Activision Blizzard, Inc Earnings Report - WoW's Predictions

[burzian]

"Your example of Blizzard doing layoffs after a very successful year is a fair point, but how does that and them continuing to do the same thing mean that they were always fine laying off people after successful time periods!?"

I don't know, billy. Basic logic? Maybe because Blizzard remained largely autonomous until ATVI bought vivendi out? Maybe that 6 of the 11 members of the board of directors for Activision Blizzard were directors appointed by Vivideni, not activision?

If a kid who is the child of a single dad commits arson, and then the dad gets remarried and the kid commits arson, and then dad dies and the kid commits arson. I think it's pretty fucking obvious the kid is fine with committing arson and it has fuck all to do with the step-mom really liking fire.

Hahaha, you sound completely unhinged. Great metaphor! Thanks for the quick brush-up on "basic logic" and the insider info on Activision-Blizzard's corporate governance.

[Big Thanks]

Entire afternoon analysing the Earning Reports (like a true no lifer)

Only reached 2 conclusions:
1)Blizzard spent more money on its games this year (had more costs than last year - more 6 million dollars to be exact)
2)And the revenue went up 15% (which is equivalent to a lot of money for Blizzard. an increase in 15% means extra 87M dollars for Blizzard)

Take whatever conclusion you can get from this...

imo Blizzard is spending more money on its games and seeing results.

- - - Updated - - -

EDIT

Blizzard made less 27 million dollars in 2018 compared to 2017
Even though its games made more revenue in 2018

Its right there: (am i seeing this wrong?)

[The Stormbringer]

https://twitter.com/Grummz/status/1095441644814401536

That about sums it up.

They brought him leaving upon themselves. Mark was an important (albeit one of many) player for four of their biggest titles and he left because of their great. Serves them right. Good on Mark for standing up for what's right.

[Big Thanks]

@Greyscale sorry to disturb you the entire day...but are you seeing this?
You are the only one that understands this charts!

Blizzard lost money if we take the entire year in consideration.

They only made more money than last year compared to the last 3 months!

[Deficineiron]

Entire afternoon analysing the Earning Reports (like a true no lifer)

Only reached 2 conclusions:
1)Blizzard spent more money on its games this year (had more costs than last year - more 6 million dollars to be exact)
2)And the revenue went up 15% (which is equivalent to a lot of money for Blizzard. an increase in 15% means extra 87M dollars for Blizzard)

Take whatever conclusion you can get from this...

imo Blizzard is spending more money on its games and seeing results.

- - - Updated - - -

EDIT

Blizzard made less 27 million dollars in 2018 compared to 2017
Even though its games made more revenue in 2018

Its right there: (am i seeing this wrong?)

depends on some variables - are you using GAAP numbers? Do they still release non-GAAP? somewhere they used to break down deferred revenue (box sales, more or less, plus other stuff) that is spread out over a number of months, and that could skew one years numbers.

2) didn't 2018 have a wow expansion release in q3? unless they are smearing that out over 6 months into 2019, 2018 overall should have been a lot more than 2017 in almost every category.

I think you can see the BFA box smear in these numbers for q4 18/17. I am not sure why y/y numbers aren't a good bit higher for blizzard 2018 vs 2017.

throw in that somewhere recently blizz said best value-added sales numbers ever for a recent quarter. that means despite that milestone, they maybe didn't even grow revenue y/y without BFA release. they may smear tokens too, no idea.

short version - take away BFA release, and blizz y/y had declining revenue, and presumably much lower income.

if they have non=gaap numbers, it will show if there is still deferred revenue carried into q1 2019. you can compare the deferred number for q4 vs q3 2018 and get a sense of what the box smear was for BFA.

I used to enjoy parsing atvi financials back when they released a wow-only revenue number, and a few of the tricks to sorting out how they present them came to mind when I saw this post.

as far as net income - were operating expenses broken down by division (e.g. blizz atvi king)? there may be something sitting in the expense side of the ledger which accounts for this discrepancy. an expansion year should not be less profitable.

here is a fun comparison - go back to q4 2009 (no box release, though some gaap wotlk smeared into q1 of that year) and look at blizz revenue and profitability for 2009 overall when they were more or less a single product revenue company. this link also has 2008 pro forma comparisons for blizzard, since half of that year was pre-merger.

https://investor.activision.com/stat...7-d520882e664c

they netted 555$m in 2009 gaap on ~1.2B$. they netted over 700m$ in 2008 on slightly higher revenue despite wotlk not being a digital sale item (in other words, you had to buy a box, unlike now, where most sales are front-loaded on day one of release)

In other words, blizzard revenue has nearly doubled since then, but they are barely making any more money overall.

[Big Thanks]

depends on some variables - are you using GAAP numbers? Do they still release non-GAAP? somewhere they used to break down deferred revenue (box sales, more or less, plus other stuff) that is spread out over a number of months, and that could skew one years numbers.

2) didn't 2018 have a wow expansion release in q3? unless they are smearing that out over 6 months into 2019, 2018 overall should have been a lot more than 2017 in almost every category.

