Diablo Immortal Launch Falls Short for Activision Blizzard’s Q2

Still In Hellish Waters

Diablo Immortal Launch Falls Short for Activision Blizzard’s Q2 1

While Diablo Immortal has stimmed player engagement slightly, it was not enough to help Activision Blizzard meet its Q2 revenue goals in 2022.

Activision Blizzard had seen its fair share of controversy and scandal, including its recent buyout acquisition from Microsoft. While Diablo Immortal’s June launch brought in a slight increase in monthly, player engagement, the finances for Activision Blizzard were down on revenue by 28% year-to-year.

Blizzard itself has been struggling to recover a quarterly uptick in the past two years where its player base was only 22 million monthly active users. In contrast, they reported having 35 million in 2018 and 32 million in 2019, according to their year-end reports. Diablo Immortal was able to raise the player base recently from 22 million to 27 million for the quarter that ended at the beginning of July.

Diablo Immortal Launch Falls Short For Activision Blizzard’s Q2 2

Here are the numbers from Activision Blizzard’s Q2 numbers as reported by gamesindustry.biz:

Revenue: $1.64 billion (down 28% year-on-year)
Bookings: $1.64 billion (down 15%)
Net income: $280 million (down 68%)
Monthly active users: 361 million (down 12% year-over-year and 3% quarter-over-quarter)

Specifically from the Activision camp, they showed a decline of revenue of 38% year-to-year and dipped 6% quarter-to-quarter. The 2019 launch of Call of Duty Mobile was not enough to improve the numbers. However, Call of Duty: Vanguard and Call of Duty: Warzone performances were better in Q2.

On Blizzard’s side, Diablo Immortal and Hearthstone were down in revenue by 7% year-to-year. The best results from Diablo Immortal’s launch were the fact that the company saw its first increase from the last eight quarters, up 4% year-to-year and 23% quarter-to-quarter.

The help also came from announcements of upcoming projects to be released such as Overwatch 2, the next Call of Duty games and the new releases of World of Warcraft: Wrath of the Lich King Classic and World of Warcraft: Dragonflight. Diablo IV was also slated to be released at some point in 2023.

Activision Blizzard would need to nail the launch in China for Diablo Immortal for the next quarter, as the company failed to do so previously. It failed to launch earlier due to an incident with offending the Chinese government over a social media post referencing Winnie the Pooh, a character banned in China.

Diablo Immortal Launch Falls Short For Activision Blizzard’s Q2 3

Scandalous Activision Blizzard CEO, Bobby Kotick, stated the company has seen a 25% uptick in developer headcount year-to-year. He noted:

“Our acquisitions this past quarter of Proletariat and Peltarion further boost our development resources, including our artificial intelligence and machine learning capabilities. Even in a challenging economic environment, with so many companies announcing hiring freezes and layoffs, our development headcount grew 25% year-over-year as of the end of the second quarter. Our talented teams are planning to release exciting new Call of Duty, World of Warcraft and Overwatch content later this year. Of course, we look forward to completing our pending $95 per share all-cash transaction with Microsoft as soon as possible.”

Activision Blizzard CEO Bobby Kotick

Various Twitter users have voiced their opinions on how Activision Blizzard could fix their new titles. Jason Schreier tweeted, “For 2023 I’d expect new paid (“premium”) content for Modern Warfare 2, not a brand new Call of Duty. Treyarch is leading the next mainline game, which was delayed to 2024, as Bloomberg reported earlier this year.”

Blizzard was roasted by the internet this past weekend when it sent out a survey asking how much Overwatch 2 players would pay for Mythic skins. With Diablo Immortal demonized for its gacha monetization strategies, it seemed that Blizzard was trying to fix their issues with users. Based on the immediate feedback, this was not the way.

With the Microsoft acquisition of Activision Blizzard and controversies, it looks tough for the company to see an increase again. While the Diablo Immortal numbers looked strong, it did not look like another promising year for the publishers. As a result of the ongoing acquisition, Activision Blizzard did not hold their typical presentation and investor call, as is customary during acquisitions.

Ridge Harripersad
Ridge Harripersad

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