Activision Blizzard, Inc Earnings Report - WoW's Predictions

[Big Thanks]

I feel it's explained fairly well in that link you included, but without going to the numberific details, the simple answer is; by being more effective.

Automation, synergies between functions and systems. Less spending on things that don't produce revenue or generate cost. By lowering you run-time costs (building leases, data center leases, broadband, telephony costs). By making good licensing and publishing deals where you reap the rewards and others do the work (lowering the cost of sales).

It's a lot of things, but basically lowering your cost of operations.
What Blizzard has done specifically, we don't know. That's not part of their public reporting. We see the resulting numbers, but they don't have to report the actions taken to get there.

So - only Blizzard knows.

There is some information on the expenses and costs 2017 compared to 2018
But i have an IQ of 0,5 so i cant read everything into it
Note that this is for Activision-Blizzard and not only for Blizzard....sadly
I think they never went in detail for Blizzard-only-

[Ophenia]

Well, from what I have picked up - CoD and Immortal is the only thing they are going to release in 2019.

Classic and WC3 are not for 2019 ? (genuine question, I didn't follow the schedules at all)

[Gaidax]

Classic and WC3 are not for 2019 ? (genuine question, I didn't follow the schedules at all)

These are small fry projects that won't have any major impact like releasing actual new game.

[zebreck]

None of this is terribly surprising. Fortnite is eating everybody's lunch right now, not to mention the general macro instability and relatively blank release schedule leading to decreased profit guidance. They were going to have to lay some people off, no other way to appease the shareholders. But they're replacing them with actual, real developers, at least some of whom are going to WoW. This is cause for celebration for the faction that thinks WoW sucks now because it's a development ghost town and/or they need 'new blood' on the team. No luck for the faction that wants Ian's or Brack's skull for their sippy cup though. It may also signal their first concrete move to actualize the 'multiple' part of the 'multiple diablo related projects' they've been talking up for a year. HoTS is probably dead though, but that's not overly surprising considering i'm apparently their only viewer. So yeah, sky not falling, most of the Blizzard properties are doing about as well as you'd expect in this climate. Market appears to have already priced in their likely profit slide next year.

[Big Thanks]

You generally don't do that because Blizzard is not a separately traded entity. There's no "Blizzard Stock" to buy. Only ATVI.

From the image i posted:

in 2018 compared to 2017 Acti-Blizzard

Spent MORE money on:
-Software royalties, amortization, and
intellectual property licenses (product Sales): More 71M
-Game operations and distribution costs : More 44M
-Product development: More 32M
-General and administrative: More 72M

Total Additional costs: 219

Spent LESS money on:
-Product Costs: less 14M
-Software royalties, amortization, and
intellectual property licenses (subscription, licensing, and other): Less 85M
-Sales and marketing: Less 316M

Total money saved: 415

------

Conclusion in 2018: Acti-Blizzard spent less 196M (they said "fuck it" to sales and marketing)

(why did i do this?)

[Puupi]

From the image i posted:

in 2018 compared to 2017 Acti-Blizzard

Spent MORE money on:
-Software royalties, amortization, and
intellectual property licenses: More 71M
-Game operations and distribution costs : More 44M
-Product development: More 32M
-General and administrative: More 72M

Total Additional costs: 219

Spent LESS money on:
-Product Costs: less 14M
-Software royalties, amortization, and
intellectual property licenses: Less 85M
-Sales and marketing: Less 316M

Total money saved: 415

------

Conclusion in 2018: Acti-Blizzard spent less 196M (they said "fuck it" to sales and marketing)

(why did i do this?)

Didn't you just previously say they did some impressive gymnastics?

[RyudoTFO]

sometimes leadership needs to change . its actually pretty common practive in a lot of corporation that "reward" for finishing very imortant projects is not promotion only being let go because some people burn out completly during "process" and after that only thing they think about is relaxing and enjoying the fruits of success instead having "hunger" for more.

Thank you, I understand how companies work, I'm actually employed by one, project managers change all the time and most time not for the better.
I'm more worried about the "...us to achieve the many opportunities our industry affords us..." part. Because 5 years ago the gaming industry though e-sports and MOBA is the new thing, so they threw all available resources there (a.k.a. Overwatch, HotS) and now they obviously think that mobile games and Battle Royale is the hot stuff, so we end up with Diablo Immortal and probably some Battle Royale mode for Overwatch in the next few years, while other games like WoW will be fed only 3th-4th grade content.

[Big Thanks]

Didn't you just previously say they did some impressive gymnastics?

But this are the Activision-Blizzard numbers....not Blizzard-only

They are not as impressive as Blizzard "operating income" increase of 51%.

Acti-Blizzard as a whole only saw more operating income because the revenue was higher. Higher revenue made the operating income higher in the end.

