Activision Blizzard Made More Money From Microtransactions Than Game Sales In 2017
Activision has just announced their financial results for Q4 2017 and for the entire year. Investors will be pleased that the company has brought in record amounts of revenues last year. In fact, total net revenues were $7.02 billion using GAAP numbers.
However, the company made over $4 billion from microtransactions last year which is more than half of total revenues in 2017. Put simply, Activision Blizzard made more money from selling loot crates and other types of microtransactions than they did by actually selling video games. “Activision Blizzard delivered a fourth-quarter record of over $1 billion of in-game net bookings, and an annual record of over $4 billion of in-game net bookings,” the company noted in their financial report.
To be fair, about $2 billion of the revenue from microtransactions came from King, maker of popular games on Facebook and mobile devices such as Candy Crush Saga and Shuffle Cats. King was acquired by Activision Blizzard in 2016.
The company boasts over 385 million Monthly Active Users across all platforms.
It just goes to show that despite the backlash faced by rival Electronic Arts over loot boxes in Star Wars Battlefront II, microtransactions are incredibly lucrative for video game publishers.
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Activision Blizzard 4th Quarter and 2017 Financial Results
http://investor.activision.com/releasedetail.cfm?ReleaseID=1056935
(The whole thing is far to large to Cut and Paste here, so I am just grabbing some random bullet points)
Selected Business Highlights:
Activision Blizzard's success in 2017 shows the enduring nature of our franchises, and that our communities value innovation and new experiences from our inspired teams.
Audience Reach
Activision Blizzard had 385 million Monthly Active Users (MAUs)C in the quarter, up from 384 million last quarter.
King had 290 million MAUsC, down 1% quarter-over-quarter, while time spent per player reached a record of 37 minutes per day. MAUsC for the Candy CrushTM franchise grew slightly quarter-over-quarter while also driving increased time spent per player.
Activision had 55 million MAUsC for the quarter, up 12% quarter-over-quarter and matching its prior quarterly record, driven by the successful launches of Call of Duty®: WWII and Destiny 2. For the year, Activision had the top two-grossing console game releases in North America and two of the top-five grossing console game releases worldwide.1
Activision's Call of Duty: WWII was the top-grossing console game of the year globally1, with the franchise's biggest launch quarter sell-through on current-generation consoles. The game set a Sony PlayStation milestone as the biggest day 1 digital release ever.2 Call of Duty has been the number one franchise globally for 8 of the last 9 years.1
Activision and Bungie's Destiny 2 was the second-highest-grossing console game in North America for the year1, had the largest PC launch in Activision history based on units, and had a higher attach rate on its first expansion than Destiny 1.
Activision's Crash BandicootTM N. Sane Trilogy was the number one-selling remastered collection in PS4 history.1
Blizzard had 40 million MAUsC for the quarter. While down sequentially, this is the 6th quarter in a row with 40 million or more MAUsC, primarily driven by Overwatch® and Hearthstone®.
Deep Engagement
For the second quarter in a row, players spent over 50 minutes per day in Activision, Blizzard, and King games, in line with some of the most engaging online connected platforms in the world.
The inaugural season of the Overwatch League started on January 10 with 12 world-class team owners from across the globe, multiple league and team-level sponsors, a premium viewing experience and a robust distribution strategy. In its first week, the Overwatch League reached more than 10 million unique viewers across the world with an average audience of more than 280,000 on a per minute basis.
The Call of Duty World League, which kicked off in December, has sold out each of its World League Global Open events. The launch event in Dallashad more than double the viewership hours of last year's launch event.
Player Investment
Activision Blizzard delivered a fourth-quarter record of over $1 billion of in-game net bookingsB, and an annual record of over $4 billion of in-game net bookingsB.
King grew segment revenues and operating income year-over-year, delivered record mobile net bookingsB in 2017, and increased its average net bookingsB per paying user by a double-digit percentage year-over-year. This quarter, King had two of the top-10 highest-grossing titles in the U.S.mobile app stores for the seventeenth quarter in a row, with Candy Crush Saga™ and Candy Crush Soda SagaTM at #1 and #2, respectively.3 The Candy Crush franchise grew consumer spend sequentially for the fourth quarter in a row.
Activision delivered record segment operating income of over $1 billion with record operating margin of 38%. Activision offered compelling downloadable content offerings, including Zombies Chronicles for Call of Duty: Black Ops III, Destiny 2's expansion pass, Call of Duty: WWII's season pass, and additional live features, services and content.
Blizzard delivered record segment revenues and operating income for a year with no major game release, as they continued to deliver continuous content across franchises including Overwatch, Hearthstone, and World of Warcraft®.
