Activision Blizzard (NASDAQ:ATVI) just closed the books on a difficult financial year that was heavily impacted by its divestment of the Destiny gaming franchise. Between its now-smaller portfolio and the struggles it experienced with some other video game titles, its revenue fell by just over $1 billion in 2019, to $6.5 billion.

In a conference call with Wall Street analysts, CEO Bobby Kotick and his team projected a modest boost in fiscal 2020, though sales will be pressured due to the start of the transition to the next generation of gaming consoles. Yet executives detailed plenty of positive momentum as Activision Blizzard aims to push its biggest franchises into new platforms and subscription-based selling models.

Let's look at a few highlights from management's call with investors, which included the company's financial targets for 2020.

A young couple play video games.

Image source: Getty Images.

Portfolio hits and misses

"Our strategy to focus on our growth pillars and investment in creative and commercial resources, and initiatives of our biggest franchises is delivering results."
-- CFO Coddy Johnson

Activision Blizzard's packed content portfolio achieved more wins than losses last quarter, which pushed its sales and earnings past management's early November forecast. In the positive column, the latest Call of Duty launch beat expectations over the holidays, just as rival Electronic Arts (NASDAQ:EA) noted for its major Star Wars release in the period. Unlike EA, though, Activision achieved growth in its mobile division too, helped by a blockbuster entry from the Call of Duty franchise.

On the downside, its King Digital segment dragged the whole company's profitability lower due to weak results in a few minor titles and slower audience growth for the Candy Crush franchise. Hearthstone also struggled to stand out in the competitive free-to-play gaming niche.

The bigger picture

"Having our franchises on all platforms in all geographies with a constant flow of content and leveraging the additional touch points we have available to us like e-sports and advertising, continues to be our focus."
-- Kotick

Executives highlighted the fact that the active user base in the World of Warcraft community doubled in the second half of 2019, after the company launched WoW Classic. That success demonstrates how much value lies in Activision Blizzard's deep library of content and brands. But effectively capitalizing on those assets in a quickly changing industry will remain one of its biggest challenges. Activision Blizzard's guiding principle is to put out the best entertainment options possible. "We take our responsibility to deliver high-quality content very seriously," Kotick said.

Looking to 2020

"We know that some of our investments won't bear fruit until next year, but we're confident in our growth trajectory this year, and our growth plan, and we enter 2020 with momentum."
-- Kotick

Activision Blizzard projects a 5% boost in annual net bookings, a measure of sales growth, in 2020. Taking the conservative approach, management assumed that many major titles, including the next Call of Duty launch, will experience modest volume declines. The company also projected accelerated spending in areas like information technology and data analytics.

These initiatives will pressure earnings and likely push non-GAAP profits down to $2.22 per share from the $2.31 per share notched in 2019, executives said. The good news is that investors should have a clearer picture of when to expect faster sales gains, and can anticipate a return to profit growth by late 2020.