Blizzard’s key franchises include popular role-playing games such as World of Warcraft, Hearthstone, Diablo and Overwatch.
The company, whose cluster of offices primarily located along Alton Parkway totals nearly 740,000 square feet, also includes the Overwatch League, a global professional esports league with city-based teams.
While parent company Activision Blizzard (Nasdaq: ATVI) based in Santa Monica, has detailed risks the business faces due to the coronavirus and industry pressures, the video game giant also made it clear that things are looking very positive financially.
“We are on track to exceed our prior outlook for the first quarter,” Chief Financial Officer Dennis Durkin said in a statement on March 29. Activision Blizzard most recently predicted companywide first-quarter net revenue of just over $2 billion, well above the results of the same period a year earlier.
First-quarter results will be released on May 4. Durkin plans to retire by June 30 and will be replaced by company insider Armin Zerza.
Approaching $2B
Blizzard Entertainment, by itself, brought in just over $1.9 billion in net revenue last year, an increase of almost 11% over 2019, according to regulatory filings.
The increase was due in large part to higher revenues from the World of Warcraft franchise, which includes the release of “World of Warcraft: Shadowlands” in November 2020.
“We do see WoW as a significant growth driver for Blizzard overall this year,” Blizzard President J. Allen Brack told investors earlier this year.
Overwatch Slump
Not all units of Blizzard are on an upswing. Activision Blizzard said in its latest annual report that the World of Warcraft 2020 increase “was partially offset by lower revenues from Overwatch,” long one of its staples.
While at-home gamers are providing a boost to the company, Activision Blizzard said the coronavirus has had a negative impact on its professional esports leagues—the Overwatch League and the Call of Duty League—and its teams, which generated revenue from live in-person events.
For now, the pandemic “has resulted in the cancellation of live in-person events and any continued health and safety concerns with large public gatherings may impact the ability of the teams in our leagues to hold future live in-person events,” Activision Blizzard said in its annual report.
It cautioned that “prolonged COVID-19 risks could result in teams being unable or unwilling to pay their franchise fees to us or participate in our leagues going forward,” which in turn could lead to further financial losses.
The Overwatch League transitioned from live events to global online play last season and is scheduled to start a new season on Friday, April 16.
In addition, Activision Chief Executive Robert Kotick told analysts on Feb. 4 the company intends to “reinvigorate the (Overwatch) franchise for the existing community with the launch of Overwatch 2” and expand it “with growth initiatives.”
Hiring Changes
Activision Blizzard said that beginning in March 2020 “our business also experienced an increase in monthly active users for certain franchises. We have, however, seen a moderation in these trends since the stay-at-home orders were originally enacted earlier in 2020.”
Blizzard was advertising openings for 370 people as of April 5. Employment at the company’s massive campus appears to be in flux, as state records indicated the company eliminating 55 local positions last month.
Parent company Activision Blizzard was trading at $98.13 per share as of the start of last week, an increase of almost 6% since the start of the year, and a market cap of $76 billion.