I think you can see the BFA box smear in these numbers for q4 18/17. I am not sure why y/y numbers aren't a good bit higher for blizzard 2018 vs 2017.

throw in that somewhere recently blizz said best value-added sales numbers ever for a recent quarter. that means despite that milestone, they maybe didn't even grow revenue y/y without BFA release. they may smear tokens too, no idea.

short version - take away BFA release, and blizz y/y had declining revenue.

if they have non=gaap numbers, it will show if there is still deferred revenue carried into q1 2019. you can compare the deferred number for q4 vs q3 2018 and get a sense of what the box smear was for BFA.

They are using another format now.

Revenue - The money the company makes with games
Operating income - the revenue LESS costs and expenses - in other words, profits.

Has you can see, the first 2 numbers i underlined are the exact numbers blizzard posted as a success in the earning calls.
686 Million dollars in revenue
241 Million dollars in operating income
This were the things i underlined first in the image above.

Here for reference:


What they didnt tell you is that they actually lost money in 2018...even though they made more revenue with its games.
(CHECK "YEAR ENDED" on the image above)
Only the last 3 Months were records...compared to the last 3 months of previous year.

[kamuimac]

They are using another format now.

Revenue - The money the company makes with games
Operating income - the revenue LESS costs and expenses - in other words, profits.

Has you can see, the first 2 numbers i underlined are the exact numbers blizzard posted as a success in the earning calls.
686 Million dollars in revenue
241 Million dollars in operating income
This were the things i underlined first in the image above.

Here for reference:


What they didnt tell you is that they actually lost money in 2018...even though they made more revenue with its games.
(CHECK "YEAR ENDED" on the image above)
Only the last 3 Months were records...compared to the last 3 months of previous year.

take into consideration that the numbers you are analyzing are the extremly .... basic numbers.

to do full analysis you would need balance sheets , cash flows and profit and loss accounts , thats where all "bodies" are buried -_-

in your numbers we dont see any sort of finacial and investment incomes/losses just operating income/loss.

to analyze just operating income without taking into consideration anything else is .... well something which 99% of population would do lets say it like this

[Deficineiron]

take into consideration that the numbers you are analyzing are the extremly .... basic numbers.

to do full analysis you would need balance sheets , cash flows and profit and loss accounts , one which include also finacial and investment income not just operating income. thats where all "bodies" are buried -_-

to analyze just operating income without taking into consideration anything else is .... well something which 99% of population would do lets say it like this

basically this. the gaap sheet is just a quick-look for people to quickly compare divisions y/y and q/q who are more interested in the corporation as a whole rather than wow (i.e. people like us). there is likely a lot more info in the 10k. also any time a number looks odd liek those you need to see if anything is in this years number that stands out - though I would think operating income shouldn't include one-times unless they are division-specific?

I used to follow this, but it just isn't that fun with no wow-specific number anymore.

I was trying to find the calendar 2008 10k but it isnt up, they changed FY with the merger and the 2008 q4 one is pre-merger, ending march31 2008.

[Big Thanks]

@kamuimac @Deficineiron

Then why did Blizzard use this metric to show its success? hum?
They literally BOASTED and said this in the earning calls:

Fourth quarter segment revenues grew 15% year-over-year to $686 million and operating income increased 51% year-over-year
to $241 million

They literally said this.
And it shows right there they lost money in 2018...in that same metric they used to boast.

[Deficineiron]

@kamuimac @Deficineiron

Then why did Blizzard use this metric to show its success? hum?
They literally BOASTED and said this in the earning calls:



They literally said this.
And it shows right there they lost money in 2018...in that same metric they used to boast.

unless they have been taking one-time charges at some point (maybe the king acquisition?>), the last thing atvi has done in many many years is lose money. the contrary is true - they print money. on an operating basis, they are a very, very profitable company.

the wording of a particular headline/brag line isn't really important - they will highlight something absolutely positive which is also 100% factually true, even if they have to find unusual/non-traditional comparisons to make to come up with one. pretty standard procedure for publicly traded companies in PR's. Accentuating the positive in headline statements is completely unremarkable, and this particular example is very tame and routine. I have seen some real contortions in eps headlines to smooth over ugly things inside (syquest when they were getting trounced by iomega/zip had a couple of real doozie pr brag lines as their internal were horrible)

[kamuimac]

@kamuimac @Deficineiron

Then why did Blizzard use this metric to show its success? hum?
They literally BOASTED and said this in the earning calls:



They literally said this.
And it shows right there they lost money in 2018...in that same metric they used to boast.

because 99% of population have no clue

and people who have clue are waiting for "2nd downward bump" (missing the term in english to buy (or not buy :0 ) some cheap ATVI shares

its still a significant metric you just cannot analyse it out of context of everything else.

[Hitei]

Hahaha, you sound completely unhinged. Great metaphor! Thanks for the quick brush-up on "basic logic" and the insider info on Activision-Blizzard's corporate governance.

