How Player Investment Drove Activision Blizzard’s Revenues in 2Q17
Activision Blizzard’s (ATVI) management has repeatedly highlighted the importance of player investment. In 2Q17, in-game purchases generated $1 billion in revenues. King Digital was again the top contributor in bookings per paying user for the eighth consecutive quarter.
The increase in mobile bookings was driven by strong user engagement and player investment. In terms of gross, King Digital had two of the top ten games in the United States (SPY) for the 15th consecutive quarter. This business segment is looking to develop a strong pipeline across its live games portfolio. King Digital has a publishing partnership with PlayStudios in the social casino vertical that should be released later this year.
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Investors and analysts should be examining whether these investments and partnerships could positively impact monthly active users for King Digital. We can see that MAUs have declined for King Digital year-over-year in 2Q16 and 2Q17.
Activision Blizzard’s chief operating officer, Collister Johnson, stated, “King also continues to build out its advertising business which we believe is an important long-term opportunity. We now have new industry-proven leadership in place driving the advertising business.”
Activision believes that premium content video advertising products could enhance user experience, deliver value to advertisers, and create new revenue streams.
The Activision and Blizzard business segments had a strong quarter in terms of player investment. Call of Duty: Black Ops Zombies was available for $30, which drove customer purchases. Higher user engagement led to an increase in add-on purchases for this game.