11/03 23:52:54
Subject: Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
Sigvatr wrote: and all games of theirs are top-notch quality-wise.
?!?
Blizzard used to make top quality games, about 10 years ago.
Blizzard sells on what they've always sold on: Reliable formulas executed with good production values and accessibility. What exactly to you feel has changed about the products in the last 10 years to be so drastically different? I can see poo-pooing them if you've never enjoyed the likes of Starcraft or Diablo but they are what they've always been, save the interface modernization. Even the newer stuff they've put out in Heroes of the Storm and Hearthstone are simply accessible, polished versions of well-established formulas. Overwatch is likely to be the same take the team shooter as pioneered by TF2 and the like, slap on some high production values and lower the entry barriers.
This is what Blizzard has always done. At least after releasing the original Starcraft anyway
Not to mention Overwatch is probably not only going to dominate FPS team shooters, but doing it better, and making it more accessible.
Interestingly overwatch is a highly wanted by the female demographic according to alot of people in the gaming press. It strikes a certain chord that appeals to ALOT of people.
From whom are unforgiven we bring the mercy of war.
2015/11/04 01:10:25
Subject: Re:Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
The current discussion regarding Blizzard aside, it's nice to see that Activision is making a killing from all the compliant consumerism-slaves who buy into their terrible, anti-consumer practices. Along with EA.
I guess the market truly has spoken.
This message was edited 1 time. Last update was at 2015/11/04 01:11:00
2015/11/04 01:24:43
Subject: Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
Blizzard generally puts out stable games that are slight variations of previous games, which makes their series roughly equivalent to cash cows such as the various sports series, albeit not quite as frequent. Thus I can see why they're called one of the most successful game companies from a stockholder perspective (and all the blind, short-term viewpoint that stockholders pretty much invariably have). That said, I wouldn't call them the best game company from a gaming perspective, any more than I would say that about EA Sports.
The people in the past who convinced themselves to do unspeakable things were no less human than you or I. They made their decisions; the only thing that prevents history from repeating itself is making different ones.
-- Adam Serwer
My blog
2015/11/04 01:56:42
Subject: Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
DarkTraveler777 wrote: Could a Free to Play format work with console gaming? Seems like it could with things like the Xbox and PS marketplaces, but I wonder how the gaming community would respond to such a development.
Of course it will. The gaming community at large is still stupid enough to pre-order Ubisoft games (or any game from a Japanese developer that isn't Nintendo), so really they'll pay for anything.
Chongara wrote: I can see poo-pooing them if you've never enjoyed the likes of ... Diablo ... what they've always been...
Diablo III is only like Diablo II if you take a trip through bizzaro world first.
Blizzard North gave us the great Diablo games. Diablo III is... who the hell knows.
This message was edited 2 times. Last update was at 2015/11/04 02:00:25
BlaxicanX wrote: The current discussion regarding Blizzard aside, it's nice to see that Activision is making a killing from all the compliant consumerism-slaves who buy into their terrible, anti-consumer practices. Along with EA.
I guess the market truly has spoken.
Anti-consumer? Talk to nintendo if you wanna complain about that. At least activision blizzard listens to criticism of their games and does something the public wants.
Automatically Appended Next Post:
Melissia wrote: Blizzard generally puts out stable games that are slight variations of previous games, which makes their series roughly equivalent to cash cows such as the various sports series, albeit not quite as frequent. Thus I can see why they're called one of the most successful game companies from a stockholder perspective (and all the blind, short-term viewpoint that stockholders pretty much invariably have). That said, I wouldn't call them the best game company from a gaming perspective, any more than I would say that about EA Sports.
For a job they are the best place to go. Best game company? (Which I nowhere claim) definitely not.
This message was edited 1 time. Last update was at 2015/11/04 03:27:31
From whom are unforgiven we bring the mercy of war.
2015/11/04 07:10:53
Subject: Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
Not to mention Overwatch is probably not only going to dominate FPS team shooters, but doing it better, and making it more accessible.
That is debatable. It will be popular certainly, Blizzard games always are, but doing it better than other FPS games and being more accessible than for example TF2? Nah.....
Chongara wrote: What exactly to you feel has changed about the products in the last 10 years to be so drastically different?
Diablo 3 is largely similar to Diablo 2 yet still manages to be markedly inferior. Starcraft 2 falls into the same camp.
Blizzard have always been good at polishing and repackaging existing ideas; they just aren't as good at it as they used to be and/or the ideas that they borrow have already been well executed elsewhere.
The last Blizzard game that I really enjoyed was Diablo 2 and while I was genuinely excited (in a remarkably childlike way) when I first started playing SC2 my excitement didn't last long.
