Please ensure Javascript is enabled for purposes of website accessibility

How Did Activision Blizzard Set a Revenue Record Without a New Video Game?

By Motley Fool Staff - Updated May 9, 2018 at 5:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

"Call of Duty: WWII" and "Candy Crush” are still getting it done, but there were other factors.

In this segment of the Motley Fool Money podcast, host Chris Hill is joined by Fool analysts Jason Moser, Andy Cross and Ron Gross to queue up the results for video game giant Activision Blizzard (ATVI 1.90%), which took in almost $2 billion in revenue -- up 14% -- in the first quarter.

The launch of the Overwatch esports league also helped. The real drama of the day, though, was that Dow Jones released the company's earnings early -- and it was inaccurate.

A full transcript follows the video.

This video was recorded on May 4, 2018.

Chris Hill: Interesting week for Activision Blizzard. Shares of the video game maker were up on Friday after first quarter revenue came in at a record just shy of $2 billion. Kind of noteworthy, Ron, because Activision Blizzard didn't release any new games this quarter.

Ron Gross: No new games. They did launch their OverWatch video game League, which has actually been pretty successful. But you're right. Really successful quarter. Revenue up 14% on the backs of Call of Duty World War II, which is their latest Call of Duty game, Candy Crush, believe it or not. I can't believe that whole thing.

Hill: That's still happening?

Gross: People still love the Candy Crush. Doing really well. They raised full-year guidance slightly. Interestingly, even though they raised guidance, I think it was a little shy of what analysts were hoping to see. I think there was a little bit of disappointment there.

But, I think the bigger story here is the evolution of video games, and what we're seeing right now with these games that are called battle royale games, Fortnite being the one that people have mostly heard of, I think, that have taken the video game industry literally by storm. I have never seen anything like it in my house, for sure. I know that's anecdotal evidence of one, but it's a big, big deal. Activision and companies like Activision need to step up and figure out a strategy to battle that. And they're doing things like releasing updated versions of their games and new modes of play, but it's a serious competition that they need to be aware of.

Hill: There was also a little bit of unexpected drama with Activision Blizzard, because their earnings report somehow was released early by Dow Jones, and it was incorrect. The revenue was much lower. [laughs] I feel like Dow Jones needs to send a fruit basket to headquarters.

Gross: [laughs] Yes. As you say, two mistakes: information released early, it's embargoed until a certain time, is the fancy term for it, and they kind of forgot about the embargo; and then, the revenue number was actually the 2017 revenue number, not the 2018. So, somebody made a bit of a boo boo there. [laughs] They'd better make sure it doesn't happen again.

Andy Cross: Or some computer algorithm did.

Gross: Yeah, something.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Activision Blizzard, Inc. Stock Quote
Activision Blizzard, Inc.
$77.94 (1.90%) $1.45

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.