Blizzard Entertainment Inc.’s evolving business model into free-to-play games has helped the Irvine-based video game maker offset the lowest subscription count for its flagship World of Warcraft franchise in more than decade.
The company ended the June quarter with 5.6 million WoW subscribers, down about 1.5 million players from the first quarter. It has lost more than 4.4 million subscribers since the end of 2014. The subscribers pay $15 a month to play the fantasy role-playing game online.
Blizzard, despite the most recent subscription drop, posted revenue in the last quarter topping $352 million, up 13.2% from a year earlier. Operating income slid 19.3% to $117 million.
Chief Executive Michael Morhaime credited the revenue gains to the growing popularity of the free-to-play collectible card game “Hearthstone” and the online brawler “Heroes of the Storm,” a free-to-play title that launched in early June.
Its monthly active user base was up more than 50% from a year ago, and its Battle.net site that unites gamers around the world ended the June quarter with a record number of active accounts.
Santa Monica-based parent Activision Blizzard Inc. in a second-quarter earnings report said that “Hearthstone,” “Heroes of Warcraft,” “Heroes of the Storm,” and its “Destiny” titles have more than 70 million registered players combined and have generated more than $1.25 billion in revenue.
Gamers fork out real cash as they play the freebie titles in order to boost performance, unlock new characters and realms, or add weapons and other accessories.
Expect Blizzard to get a subscription bump next quarter after its release of new WoW content and worlds in “Fury of Hellfire” in late June. It’s common for Blizzard to gain subscribers after a release and lose many of them following a few months of game play.
The company recently announced its sixth expansion set, “World of Warcraft: Legion,” marking the return of the demonic Burning Legion. The game, which will begin beta testing this year, features a new hero class, artifacts, continent and other enhancements.
“We definitely believe that there’s potential to re-engage lapsed players with good new content,” Morhaime said in a recent conference call with analysts.
Meggitt Wins $42M Contract
Irvine-based Meggitt Defense Systems Inc. landed a $42.1 million contract to supply Lockheed Martin UK with ammunition feed systems for British Forces’ Scout armored vehicles.
The ammunition handling systems will be designed and manufactured at the defense unit’s 153,000-square-foot facility in the Irvine Spectrum that employs about 220. Deliveries will begin next year and run through 2021.
The handling system, a crucial component of the Scout’s 40 mm cannon, pushes rounds laterally at high speed from the magazine along a linear track until they reach the gun’s breech, where bullets load.
Lockheed is handling production of the tank’s turret.
Meggitt Defense, which designs and manufactures ammunition handling, radar and digital processing, and environmental control systems, is part of U.K.-based Meggitt PLC, OC’s 11th largest defense contractor and aerospace company.
Bits & Pieces
Irvine-based New Western Energy Corp. acquired oil and gas leases in the Avant Field in Osage County, Okla. The company, traded on the OTC exchange, plans to pump and repair existing production wells and then analyze production to determine the location of its first drilling program.
