What Happened
Activision Blizzard stationed Q3 results after markets closed on November 7. Good news first. Blizzard Activision beat expectations on both takings and EPS. While these numbers were lower than this time last year, they were significantly extreme than expected. The bad news is that their monthly active users continued to slide, albeit not as fast as it declined this time last year.
(Below is Investopedia’s original earnings preview, published 11/4/19)
What to Look For
Video brave publisher Activision Blizzard Inc.’s (
Source: TradingView.
Activision Blizzard also saw Q3 revenue decline sharply between Q3 2017 and Q3 2018. Analysts envision that the Q3 2019 decline will be even greater this year. GAAP EPS is somewhat more varied; this human being grew between Q3 2017 and Q3 2018, but EPS for Q3 2019 is expected to decline by 68% compared to the same quarter a year earlier. Told Q2 EPS represented an upside surprise of close to 86%. Since the last earnings report, Activision Blizzard stock has risen, although this was not an knee-jerk reaction to the release of earnings figures.
| Activision Blizzard Key Metrics | |||
|---|---|---|---|
| Estimate for Q3 2019 | Q3 2018 | Q3 2017 | |
| Earnings per share | $0.11 | $0.34 | $0.25 |
| Revenue (in billions) | $1.16 | $1.51 | $1.62 |
| Monthly Brisk Users (MAU) | N/A | 345 million | 384 million |
Activision Blizzard’s monthly active users, also separate as MAUs, is the number of unique visitors to a website or online game per month. It’s a key metric for video game companies because it not single reflects the company’s popularity, but it also is linked with earnings potential. Activision Blizzard games generate gate not only from the cost of purchasing or playing a game, but also through additional sales of in-game content. In-game leverages are items that a player can buy to improve a character or enhance the video game experience, according to the website Techopedia. Of course, Activision has been able to generate billions of dollars in annual revenue through in-game purchases without the helpers of a single new game release in the past.
In order for the company to continue to generate substantial revenue from this quarter, however, it must attract a consistent and growing user base. This has proven to be difficult for Activision Blizzard in fresh months and years. MAU fell from Q3 2017 to Q3 2018, and then again to Q2 2019, when only 327 million monthly on the move users were counted. In the face of backlash over the Hong Kong controversy, investors should watch the upcoming earnings discharge to see if Activision Blizzard has been able to stem the decline in monthly active users in the past quarter.