Q3 Earnings Call: 33M MAUs and WoW doing better than ever

[Zyky]

Biggest quarterly sub spike in the frachise history. So WoW is definitely (still) not dying.

Nice job trying to fit a narrative that's wrong. They credit the quarterly spike to CLASSIC, not to retail which is certainly dying.

[Ahovv]

Shadowlands is looking so good that I'm actually considering coming back to the game. So that's something.

[Gadzooks]

Idk why you would invest in ATVI when there are so many other stable companies out there that do important things like you know...advance science....

But realistically, I don't think the majority of players are close to retirement age and are cashing anything out. sooo.....I guess it'd be nice to know if the stock wasn't doing well so you could buy. hm.

ATVI is primarily a dividend stock, and is held in many 401ks. If you do actual research, you'll find that a lot of investors who hold ATVI are big investment firms like Fidelity and Blackrock.

I'll do the work for you:

https://money.cnn.com/quote/sharehol...=institutional

If you don't understand what a dividend is, do some homework, and it might all start to make sense for you. Your understanding of what stocks are, and are for, are a bit naive.

[Newname1234567890]

Driven by Classic. Which is not at all a good sign for retail.

Driven by classic doesn't mean no cross pollination into retail etc.

Classic success isn't retails end

[Gadzooks]

What is dollar-cost averaging? I feel even dumber now because I thought they didn't gave dividends. I guess I had them mixed up with Tencent and never checked.

Find your way to Investopia, and start reading. There's no reason to be dumb about things like that, when you have it all on the internet, free to read.

[Nero Duskwind]

Driven by Classic. Which is not at all a good sign for retail.

It is if one of the reasons for implementing WOW Classics was to use those realms as case studies to help fix the biggest design and community issues affecting retail right now. Shadowlands, for all the criticism of how barebones and underwhelming the features teaser was, is effectively a back-to-basics approach to WOW largely made possible by WOW Classic beta and live.

[Nokami]

As I said earlier, Retail costs a ton more than Classic and if it's Classic that's making the money then there's less incentive to put as much money into Retail.

Classic is making money with the initial release is not something weird, especially if we look at the insane hype before. But obviously Blizzard isn't as dumb and know that subscriber numbers for classic will go lower and lower over time (it already does as you look at realms), as it has an ending. Meanwhile Retail has infinite potential, it's their only focus when it comes to new content. So the only game that benefits from classics initial success is retail wow in the long term.

[Inukashi]

well if we say other games did not bring any players (which i doubt) we can say classic brought 1m players that werent playing retail
funny how everyone was claiming that MILIONS of players who havent play wow in years returned for wow, but when we have first actual evidence suggesting otherwise they are quiet

WoW Classic was completely overhyped, that's something I'm sure looking at the numbers.
If this 1million more players from the earning call was NOT due to d4, and blizzcon and was purly classic, that be 1m players a month playing classic.

BfA on the other side is estimated to have 3m players.
So if we take the numbers, look at them.. the best we can give classic is a 30% sub increase to wow. This is the BEST you can give classic.

Let's be honest. If I were a game dev at blizzard and my classic wow would only increase WoW's overall subs by 10-20% (what is more realistic) I would vomit and fear for my job right now.

And we don't even know yet how the numbers wil be after the overhyping of classic is gone.

The blizz share made a nosedive after earningcalls were released.

Classic was one of the worst ideas ever. They had a whole team working for over a year to release a game that increased wow subs by 10-30%.
Just think if they had put this resource into the next xpac or a new game?
Legion had a much larger spike than classic and Legion as part of retail is much more stable.

[Gadzooks]

Why wouldn’t it be a good sign? That’s a ton of money to put into the development of retail.

It's not as much income as you seem to think it is. The real dev money comes from game sales. Classic wasn't "$50 + sub", you just needed to sub, and you get it. Box sales are the big money - the kind investors look for. The sub pays for a lot of things - and right now is basically paying the bills for Blizzard as a whole, plus the cash shop. Blizzard not having any new titles for 2019 means that sub money is paying for a lot more than just retail development. And, that $15 a month is for both Classic and the pre-BfA free to play retail game's servers, support, and maintenance. Servers and bandwidth are expensive, and Blizzard has always said over the years a big chunk of the sub cash pays for that.

Having said that, they can probably coast on that income fine, but they're not growing income, which is the part the investors want to see. They have no significant increase in income until the end of 2020, unless they announce Overwatch 2 or Warcraft III Remastered as releasing in 2020 at some point. They absolutely got a big boost from Classic - arguing that is just sour grapes from the crowd who stubbornly want Classic to fail (and that's as far into that I'm going), but overall, long term, their income is slowly drying up. Classic won't be enough, over time. 2020 looks to be a pretty hard sell for Blizzard to investors, which is why you're probably going to see the cash shop get hit hard, and more "six months and you get a fancy mount" promotions. The cash shop has been significant income for them, so of course they'll use it more, since they have no actual new games to sell for at least another 3 quarters.

[Milfshaked]

Idk why you would invest in ATVI when there are so many other stable companies out there that do important things like you know...advance science....

