By Chris Katje
One of the biggest storylines for the video game sector continues to be the pending acquisition of Activision Blizzard (NASDAQ: ATVI) by Microsoft Corp (NASDAQ: MSFT), which was announced in January 2022.
Zenger News talked with Activision Blizzard CFO Armin Zerza to get an update on the merger and to hear more about the recent second-quarter financial results from the video game company.
In the second quarter, Activision Blizzard reported net bookings growth of 50% year-over-year. The company saw strength across its key business lines of Activision, Blizzard and King with record bookings and operating income for its Blizzard segment.
“It’s all about focus and execution,” Zerza told Zenger News when asked about the growth in the second quarter.
While other video game companies have reported lackluster growth, Activision Blizzard has shown several quarters of strong bookings growth.
“We have been focused on delivering on great content and rich entertainment experiences to the passionate communities around our biggest franchises such as Call of Duty, Candy Crush, Warcraft, Diablo and Overwatch.”
Zerza said the company has been investing in delivering more compelling content and more frequent content which could “meet our players wherever they want to play.”
“Whether that’s on PC and console, or on the go on mobile. When we execute all of that well and consistently, our players respond positively to the content we’re shipping allowing us to deliver strong financial performance.”
In the second quarter, the King segment saw revenue up 9% year-over-year, setting a new quarterly record. The quarter was led by the Candy Crush franchise with items like user acquisition and live operations helping with growth.
“I think it’s hard to forget about Candy Crush, it was the top-grossing game franchise in the U.S. app stores for the 24th quarter in a row. The team has done a masterful job in making Candy Crush an even more compelling player experience over time — they’re delivering new or optimized seasonal content, features, and events that deeply engage existing players, and are bringing new and lapsed players into the franchise.”
Zerza highlighted the latest version of the Candy Crush All-Star tournament and an integration of Barbie into the popular mobile game as ways the franchise can expand its user base.
The Blizzard segment saw revenue up 160% year-over-year and operating income up more than triple year-over-year, with both metrics setting quarterly records.
The launch of Diablo IV, which has sold more than 10 million copies and broken company records at this stage of release, helped power the quarter.
“Diablo IV’s launch drove Blizzard’s best quarter on record, leading to over $1B in net bookings and operating income growing over 300% year-over-year,” Zerza said.
Zerza credited the Blizzard team that worked “really hard to revitalize” the Diablo franchise.
“They also did a great job in building awareness for the game — getting in front of consumers has never been more difficult and we need to continually think outside the box for how to break through.”
Zerza credited the marketing team of Blizzard and a music video with Halsey and Suga as an example of marketing efforts to reach video gamers on a global scale.
A judge recently rejected a challenge by the Federal Trade Commission to block the Activision Blizzard acquisition by Microsoft. The news was one of the latest that could put the deal closer to being official and saw the Nasdaq remove Activision Blizzard shares from a key index, potentially hinting at the likelihood of the deal.
“We are excited about this merger with Microsoft. It’s a great deal that makes a lot of sense for both sides,” Zerza said. “It will help us compete in an increasingly uncertain environment by giving us faster access to specialized talent in areas like artificial intelligence and machine learning.”
While the acquisition continues in the background, Zerza said the Activision Blizzard team is focused on the video game company.
“We have been focused on delivering great content for our players.”
Produced in association with Benzinga