Activision Blizzard Revenue Slumps in First Quarter Following Massive Layoffs
The company laid off over 750 employees in February.
Activision Blizzard saw a decrease in net revenue over the first quarter of 2019 to $1.83 billion, down from $1.97 billion from the same period last year. Despite the successful launch of the company's Sekiro: Shadows Die Twice, which shipped two million copies in its first 10 days, and year-over-year and quarter-over-quarter growth for Candy Crush, from Activision Blizzard's subsidiary mobile studio King, the quarter was also marked by massive layoffs of over 750 employees at the company in February.
The layoffs at the company were meant to help Activision prioritize its biggest franchises — Call of Duty, Candy Crush, Overwatch, Warcraft, Hearthstone and Diablo — amid increased competition from free-to-play games like Fortnite, and the number of developers working on those games is expected to increase around 20 percent this year.
While the numbers for the first quarter of 2019 were down year-over-year, they did come in above previous expectations of $1.7 billion, made by the company in February. Activision Blizzard reaffirmed its forecast for the 2019 fiscal year, aiming for just north of $6 billion, which it hopes will be boosted in large part by a new Call of Duty title and World of Warcraft Classic, both of which are set to launch later this year.
Wall Street was still positive on Activision, with the company's stock up over two percent at the close of trading on Thursday.
Aside from Sekiro and Candy Crush, Activision Blizzard also touted its e-sports organization Overwatch League as seeing "strong growth in viewership," according to CEO Bobby Kotick. Meanwhile, five franchises for a global city-based Call of Duty e-sports league have been sold in Atlanta, Dallas, New York, Paris and Toronto.
"The prices of Call of Duty teams are well ahead of the prices for Overwatch teams [when we first launched the league]," Kotick told investors on Thursday.
The Call of Duty franchise is also headed to mobile in North America (the game is already available in certain Asian markets). Originally announced at the Game Developers Conference in March, Call of Duty Mobile is being developed by Tencent's Timi studio. Activision sees "significant potential" of the shooter on mobile platforms, touting 10 million pre-registrations for the title, which will launch later this year stateside.
When asked about planned cloud streaming gaming services like Google's Stadia that are currently in the works, Kotick said, "We have a better opportunity than most to capitalize on all these new platforms. ... There will be more ways to engage players and that serves us better than almost any other company."