Diablo 3 is largely similar to Diablo 2 yet still manages to be markedly inferior. Starcraft 2 falls into the same camp.
Perceptions vary. I found Diablo 3 to be a lot less monotonous than Diablo 2. My playthroughs of the latter invariably died at some point during Act 3 (if not sooner) due to a feeling of sheer repetitive tedium. For whatever reason, doing a full play-through of Diablo 3 isn't as mind-numbingly dull.
2015/11/04 08:07:22
Subject: Re:Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
BlaxicanX wrote: The current discussion regarding Blizzard aside, it's nice to see that Activision is making a killing from all the compliant consumerism-slaves who buy into their terrible, anti-consumer practices. Along with EA.
I guess the market truly has spoken.
Activision like those gamer drones, Kirby's wet dream!
Not to mention Overwatch is probably not only going to dominate FPS team shooters, but doing it better, and making it more accessible.
That is debatable. It will be popular certainly, Blizzard games always are, but doing it better than other FPS games and being more accessible than for example TF2? Nah.....
Chongara wrote: What exactly to you feel has changed about the products in the last 10 years to be so drastically different?
Diablo 3 is largely similar to Diablo 2 yet still manages to be markedly inferior. Starcraft 2 falls into the same camp.
Blizzard have always been good at polishing and repackaging existing ideas; they just aren't as good at it as they used to be and/or the ideas that they borrow have already been well executed elsewhere.
The last Blizzard game that I really enjoyed was Diablo 2 and while I was genuinely excited (in a remarkably childlike way) when I first started playing SC2 my excitement didn't last long.
None of these are specific addressable criticisms, and it doesn't even fit your timeline. Diablo 2 was 15, nearly 16 years ago. I've played a lot of SC1 and a fair amount of SC2. SC2 only fails in comparison with regards to high-level competitive/e-sports play and in no small part due to the rise of the MOBA. From a usability and play dynamics standpoint the average user, SC2 is probably the better game.
Have you considered it's not blizzard that's changed, but you? Assuming you were roughly 12-15 playing these games the first time around, you're approaching or in your 30s now. You're a different person than you were then, you're an old man now (or at rather what your younger self would have called an old man). Have you considered that your capacity for enjoying click-click-click-click fests with relatively little depth has simply gone down, when not fueled by nostalgia?
This message was edited 1 time. Last update was at 2015/11/04 12:23:51
2015/11/04 14:07:48
Subject: Blizzard Activision Success in the Games Industry and Acquiring Candy Crush Creator Company
Blizzard makes stable, similar games and Overwatch is a welcome addition to their game repertoire. Diablo III was very positivel received by a lot of gamers, the biggest criticism came from long-term veterans who didn't like it becoming "more casual". Hey, I was in that camp until we gave it a try and the console version actually is better than the PC one. To us.
Blizzard simply reacts to what the market wants. Today's market wants games that are easil accessible, fun and can be played for a short time. Fast, enjoyable action. Diablo 2 was a great game for its time, but it wouldn't hold up well today, or, rather, not as well as Diablo 3 did. The market changes and it moved away from its former customers towards another audience. I, for one, like it. I don't have much time anymore. Job, family etc. I maybe have about 1 or 1,5 hours per day, at max, to spend on video games and I would much rather play 2 or 3 HotS matches than engaging into a very complex and deep game.
Blizzard still makes the best games on the market, by a huge margin. They react well to their audience and know exactly how to cater to their target market.
This message was edited 1 time. Last update was at 2015/11/04 14:08:24
Blizzard still makes the best games on the market, by a huge margin.
!?!
Would you mind turning down your hyperbole generator, it appears to be stuck on 11. Blizzard make competent, if bland, games which are financially successful but they are a long, long way from the 'best games on the market'.
None of these are specific addressable criticisms, and it doesn't even fit your timeline.
The time line was never specific in the first place and its hard to attach specific terms to 'quality'. I do know that I only played through D3 once though (compared to the dozens of times I 'completed' D2) and that I still prefer D2 over D3 as I played them both at around the same time as a comparison. I found the first few levels of D3 to be ok but as the game wore on it became increasingly samey in ways that D2 didn't (aside from Act 3 at least), I can't even remember what class I was. Going by various threads on gaming forums (fora?) I don't appear to be alone in my view either. The horrible, and completely artificial, car crash that was D3's launch certainly didn't help matters. Path of Exile is a better successor to D2 than D3 is..
SC2 is SC1 with larger control groups and better graphics, frankly I expected so much more; especially from the much hyped campaigns.
As I said competent but bland.
This message was edited 1 time. Last update was at 2015/11/04 18:22:44
