Shares of Activision Blizzard Inc. (NASDAQ: ATVI) have gained over 37% prior to now 12 months and 5% because the starting of this yr. Activision was one of many corporations that benefited from the sturdy development witnessed by the online game sector throughout the COVID-19 pandemic.
This momentum continued by the primary quarter of 2021 with the corporate delivering sturdy outcomes for the interval. Despite the fact that there are issues that the momentum in video video games is more likely to taper off as soon as issues return to regular, Activision seems well-positioned to drive development going ahead. Right here’s why:
Activision Blizzard’s development is supported by its sturdy set of franchises that assist in driving income and bookings. Titles resembling Name of Responsibility: Black Ops Chilly Struggle, Name of Responsibility Cell and Warzone helped drive a 72% development in income throughout the Activision phase throughout the first quarter in comparison with the identical interval a yr in the past. Name of Responsibility in-game internet bookings on console and PC grew over 60% YoY.
Warcraft and Hearthstone helped drive a 7% YoY development in income throughout the Blizzard phase. The growth of World of Warcraft’s Shadowlands and Cast within the Barrens helped increase internet bookings development throughout the quarter.
Inside the King phase, the Sweet Crush and Farm Heroes franchises drove income development of twenty-two% together with in-game internet bookings development within the high-teens share on a year-over-year foundation throughout the first quarter. The expansion in in-game internet bookings has remained sturdy going into the second quarter.
The sturdy performances of the Name of Responsibility, Warcraft and Sweet Crush franchises helped drive a 27% development in complete income and 36% development in internet bookings throughout the first quarter. The corporate expects internet bookings of $1.85 billion for the second quarter and $8.60 billion for the total yr of 2021.
Consumer development and engagement
The investments made by the corporate in bettering its franchises have helped drive development in customers and engagement. The addition of free-to-play and cell experiences to Name of Responsibility greater than tripled the month-to-month lively customers within the franchise over the past two years and helped the Activision phase attain 150 million customers throughout the first quarter. The corporate is trying to apply this technique to its different manufacturers because it goals to succeed in 1 billion customers.
The Blizzard and King segments had 27 million and 258 million customers, respectively, in Q1. Inside King, the corporate has been engaged on including new options to Sweet Crush and delivering extra seasonal occasions to drive engagement. Crash Bandicoot: On The Run!, which was launched in March, has seen 30 million downloads to-date.
Activision Blizzard continues to take a position considerably in content material growth and as a part of these efforts, it plans to rent greater than 2,000 builders in addition to triple the dimensions of a few of its franchise groups in comparison with 2019.
Activision Blizzard has an thrilling pipeline that’s anticipated to drive development within the coming years. Trying into 2022 and past, the corporate is engaged on its pipeline which incorporates Diablo IV, Overwatch 2, and a number of Warcraft cell titles and these are anticipated to drive vital development.
Inside Blizzard, the corporate is planning to roll out Diablo II: Resurrected later this yr. It additionally plans to launch Diablo Immortal on cell. Diablo Immortal is anticipated to assist increase Diablo’s attain earlier than the launch of Diablo IV on PC and cell. The corporate can even launch WoW: Burning Campaign Basic within the coming months. Activision Blizzard expects to generate revenues of $2.13 billion in Q2 2021 and $8.37 billion for full-year 2021.
The inventory has a Sturdy Purchase score and a mean value goal of $117.13, which represents a 19% upside from the present stage.
Click on right here to learn the total transcript of Activision’s Q1 2021 earnings convention name