Our reporter Li Haoyue
In the early morning of February 7, Activision Blizzard announced its financial report for the fourth quarter of 2022. This is also the first time Activision Blizzard has announced its financial report after breaking up with NetEase.
The financial report shows that the three major subsidiaries of Activision Blizzard, Activision, Blizzard and King, all achieved growth in net income in the fourth quarter of last year.
Among them, Activision Blizzard achieved a net income growth of 27% in the fourth quarter in the Asia-Pacific region including China.
Insiders believe that Activision Blizzard and NetEase broke up does not mean that Activision Blizzard give up the Chinese market.
It is worth mentioning that on the afternoon of February 7, it was reported on the Internet that Blizzard China’s agency rights will be taken over by Shengqu Games, a wholly-owned subsidiary of the listed company Century Huatong.
However, the relevant person in charge of Shengqu Games denied the rumor to the "Securities Daily" reporter.
"Call of Duty 2" sucks money
The financial report shows that Activision Blizzard’s net income in the fourth quarter of 2022 will be US$2.33 billion, and the net income in the same period in 2021 will be US$2.16 billion.
If deferred net income (revenue to be recognized) is included, Activision Blizzard's net income in the fourth quarter of 2022 will be approximately US$3.4 billion.
In addition, from the perspective of net bookings, an important indicator for evaluating the performance of game companies, Activision Blizzard’s net bookings in the fourth quarter of last year increased by 43% to 3.57 billion US dollars, exceeding the previous analyst’s estimate of 3.08 billion US dollars (net bookings refer to net of products and services sold digitally or physically during the period).
In addition, as of December 31, 2022, Activision Blizzard's overall monthly active users (MAU) in the fourth quarter of last year were 389 million, an increase from 371 million in the same period in 2021.
The revenue of the three major subsidiaries achieved year-on-year growth.
Among them, Activision's net income in the fourth quarter of last year was US$1.85 billion, compared with US$1.16 billion in the same period in 2021; Blizzard's net income in the fourth quarter of last year was US$800 million, compared with US$420 million in the same period in 2021; billion U.S. dollars, compared to 680 million U.S. dollars in the same period in 2021.
According to reports, the representative works of the three subsidiaries all achieved good results in the fourth quarter of last year.
For example, Activision's shooting game "Call of Duty: Modern Warfare II" (hereinafter referred to as "Call of Duty 2") released in October last year set a record for the highest opening season sales in history.
At the end of the fourth quarter of last year, cumulative play hours set an all-time record for a paid game at this stage of launch.
Activision Blizzard has not disclosed how much revenue "Call of Duty 2" brings.
But the game sold $1 billion in 10 days, making it the best-selling video game of 2022, according to industry research group NPD Group.
In addition, the financial report mentioned that the three games of the subsidiary Blizzard, "Warcraft", "Overwatch" and "Diablo" had strong year-on-year growth, with each net bookings exceeding US$100 million.
Activision Blizzard is confident in its performance in 2023.
Mentioned in the financial report, “We expect Blizzard’s global financial year-on-year growth in 2023 to be strong year-on-year, thanks to the launch and operation of Diablo IV.”
Shengqu Games denies the rumors
However, what Chinese players are most concerned about is still the whereabouts of Blizzard's China agency.
Regarding the future development of Blizzard’s games in China, Activision Blizzard mentioned in its financial report that Blizzard is still focused on finding alternative ways to serve the Chinese community.
On the day when its financial report was released, it was reported on the Internet that Shengqu Games, a subsidiary of Century Huatong, will take over Blizzard Games.
According to rumors, Shengqu Games will be officially represented by the end of April, and "World of Warcraft", "Hearthstone" and "Watching Pioneer" will be launched in May.
Another rumor said, "Blizzard lowered the requirements for domestic operations, but got more money, and the share reached 60%, which exceeded the previous 50% when it cooperated with Netease. In addition, Century Huatong is responsible for the development of Blizzard's IP. Mobile games, but only enjoy domestic profits in China, and only fixed profits internationally."
However, Century Huatong told the "Securities Daily" reporter: "The news is not true."
Since last year, Chinese companies such as Tencent, Perfect World, Bytedance, and Mihayou have all been rumored to be in contact with Blizzard for agency rights, but in the end, like Shengqu Games, they all denied it.
This makes Blizzard China's agency rights seem like a "hot potato".
Zhang Yi, CEO and chief analyst of iiMedia Consulting, said, "The company that is expected to take over the offer has come forward to deny it, maybe it has not yet been negotiated. There are two main reasons. One is that the procedures are difficult. If it is finalized, the company must first resolve the issue Second, Blizzard’s demands are likely to be higher than before.”
Activision Blizzard's performance began to pick up in the fourth quarter of last year, which shows that the influence of classic IPs should not be underestimated.
Winning the agency rights of games such as "World of Warcraft" means the opportunity to win the development rights of these classic IP mobile games, which is still attractive to Chinese manufacturers who urgently need to go overseas to succeed.
(Securities Daily)