Working class people that invest in stocks generally dont really give a shit about "advancing science". People that lack a big amount of money have to be careful about that money. That said, ATVI is probably not a great investment either.

[Gadzooks]

Working class people that invest in stocks generally dont really give a shit about "advancing science". People that lack a big amount of money have to be careful about that money. That said, ATVI is probably not a great investment either.

Investment houses like Fidelity disagree with you. You don't buy ATVI for the stock price, you buy it for the dividend.

[Trend]

No, because we're all poor and don't read literally every companies' earning reports and such. (I don't think billionaires play WoW). But that logic makes literally zero sense since the goal is to make money I guess.

Let me walk through it again because you may not understand the exchange here.

You asked why anyone would invest in ATVI because there are "other stable companies out there that do important things like you know...advance science".

I responded (quoting what you said) by asking if the most famous investor in the world made a mistake by investing over $1B in Coca-Cola. My assumption was that you would understand that Coca-Cola is not doing some great service to mankind or advancing science. My point was that your challenge of investing in ATVI based on your moral yardstick is pretty silly in the context of investing in the real world. People don't primarily spend their investing $$$ for ethics, they want a return.

Do you get it now?

[Vynestra]

If you consider this chart - The biggest jump in wow subs was 2.5m from end of mop to wod - So that means classic brought a jump higher than that.

Which is impressive, but kind of expected. I'm not sure it matters either way though - the investors for blizzard stock definitely do not hone in on just wow - if anything they're far more interested in newer titles along with the mobile market, and king has way more MAU's than activison or blizzard.

Even if wow was doing poorly, it still wouldn't be a big deal.

People put way too much thought into "WOWS SUCCESS = STOCK" which obviously is not the case.

[Dystemper]

WoW Classic was completely overhyped, that's something I'm sure looking at the numbers.
If this 1million more players from the earning call was NOT due to d4, and blizzcon and was purly classic, that be 1m players a month playing classic.

BfA on the other side is estimated to have 3m players.
So if we take the numbers, look at them.. the best we can give classic is a 30% sub increase to wow. This is the BEST you can give classic.

Let's be honest. If I were a game dev at blizzard and my classic wow would only increase WoW's overall subs by 10-20% (what is more realistic) I would vomit and fear for my job right now.

And we don't even know yet how the numbers wil be after the overhyping of classic is gone.

The blizz share made a nosedive after earningcalls were released.

Classic was one of the worst ideas ever. They had a whole team working for over a year to release a game that increased wow subs by 10-30%.
Just think if they had put this resource into the next xpac or a new game?
Legion had a much larger spike than classic and Legion as part of retail is much more stable.

LMAo Classic is the only positive news Blizzard has had in ages. Far far fra from being the worst Idea

[Usernameforforums]

A percentage increase from the previous data isnt “better than ever” for that to happen they would have to announce that they are back to 15m+ subs. That just means they did better than last time and this is the best better than last time.

[Gadzooks]

If you consider this chart - The biggest jump in wow subs was 2.5m from end of mop to wod - So that means classic brought a jump higher than that.

Which is impressive, but kind of expected. I'm not sure it matters either way though - the investors for blizzard stock definitely do not hone in on just wow - if anything they're far more interested in newer titles along with the mobile market, and king has way more MAU's than activison or blizzard.

Even if wow was doing poorly, it still wouldn't be a big deal.

People put way too much thought into "WOWS SUCCESS = STOCK" which obviously is not the case.

Most people here look at these presentations from a "how does this impact me as a player?" point of view, which is not how investors look at it, at all. If you want to know how investors are looking at it, listen to the audio of the call, and the questions asked at the end, they're usually from the bigger players from the investments firms. I have not listened to this call, probably won't, but if you're curious, it's usually posted on ATVI's site, but past calls have included questions from investors that give you a peek at what they're looking at, and it's usually about growth and debt and issues like that. This call is not posted yet, but I'd bet it will be up on Monday.

[Beet]

It's not hardcore at all. Investing is actually very simple. Stock = ownership. Buy solid companies like Visa and Apple. Or buy index funds such as SPY. SPY is s collection of the top 500 companies and your money is almost evenly distributed. Keep buying whenever you can and don't ever sell. Check out Warren Buffet on Youtube and see how he does it. I also recommend any books by Peter Lynch.

Really? I always thought those big companies were pointless to invest in unless you were already like super rich. Well shit, I will take your advice and I'll look into Buffet on YT as well Peter Lynch. Thanks man, seriously.

[Beefhammer]

Biggest quarterly sub spike in the frachise history. So WoW is definitely (still) not dying.

It's literally been dying since it was released, however EQ1 is over 20 years old and still getting expansions and was a fraction as popular as WoW, I'd say it's doing just fine.

[Dolus]

It does since retail costs a ton more to maintain with creating new content for it and all that. If all the profit is coming from classic then why bother making new content for retail?

I believe the hope is that the current design team will examine as to why Vanilla is so popular. It's not just nostalgia. It's the systems and overall design. It feels like a living and breathing world. Retail feels like an on the rails amusement park ride.

[tounsi]

Dont forget the 6 month sub mount deal, that surely added to this.