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Activision earns $956 million from microtransactions in Q1 2020

Activision's microtransaction and subscription earnings jump 20% YoY thanks to Warzone and COVID-19 quarantines.

@DeekeTweak
Published Wed, May 6 2020 10:33 AM CDT   |   Updated Tue, Nov 3 2020 11:43 AM CST

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.

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Derek is absorbed with the intersection of technology and gaming, and is always looking forward to new advancements. With over six years in games journalism under his belt, Derek aims to further engage the gaming sector while taking a peek under the tech that powers it. He hopes to one day explore the stars in No Man's Sky with the magic of VR.

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