The new way to get Blizzard news? Financial and Business sites!

[Strangewayes]

A bright spot for Activision going forward is its success in selling games and game add-ons over the Internet, now a huge profit driver for game companies that can sell a new title for $60 and continue to sell software packages for as much as $30 well after release. In the holiday quarter, Activision said sales delivered over the Internet rose 94 percent from the same time a year ago, to $685 million or almost a third of total sales. For the full year, Activision's online revenue represented almost a half of all total sales.

This shift follows an industry trend with other large game makers, like Electronic Arts and Take-Two Interactive, which have both seen consistent boosts to sales over the Internet in its latest quarter. These companies are beginning to see success in the games industry as less a matter of selling the most units and more a question of how to get gamers to play a single game for longer -- and spending real money in the virtual worlds as well.

http://www.cnet.com/au/news/activisi...rnings-report/

In its fiscal first-quarter earnings report Wednesday, the company behind popular military shooter franchise Call of Duty and the fantasy game World of Warcraft said that, despite drops in both sales and profits, it's following a plan to shift sales to the Internet, which now account for a record $3 out every $4 the company rings up.

Activision also said two of its newest games -- the space-age shooting game Destiny, and the digital card game Hearthstone: Heroes of Warcraft -- have accumulated more than 50 million registered users and are now responsible for more than $1 billion sales. Hearthstone, for tablets and smartphones, is offered for free to download, and makes its money by charging for upgrades and additional items over time. Destiny is also designed to get players spending money over the next ten years of its development by offering additional storylines and other items. Activision says Destiny's player base clocks around 3 hours of playtime a day.

http://www.cnet.com/au/news/activisi...2015-earnings/

Blizzard's revenue stream highly depends on World of Warcraft's continued success, even with 2015 forecast to be the first year where World of Warcraft will not make up the majority of Blizzard revenue (partially due to expected declines I will outline). With the series firmly entrenched on a two year release cycle, a money injection via an expansion pack costs in addition to normal recurring monthly revenue is most likely at least eighteen months away. With the Starcraft II expansion having no set launch date, the series will have to rely on Hearthstone and the Heroes of the Storm to carry the weight of what is assuredly going to be a downward trend in the user base, with subscribers down to 7.1M already early in 2015.

As we travel our way down the income statement to operating income, we see (in my opinion) some more trouble. Activision Blizzard has appeared to switch strategies in regards to how they approach game development and promoting these games to the general public. Sales and marketing expenses have ballooned from 2011 to 2014. Yet overall product development costs have been on a steep downtrend, even as overall product launches and franchises have doubled according to management (from 5 to 10). How can this be possible?

I believe this apparent lack of quality stems directly from Activision Blizzard's cuts to its Product Development budget. Instead, the company is filling the void with mass marketing through its Marketing budget in order to juice anticipation for games. In the long run, what will make or break the company is quality games, not a billion dollar marketing budget.

http://seekingalpha.com/article/3186...p-for-a-tumble

[yetgdhfgh]

Shareholders get the news first

I do believe thats the law to stop insider trading but iam not 100 percent on that

[Garlorik]

As we travel our way down the income statement to operating income, we see (in my opinion) some more trouble. Activision Blizzard has appeared to switch strategies in regards to how they approach game development and promoting these games to the general public. Sales and marketing expenses have ballooned from 2011 to 2014. Yet overall product development costs have been on a steep downtrend, even as overall product launches and franchises have doubled according to management (from 5 to 10). How can this be possible?

I believe this apparent lack of quality stems directly from Activision Blizzard's cuts to its Product Development budget. Instead, the company is filling the void with mass marketing through its Marketing budget in order to juice anticipation for games. In the long run, what will make or break the company is quality games, not a billion dollar marketing budget.

This sounds pretty accurate

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Shareholders get the news first

I do believe thats the law to stop insider trading but iam not 100 percent on that

Everyone gets the news at the same time, even share holders can commit insider trading (by buying more shares or selling their current shares)

[Flaks]

I really wanna see if that last thing is accurate. Sounds completely like an opinion piece to me no matter how believable it is considering the current quality of blizzard games.

[shoc]

I really wanna see if that last thing is accurate. Sounds completely like an opinion piece to me no matter how believable it is considering the current quality of blizzard games.

Yeah, its an 'I believe' piece. The cutting product development budget seems unsubstantiated but its pretty clear that WoD pushed more marketing than WoW has ever seen.

[Hey There Guys its Metro]

Thanks for the insider's tip.
Can't wait to see what hilarious conclusions come from these "business sites."

[Zabatakis]

I really wanna see if that last thing is accurate. Sounds completely like an opinion piece to me no matter how believable it is considering the current quality of blizzard games.

It really feels like that, but yeah I too would like to see some proof. Gonna read the source and see.

[Flaks]

Yeah, its an 'I believe' piece. The cutting product development budget seems unsubstantiated but its pretty clear that WoD pushed more marketing than WoW has ever seen.

Theyre claiming the numbers are pulled from the q1 quarterly report which would lend some credence to it.

