Last week Activision Blizzard held their First Quarter Earnings Conference Call. During this call, various executives offered not only earnings reports, but also future plans for the videogame company. Executives included Bobby Kotick, Activision Blizzard CEO, and Eric Hirshberg, CEO of Activision Publishing.
Prior to the release of Activision earnings, analysts projected profits above Activision's own forecast in February. Activision Blizzard, Inc. (ATVI) has bested the earnings estimate in three of the past four reporting periods by an average of nearly 70%. Analysts' expectations were raised even higher when competitor Electronic Arts (EA) released better than expected earnings. Without the release of any major titles, analysts were hopeful of strong showings from Activision's Call of Duty: Black Ops, World of Warcraft, and StarCraft II.
Bobby Kotick reported record net revenues, operating margin, and EPS in the first quarter. Most of this success can be attributed to a 30% increase in digital channels year over year. One of the most staggering statistics discussed during the call was that Activision reported more than 50% of their $1.4 billion revenue in the first quarter came from digital content. This is the largest portion of digital revenue ever recorded at Activision Blizzard.
"We continue to shift our business towards digital delivery of content and establishing direct ongoing relationships with our audiences," Robert Kotick said, according to the conference call transcript. "While this quarter, 50% of our revenues were digital, we are still scratching the surface when it comes to the role that digital delivery will play in our products and franchises."
In March NPD, the biggest source of gaming sales data, announced they will begin adding digital games revenue to their monthly reports. Before this NPD only tracked physical game revenue, ignoring 40% of gaming sales. Hirshberg, CEO of Activision Publishing, stated during the call that he strongly believes that digital content "continues to be the fastest-growing, most profitable part of the industry."
While the company is heavily leaning towards the digital realm, they are not abandoning physical game sales. They are set to release a new family entertainment title called Skylanders: Spyro's Adventure. This console game includes action figures and allows users to bring the toys to life in the virtual world of the game by placing them on a portal. With promising console games as well as its leadership position in the digital side, Activision shows no signs of slowing down.
Prior to the release of Activision earnings, analysts projected profits above Activision's own forecast in February. Activision Blizzard, Inc. (ATVI) has bested the earnings estimate in three of the past four reporting periods by an average of nearly 70%. Analysts' expectations were raised even higher when competitor Electronic Arts (EA) released better than expected earnings. Without the release of any major titles, analysts were hopeful of strong showings from Activision's Call of Duty: Black Ops, World of Warcraft, and StarCraft II.
Bobby Kotick reported record net revenues, operating margin, and EPS in the first quarter. Most of this success can be attributed to a 30% increase in digital channels year over year. One of the most staggering statistics discussed during the call was that Activision reported more than 50% of their $1.4 billion revenue in the first quarter came from digital content. This is the largest portion of digital revenue ever recorded at Activision Blizzard.
"We continue to shift our business towards digital delivery of content and establishing direct ongoing relationships with our audiences," Robert Kotick said, according to the conference call transcript. "While this quarter, 50% of our revenues were digital, we are still scratching the surface when it comes to the role that digital delivery will play in our products and franchises."
In March NPD, the biggest source of gaming sales data, announced they will begin adding digital games revenue to their monthly reports. Before this NPD only tracked physical game revenue, ignoring 40% of gaming sales. Hirshberg, CEO of Activision Publishing, stated during the call that he strongly believes that digital content "continues to be the fastest-growing, most profitable part of the industry."
While the company is heavily leaning towards the digital realm, they are not abandoning physical game sales. They are set to release a new family entertainment title called Skylanders: Spyro's Adventure. This console game includes action figures and allows users to bring the toys to life in the virtual world of the game by placing them on a portal. With promising console games as well as its leadership position in the digital side, Activision shows no signs of slowing down.
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