Digital revenues cross $1 billion again in 3Q16
One of the key focus areas for Activision Blizzard (ATVI) is to increase player investment. In 3Q16, revenues for digital in-game content sales exceeded $1.3 billion and rose over 100% year-over-year.
One of company’s main revenue drivers was the acquisition of King Digital (KING), which has a large audience base of more than 390 million monthly active users (or MAU).
However, King’s monthly active users were lower in 3Q16 due to seasonality and launch timing. Activision’s chief operating officer, Thomas Tippl, noted during the company’s earnings call, “Our direct digital connection to our players, development of new analytical capabilities and new business models all support our efforts to offer great content to our players to invest in.”
Important player metrics for King Digital
In 3Q16, King Digital’s GAAP[1. generally accepted accounting principles] revenue for in-game content reached $1 billion. King Digital’s mobile gross bookings, and its average revenue per user (or ARPU) rose year-over-year in 3Q16.
Given the large network of players for King Digital, Activision Blizzard considers advertising to be a positive opportunity. King Digital has been conducting in-network advertising tests, during which Activision plans to expand to Candy Crush later in 2016. Activision believes this move could positively impact its earnings per share starting in 2017.
As we noted earlier in this series, King had three of the top 15 grossing titles in the United States in the mobile App Store for the 11th consecutive quarter.