Honestly considering how we were supposed to see the effects of the doubled team this expansion, I would donut that the entirety of the new blood that was added was in advertising,

[Strangewayes]

This sounds pretty accurate

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Everyone gets the news at the same time, even share holders can commit insider trading (by buying more shares or selling their current shares)

I wonder if Finance people pay more for leaks or not? For example January:

Activision Blizzard’s next Hearthstone expansion is slated for April and the game has passed the 75 million players milestone, according to an employee of the video-game publisher. Overwatch’s business model is still in flux and the next Starcraft 2 game is already done and ready to go; the release date is still not settled but likely to come in the second quarter, the source tells Yahoo Finance.
The Activision Blizzard insider, who could not be named due to the company’s policy on talking to the press, revealed significant details about the company’s current game pipeline.

The insider says Hearthstone numbers “are off the charts.” The next expansion is due to come out soon and will be more PvE focused. The team is also experimenting with a 2 vs. 2 version. Stunningly Hearthstone has more than tripled the last publicly released players number of more than 20 million.
Regarding Overwatch, the insider says the business model is still in flux. They are trying to decide between a free-to-play or expansion type focused model. No matter what, you will initially be able to play the game for free, but how you pay for heroes is still to be decided. The development team is pushing to launch the game this year, but senior executives are skeptical it can be done by then according to the source. There is a tiny chance for a December release, but it’s more likely to come out in early 2016 at this stage.
Hearthstone’s success is beyond even the most optimistic expectations and should be a buffer against the continued year-over-year secular decline of the Call of Duty and Skylanders franchises.

Other key details from the insider:

Executives have “low expectations” for Heroes of the Storm. The insider thinks many of the senior staff on the Heroes of the Storm team will be laid off.
The next Starcraft 2 game is already done and ready to go. The release date is still not settled. The current time window ranges from April to June.
The World of Warcraft team has “quadrupled” its art outsourcing, which has been a bottleneck in the past. The next expansion is almost “feature complete.”

The insider says the members of the Diablo III team have been moved to a new project set in the Starcraft universe. The game will be similar to Warframe and contain gameplay aspects from Left4Dead, DayZ, Smite, and other MOBAs. It is in early pre-production, which means late 2016 or later.
When asked for comment Activision Blizzard said the focus right now of the Diablo III team “is on continuing to support the game with patch content. We generally don’t comment on rumors or speculation, but I do want to make sure it’s clear that they’re not working on a secret project in the StarCraft universe.”

http://firstadopter.tumblr.com/post/...d-insider-says

[Hitei]

Yeah, its an 'I believe' piece. The cutting product development budget seems unsubstantiated but its pretty clear that WoD pushed more marketing than WoW has ever seen.

I guess you weren't around for the celebrity commercials and mohawk grenades?

[MoanaLisa]

I really wanna see if that last thing is accurate. Sounds completely like an opinion piece to me no matter how believable it is considering the current quality of blizzard games.

Keep in mind that this is for all of Activision. It's not just Blizzard but development costs for everything with an Activision nameplate on it.

[shoc]

Theyre claiming the numbers are pulled from the q1 quarterly report which would lend some credence to it.

Honestly considering how we were supposed to see the effects of the doubled team this expansion, I would donut that the entirety of the new blood that was added was in advertising,

We weren't supposed to see the effects of the doubled WoW team this expansion. All the hiring went on during MoP/WoD Development, which is why WoD got delayed for 6 months because so many artists and developers had to get pulled off development to train the new hires. By then we already had playable content in WoD, 6.2 would have been the absolute earliest that any of the new blood would have started contributing to any projects, but if their intentions were to pump out annual expansions then it's pretty likely that they went straight into the creation of the next expansion after WoD.

I don't think it needs to be said that Warlords of Draenor was supposed to be a lot bigger while it was being planned out compared to what we ended off at. It's obvious that Warlords was cut short because Blizzard realized that Annual expansions were now in the realm of possibilities, and if they are capable of it, then why wouldn't they? A $50 expansion a year + $180 in subscription is $230 per subscriber per year. As opposed to $205 per subscriber per year with an expansion every 2 years. That's a 13% increase in profits, and no company in the world would turn down that much increased revenue, especially when it translates to more net content for us (though we pay 13% more to play WoW in the long run).

That went off the rails pretty quickly, back on topic, I think the marketing is just going to get bigger considering how much of a success WoD's marketing was. Getting 3 million players back is no small feat. If Blizzard can pull that off every year, it would be the equivalent of them selling a 'Top 20 Selling PC Game of All Time' list every year for as long as they can keep WoW's money boner standing.

[eem5]

Keep in mind that this is for all of Activision. It's not just Blizzard but development costs for everything with an Activision nameplate on it.

Yep, much of this applies to Destiny.

[shoc]

I guess you weren't around for the celebrity commercials and mohawk grenades?

I still have old alts who still have the mohawk buff and I refuse to log onto them for too long because I don't want it to wear off. But Warlords marketing was a lot bigger IMO than celebrity endorsement commercials.

[Fugazi]

Getting 3 million players back is no small feat. If Blizzard can pull that off every year, it would be the equivalent of them selling a 'Top 20 Selling PC Game of All Time' list every year for as long as they can keep WoW's money boner standing.

I do not think people would be fooled again, not so many of them at least. WoD stunt costed them a lot of reputation and if they continue like that... well not good for future.

[huth]

Keep in mind that this is for all of Activision. It's not just Blizzard but development costs for everything with an Activision nameplate on it.

WoW dev costs probably went up significantly, what with the massive increase to the team size. People generally expect to get paid for work.

[Strangewayes]

I wonder if this thread is relevant now.