Activision Blizzard, Inc Earnings Report - WoW's Predictions

[Big Thanks]

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".

Ok but Blizzard saw no "growth" then? Which is strange....
They didnt lose money...but made less money than last year.

@MoanaLisa

Im listening to the Conference Call and:
From min 2:28 to min 2:49 they say both Activision and King achieved record segment financial records. (see? they left Blizzard out on this sentence )

https://investor.activision.com/fina...rterly-results

I know i sound like a crazy person. I need to give it a rest sorry, i wont bother you anymore

[arkanon]

If I make profits of 10 million dollars in one year and only eight million dollars the next I'm not "losing money".

I promise you any investors will see this VERY differently. "hey guys, we made way less money this year compared to last, but who cares right? we are all making money, and thats all that matters? right guys? guys? yes?"

[Hablion]

I mean, mobile is only the most profitable sector of the games industry in the world by a huge margin, especially in Asia where a majority of Blizzard's audience is located.

So, yes, whether or not you like mobile games, it is indeed likely to pay off for them.

If their focus is going to be Asia maybe they should move their HQ to Asia where it is popular. People outside of Asia are not really too fond of Mobile gaming. I am also pretty sure their big Cash Grab method using the Gatcha Function will be banned in the US and EU in the near future cause it would fall under the same guidelines as Lootboxes.

[Zenith US Horde]

I think a big part of the problem was how it was presented. It was like.. congrats guys.. biggest year ever. Then followed up with bye bye 8%. Not to mention how it was leaked before hand. I mean these people basiclly had to deal with rumors of being laid off in a record earnings year for about a month and then get punched in the mouth with it over an earnings call that said that they had never had a bigger year. Following the news of a CFO scoring 15 million bucks to resign. Not to mention piss poor management choices that lead to over hiring, cross over hiring, and lack of project planning for 2019 to boot and those people end up with bigger bucks, keeping there jobs, and telling you to pack your bags. I mean it feels like the people on the ground doing the work were walked on so bigger fish can continue to have a big pay day. Yeah, that is how life works but usually they at least try to hide it.

Yes, businesses down size when they forcast a slower year and they are obviously doing that. But I think it could have been handled a lot better. Way way better.

[MoanaLisa]

I promise you any investors will see this VERY differently. "hey guys, we made way less money this year compared to last, but who cares right? we are all making money, and thats all that matters? right guys? guys? yes?"

If I had been talking about investors I would have mentioned that. I wasn't so I didn't.

[Jinpachi]

HotS and D3 will probably be decomissioned in order to focus more on overwatch and WoW

[arkanon]

If I had been talking about investors I would have mentioned that. I wasn't so I didn't.

Stop being so aggressive, its embarrassing for any user, let alone a mod to behave like this. You comment was "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". "

I commented that a massive decrease in profit might be "ok" to you, but to investors it would be a real problem, which relates DIRECTLY to this thread. You really need to relax and stop attacking everyone on these forums just because they want to have a discussion about something. You have already been aggressive towards multiple people simply for speaking their mind and putting their opinions forward. Whether you are talking about the investors or not, its still entirely relevant - you cant simply say "yeah, well im not talking about that"

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Investors and the market seemed to take it pretty well though.
The analyst outlook for Q4 was $3.04bn in net bookings, ATVI only delivered $2.84bn, they announced 8% immediate layoffs and said 2019 would be dry when it comes to major releases.

The stock went up 2.9 points and closed +6.96%.
Business as usual.
¯\_(ツ)_/¯

i REALLY wouldn't bring stocks and investor confidence into this - go back 6 months and see how things look. Announcements like this only confirm what investors already know - and make it public.

- - - Updated - - -

That's not how anything works.

If the cost was right, im confident they would. I see no reason not to. However you are completely right, - companies dont just pack up and move to where their main market is. They might move to a country with strong trade deals with that nation though, or, to a nation with better shipping routes - not really an issue here.

[CptEgo]

Finally Candy Crush gets some fucking attention.

[arkanon]

Finally Candy Crush gets some fucking attention.

hahah, exactly! the silver lining!

[Syran]

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".

Declining profits set off alarms. If you make profits of 10 million one year and 8 million the next, you better have some good answers prepared for the investors.

[arkanon]

Declining profits set off alarms. If you make profits of 10 million one year and 8 million the next, you better have some good answers prepared for the investors.

And it obviously did. Im really unsure how people can pick and choose stats like they do, and then threaten and attack anyone who doesn't agree with them, while just flat out refusing to acknowledge the hard data.

