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These Segments Drove Activision’s Revenue in 4Q16

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Rising revenues from Blizzard in 4Q16

Activision Blizzard (ATVI) has three business segments: Blizzard, Activision, and King. In 4Q16, revenues from Blizzard rose 46% YoY (year-over-year) to $669 million. The 2Q16 launch of Overwatch, Blizzard’s game franchise, continued to drive user engagement in 4Q16 and was the fastest game to reach 25 million players. The operating income for this segment rose 54% YoY in 4Q16.

World of Warcraft MAU’s (monthly active users) rose 10% YoY (year-over-year) in 2016 and rose 20% YoY in 4Q16, driven by the successful launch of Legion in 3Q16.

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Revenue from Activision fell in 4Q16

In 4Q16, revenues from Activision fell 23% YoY to ~$1.2 billion. However, Activision recorded the highest number of MAU (monthly active users) of 50 million in 2016. Call of Duty and Destiny primarily drove user engagement in 4Q16. Activision has increased its MAU 23% in the last two years.

In 4Q16, revenues from King rose to $436 million. The Candy Crush franchise is a significant user engagement driver for King Digital (KING). King Digital’s MAU’s were 405 million in 2016. It also had two of the top ten “highest-grossing titles in the U.S. mobile app stores for the thirteenth quarter in a row.”

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