Activision earns $956 million from microtransactions in Q1 2020

Activision reports stellar Q1 2020 earnings, driven by digital surges in monetization, game purchases, and strong engagement.

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Actvision's latest earnings report re-affirms it as the lord of monetization, second only to Tencent's mobile might. Activision-Blizzard's Q1 earnings were boosted by COVID-19 quarantines, which saw more players jumping into Call of Duty and Blizzard games over March. Warzone in particular amassed 60 million players and helped spiked microtransions by 20% YoY to $956 million. Warzone also sparked Modern Warfare sales and helped the game become the best Q1 performer in Call of Duty history.

In the three-month period ended March 31, 2020, Activision-Blizzard earned a total of $1.788 billion in net revenues, up a mighty 23% from last year. The company beat its net revenue forecast by $148 million, and total net bookings by $247 million.

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"In terms of cash flow, the increasingly digital recurring and cash generative nature of our business remains one of our fundamental strengths. This powers a strong balance sheet, which continues to be an important strategic asset for the company, especially now," Activision CFO Dennis Durkin said in a recent earnings call.

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Activision lead all segments in Q1 driven by strong Call of Duty performance across COD Mobile, Modern Warfare, and Warzone. Activision's key games made $519 million in revenues, or 29% of total net revenues. King came in second place with $498 million from revenues in Q1 thanks to Candy Crush, comprising 27% of total net revenues. Blizzard came in third place with $452 million in revenues, accounting for 25% of earnings.

• Net Revenues - $1.788 billion, up 23% YoY
• Net Bookings - $1.52 billion, up 20.6% from Q1 2019
• Digital - $1.44 billion, up 3.5% YoY
• Microtransactions/subs - $956 million, up 20.4% YoY

Net bookings, or net revenues minus deferrals, generated $1.52 billion for Activision in the quarter, up a strong 20.6% year-over-year. Digital accounted for 89% of Activision-Blizzard's quarterly net bookings, and microtransactions and subscriptions pulled in $956 million, roughly 66% of digital net bookings for Q1 2020.

Activision plans to earn a strong $6.08 billion in calendar year 2020, roughly 19% lower than the $7.5 billion it earned in 2019.