The Santa Monica, Calif.-based company raised its earnings guidance for the full year 2015 to $1.30 per share from $1.20 per share. On a trailing twelve month basis, the company’s earnings per share stands at 1.26. GAAP digital revenues were $581 million in the quarter, accounting for 45% of the total revenues. This trend stopped with the launch of Cataclysm (2011), the game when from an all time high of around 12 million subscribers to a very steady decline.
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“Digital is the fastest-growing business with the videogames industry and not only that, it’s lifting margins”, said Eric Handler, an analyst with MKM Partners LLC. “It just creates a lot of efficiencies”, he said. Today was the company’s earnings call for the second quarter of 2015 and the news wasn’t much better.
The “Warcraft” movie is set to be released in June 2016 and is based off the Blizzard franchise that includes the massive multiplayer online role-playing game “World of Warcraft“. Among these statistics was the report that World of Warcraft had lost 1.5 million subscribers during the quarter. He expects interest to pick up with a coming expansion pack and feature film. Another bright spot in WoW’s future is the Warcraft movie. But he noted that the quarter probably benefited from the release of Blizzard Entertainment’s free-to-play multiplayer strategy game, Heroes of the Storm (and two new heroes for players to buy), which had more than 9 million players in its closed beta test, as well as the second expansion for the online multiplayer shooter Destiny, House of Wolves.
A number of equities research analysts have recently commented on the company. Perhaps, if Blizzard can reliably put their expansion factory into overdrive, players will stop cancelling subs between expansions, throwing the game into this torrid cycle of boom and bust. Twenty analysts had a consensus revenue estimate of $665.5 million.
Activision advanced 0.6 percent to $25.67 at the close in New York Tuesday. The company did not make any share repurchases during the second quarter under its $750 million share repurchase authorization ending February 2017. The highlight in this report is that the software sales were up 21% y-o-y to $ 345.5 million, despite the lack of major releases. The firm’s revenue was up 15.3% compared to the same quarter previous year.
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Digital revenue for the company came in at a Q2-record 55% of total revenue, with $569 million coming in digitally. An earlier version of this article gave incorrect numbers for these figures.
