Orange County Business Journal

Blizzard Revenue, Profits Fall; No New Games in Q1

Chris Casacchia Thursday, February 9, 2012

Irvine-based online game maker Blizzard Entertainment Inc. pared down subscription losses in the fourth quarter for its flagship title World of Warcraft as revenue and operating profits dipped.

Blizzard, a unit of Santa Monica-based Activision Blizzard Inc., posted revenue of $276 million, down nearly 52% from a year earlier.

The company reported an operating profit of $71 million, down 76% from a year ago.

Blizzard did not release a game last year, which accounts for some of the declines in both sales and profit.

It ended the fourth quarter with about 10.2 million World of Warcraft subscribers, down less than 1% at the end of the third quarter.

The slight drop-off may have quelled some investor concerns, following Blizzard’s disappointing performance in the prior quarter when some 800,000 gamers dropped subscriptions, down 7% from the second quarter.

Blizzard’s customers pay about $40 for World of Warcraft and $15 a month to play it online.

The game features two fictional races fighting for control of a fantasy world.

Activision said Blizzard will not release a game in the first quarter, surely a disappointment to its fervent fan base and investors awaiting the release of Diablo III.

Activision CEO Bobby Kotick told the Guardian on Feb. 9 that Diablo III will launch in the second quarter.

The company said in its forecast for 2012 it plans to launch two “unnamed” Blizzard titles.

Blizzard told the Business Journal last year it had planned to launch three games this year for the first time in its history, a claim the company touted during its annual fanfest Blizzcon in Anaheim.

Blizzard’s results didn’t drag down earnings for parent Activision.

The company posted net income of $99 million on $2.4 billion in revenue, beating Wall Street expectations as strong sales for Call of Duty: Modern Warfare drove results.

The military strategy game was the top selling title in 2011.

The company projects an adjusted profit of about $32.4 million on revenue of $525 billion in the current quarter, lower than Wall Street estimates.

Analysts on average forecast adjusted profits of $159.6 million on $771.6 million in sales.