While Blizzard revenue only grew 15%
BUT
The operating income grew 51%

Blizzard was REALLLLLLLY sneaky this year. THey cutted incredible costs......SOMEWHERE we dont know.
Sales and Marketing were probably one...but they did something else for sure. Something incredible we dont know about is making me mad

[Gaidax]

Well if Blizzard is not making new games it does not really need to market much.

[unbound]

Blizzard was REALLLLLLLY sneaky this quarter. THey cutted incredible costs......SOMEWHERE we dont know.

{Looks at BfA slow raid development, overall glut of content, mostly artistic overlays to Legion; minimal changes to class mechanics; new "races" that are nothing more than reskins}

Hmmm...I wonder where costs got cut...

[Vorkreist]

"World of Warcraft saw expected declines post the expansion release "

How to try and sugar coat a massive failure. OMEGALUL. Thats what expansion releases are there for, to expect declines from them. Thank you Actilizzard for the comedy.
I wish theres one out of that 8% fired who was in charge of looking at sub numbers and they leak those grand 500k active subs left.

[Big Thanks]

{Looks at BfA slow raid development, overall glut of content, mostly artistic overlays to Legion; minimal changes to class mechanics; new "races" that are nothing more than reskins}

Hmmm...I wonder where costs got cut...

Im not going to try and guess...i have no idea.

But one thing is for certain
Blizzard cutted incredible costs and expenses this year!

Because "operating income" is the revenue LESS costs and expenses.

Blizzard saw an increase in revenue by 15% but saw an increase in "operating income" by a whooping 51%!

Meaning Blizzard went full RAMBO on costs and expenses. Where? we dont know.

[Teri]

Meaning Blizzard went full RAMBO on costs and expenses. Where? we dont know.

Blizzard already cut Staff in Europe earlier in 2018. (Customer Service, Cork, Ireland)

Only actively developing 1 "new" game for PC as far as we know (Diablo 4).

And Diablo Immortal is pretty much outsourced to NetEase.

Classic and Reforged don't need the same amounts of marketing or full-size dev teams either.

Diablo 4 isn't coming in 2019.

[Nyel]

Oh wow, WoW is bleeding a lot of subs due to the awful expansion BfA is... who would have known.

At the same time back during Legion WoW was thriving because... Legion was great (at least until 7.2/7.3). BfA has never been good since... devs had the idea to make an expansion so boring and dull.

[kamuimac]

Oh wow, WoW is bleeding a lot of subs due to the awful expansion BfA is... who would have known.

At the same time back during Legion WoW was thriving because... Legion was great (at least until 7.2/7.3). BfA has never been good since... devs had the idea to make an expansion so boring and dull.

and yet blizzard is making more $$$$$ then every - quarter after quarter

in this expansion that according to forums is failure

whiners gonna whine - carawan moves on

[Nyel]

and yet blizzard is making more $$$$$ then every - quarter after quarter

in this expansion that according to forums is failure

whiners gonna whine - carawan moves on

That's not due to WoW. To believe WoW at the moment is raking in a ton of money for them is quite delusional. Hearthstone and Overwatch save Blizzard at this point.

[babyback]

That's not due to WoW. To believe WoW at the moment is raking in a ton of money for them is quite delusional. Hearthstone and Overwatch save Blizzard at this point.

Exactly. One of the biggest cash cows for Activision-Blizzard is King. All of the Candy Crush games are bringing in so much money.

[lordzed83]

I'm assuming you don't have a job and have never worked in a company that is part of western market economy.
If do you indeed have a job, I'm assuming your company makes no profit. And everyone works there because it's their calling.

C'mon now.
We can discuss the tenants of socialism and I'm with you (to a certain limits), but that's not how global economy works right now. And watching angry youtubers spreading the message of hate and misery won't change it.

I work at University 11 years now. And mstt of us here Do like workign with Students even tho Pay is not great and we could move to more profitable employment.

I'm just waiting for news like
Ex Acti blizz employee brings hes favourite semi auto to work and goes postal in HR and upper floor department.

Would put smile on my face.

[korijenkins]

Not really a copout. Lots of companies are now to the point to admitting that Fortnite robbed them of a lot of players. ActBlizz is not the only company negatively impacted by the success of Fortnite.

A free to play game with no free story, one PvP game mode, and flooded with microtransactions devastated company after company.

Hilarious.

Out of curiosity, do they have to be honest in these reports? I know they do their best to spin everything positively, but is there actually any threat of repercussions if they just make up numbers?

[Projectmars]

A free to play game with no free story, one PvP game mode, and flooded with microtransactions devastated company after company.

Hilarious.

Out of curiosity, do they have to be honest in these reports? I know they do their best to spin everything positively, but is there actually any threat of repercussions if they just make up numbers?

Considering it's been top of Twitch streams for most of it's lifespan, has incredible media buzz, and an unreal user base... I believe it. … I still don't get the appeal of BR games. The entire genre seems painfully shallow and dull.

And I'm pretty sure if they were to just make up numbers they would be in trouble with several governmental agencies that have a 3 letter acronym name.