[arkanon]

Well sorry if and of my replies offended you. I have to admit, I haven't been following ATVI's finances closely even though I'm an investor (through a fund). It doesn't really interest me too much, I was doing a cursory glance of the numbers.

I'll bug out of this thread now, been typing too many posts in it already anyhow. Again, sorry for the perceived attack, I can assure it wasn't meant to be one.

Cheerio!

hmm, just to be clear there has been a miscommunication. in no way was i referring to you. i should have been more clear. OTHERS seem able to screw the numbers any which way they please and yet ignore others. No apology needed friend.

[kamuimac]

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

this is simply not true . i know 1 huge company who is laying off thousands of people and effectively killing of hundreds of little companies that it outsourced its work to because they build 2nd and 3rd factory in Bangladesh and are moving production offshore even though they had over 8% percent growth last year and are recording one record year after another.

its called optimalisation . all succesfull companies do it all the time. most of them are just not in spotlight like blizzard.

[Low Hanging Fruit]

this is simply not true . i know 1 huge company who is laying off thousands of people and effectively killing of hundreds of little companies that it outsourced its work to because they build 2nd and 3rd factory in Bangladesh and are moving production offshore even though they had over 8% percent growth last year and are recording one record year after another.

its called optimalisation . all succesfull companies do it all the time. most of them are just not in spotlight like blizzard.

They should optimize out the people that made the decisions that got them here and optimize a reason not fo get a CFO a welcome back bonus of 15 million for just sitting down in the chair. Weeks before a big layoff. Instead it was people actually doing something no matter how misguided it was that lost their jobs. Very optimal indeed.

[Big Thanks]

It's important to understand that those year-on-year numbers are comparisons of two different years.

Blizzard had positive operating income both 2017 and 2018. They had positive EBIT (earnings before interest and tax) both years.
They didn't lose money. It's a comparison of two different years. A sort of a performance benchmark.

In comparison, they had $179 extra costs during 2018 and revenue, (again, in comparison), wasn't scaling the same way as it did in 2017 so (comparing these two years) their operating income didn't perform as well (it decreased with $27M). But remember that's not "lost money". Both years had very similar operating margins (35.8% and 35.7%). They made money both years. It's just that 2017 and 2018 had different cost/revenue structures. Because no two years are identical.

They had a lot of releases in 2018 which probably means they had lot of external costs (marketing) related to releases. They spent 2017 mostly in "production mode".
That's one explanation, but there are of course loads of details and reasons why one year doesn't look the same as next year.

Numbers are fun, but they have to be read in correct context.

Also - keep in mind that you're trying to dig out Blizzard's performance out of ATVI report - you're never going to be able to form a full picture, because you're going to be missing a lot of numbers - they don't report business unit details.

Thank you Greyscale. I would seem like a crazy person if it wasnt for you
Was fun all this adventure with Blizzards numbers.

I need to give it a rest now....

[kamuimac]

They should optimize out the people that made the decisions that got them here and optimize a reason not fo get a CFO a welcome back bonus of 15 million for just sitting down in the chair. Weeks before a big layoff. Instead it was people actually doing something no matter how misguided it was that lost their jobs. Very optimal indeed.

you have no clue how world operates.

15 mln is not that much for competent people with this unique set of skills .

you are writing this from a position of jealousy that others have unique skills which are worth that much.

[Vorkreist]

Since you seem to know how many subs are left, you should leak it as you already have the proof. Tells us where you got that number?

Because everybody quit already. The only ones left are salty fanboys like you who still play solo rpg in their solo shards.

[Gorsameth]

Declining profits set off alarms. If you make profits of 10 million one year and 8 million the next, you better have some good answers prepared for the investors.

That's the problem of capitalism, it demands unending unsustainable growth.

[Ungeir]

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.

There's also a very poignant proof that what they are doing is "normal" and expected: the markets have reacted positively. I was listening to analysts this morning commenting in business media on ATVI and they were tentatively positive on the report and course of action. They were mostly focused on ATVI managing to release multiple major hits in 2020, and saw the layoffs and restructuring as a very minor and expected response to the 2019 outlook. Not even something to be considered a strategy shift, crisis or strong response. Just business as usual.

These are analysts who look on this from outside and are completely detached from the position of customers and fans. I do think it was interesting that they recognized that releasing more than one big-seller in 2020 was important to the health of the company. They also applauded the increased focus on mobile and expect at least one mobile release (other than Diablo Immortal) in 2020.

[Big Thanks]

That's the problem of capitalism, it demands unending unsustainable growth.

lol, ive just been silenced in reddit.
I posted the information i got from the earning reports with proof and images and explanations and i got this:



Everyone was agreeing...until it got removed