Haha, yeah, all that """insider info""" readily available on Activision's fucking website.
https://investor.activision.com/news...worlds-largest

Governance

Activision Blizzard's board of directors will be comprised of eleven members: six directors designated by Vivendi, two Activision management directors and three independent directors who currently serve on Activision's board of directors. Rene Penisson, currently a member of the Management Board of Vivendi and Chairman of Vivendi Games, will serve as Chairman of Activision Blizzard. Brian Kelly, currently Co-Chairman of Activision, will serve as Co-Chairman of Activision Blizzard. The three independent directors will be Richard Sarnoff, Robert J. Corti and Robert Morgado. Other Activision Blizzard directors will be Robert Kotick (President and Chief Executive Officer of Activision Blizzard), Bruce Hack (Vice-Chairman and Chief Corporate Officer of Activision Blizzard), Jean-Bernard Levy (Chairman of the Management Board and Chief Executive Officer of Vivendi), Doug Morris (Chairman and Chief Executive Officer of the Universal Music Group), Philippe Capron (Member of the Management Board and Chief Financial Officer of Vivendi), and Frederic Crepin (Senior Vice President, Head of Legal, Vivendi).

[Ehrenpanzer]

Fact: They had record earnings in 2018.
Speculation: 2019 looks to be a difficult year so they are preparing for it.

Is that really so difficult to understand?

And I have bridge in San Francisco to sell you if you are that fucking gullible to buy that shit..... NO company... ANYWHERE, lays off nearly 10% of their workforce after a (and I quote) "record year for profits".. lets cut the shit and look at reality:

1) WoW: Bleeding subs...again... They took everything players disliked in Legion and tripled down on it (Classic MAY revive this, will have to see)
2) Diablo: Diablo Immortal... need I say more?
3) Hearthstone: Solid enough base as can be expected to a years old game that is a reskin of MtG
4) Overwatch: Replaced on mass by the ADHD crowd looking for the next big thing.. they found it.. its called Fortnite.

Candy Crush and CoD are basically carrying ActiBlizzard now, with other IP's slowly becoming side projects

[crakerjack]

I don't think anything bad is going to happen to WoW. By bad, I mean neglected and treated like shit. I'll admit WoW has seen better days, but it's not like they're going to throw it down the trashcan. It's one of the very few MMORPG's out there that still requires a subscription and has millions of subscribers. It would be idiotic to can something like that seeing how every other game of its kind has withered away or gone F2P. I'm sure Blizzard is listening to all the hate and is trying to figure out someway to implement a grind that isn't shitty like azerite traits.

[MoanaLisa]

And I have bridge in San Francisco to sell you if you are that fucking gullible to buy that shit..... NO company... ANYWHERE, lays off nearly 10% of their workforce after a (and I quote) "record year for profits"

No, not buying bridges and not buying the part quoted either since profitable companies lay people off all the time in anticipation of downturns. Historically this is how companies deal with economic downturns, bad forecasts and recessions. Companies also decide to redirect their efforts toward core business functionality and trim fat elsewhere. Blizzard Entertainment has nothing major scheduled for 2019. Without a new game or expansion to sell their revenues are going to be down and probably by quite a lot. Anyone can see this.

Let's leave it at that. You're not going to change your mind and I'm not going to argue facts with you. You seem to be interested in an argument considering the hostility in your post. I'm not going to give you that.

[Big Thanks]

Fact: They had record earnings in 2018.

In the last 3 months. Compared to the last 3 months of last year.

Remember all the mounts "we" bought?

If you see the earnings reports and last image i posted.
You will see Blizzard LOST money in 2018! Compared to 2017! The entire year.

Its right there on the image:
https://www.mmo-champion.com/threads...1#post50850473

[Hitei]

In the last 3 months. Compared to the last 3 months of last year.

Remember all the mounts "we" bought?

If you see the earnings reports and last image i posted.
You will see Blizzard LOST money in 2018! Compared to 2017! The entire year.

Its right there on the image:
https://www.mmo-champion.com/threads...1#post50850473

Blizzard made less money in 2018. Activision Blizzard made $29M more total.

[Kallisto]

And I have bridge in San Francisco to sell you if you are that fucking gullible to buy that shit..... NO company... ANYWHERE, lays off nearly 10% of their workforce after a (and I quote) "record year for profits".. lets cut the shit and look at reality:

Well if you can find 1 lie, just 1 in their earnings call. Call a Lawyer because you could get Kotik and co behind bars for years.

[Big Thanks]

Blizzard made less money in 2018. Activision Blizzard made $29M more total.

Activision-Blizzard made 2.5 Billion dollars in revenue in 2018.
Record numbers compared to 2017.

Blizzard-itself also made a little bit more revenue compared to last year...but they lost money in the end.
They lost 27 million dollars in total compared to the entire year of 2017.

This is what the chart says...

[MoanaLisa]

Remember all the mounts "we" bought?

If you see the earnings reports and last image i posted.
You will see Blizzard LOST money in 2018! Compared to 2017! The entire year.

Kindly separate ATVI from Blizzard Entertainment. You're mixing the two things like they are the same thing. ATVI also includes stuff like Call of Duty and Candy Crush.

Also kindly stop implying that ATVI was unprofitable last year. That's wrong. If I make profits of 10 million dollars in one year and only eight million dollars the next I'm not "losing money".