Earnings Results: ‘Call of Duty’ boosts Activision sales as Microsoft acquisition stays in limbo

Activision Blizzard Inc.’s bookings beat expectations after launching the latest title in its blockbuster “Call of Duty” videogame series ahead of the holidays, but a forecast delivered Monday could disappoint as the videogame publisher awaits word on its acquisition by Microsoft Corp.


reported profit of $403 million, or 52 cents a share, on revenue of $2.33 billion, up from $2.16 billion a year ago, with bookings — which include some deferred revenue — of $3.57 billion, up from $2.49 billion a year ago. After adjusting for stock-based compensation and other effects, the videogame publisher reported earnings of 78 cents a share, down from $1.25 a share in the 2021 holiday period. The company also reported $1.09 a share in deferred revenue and related costs.

Analysts on average were expecting adjusted earnings of $1.51 a share on revenue of $2.61 billion and bookings of $3.19 billion, according to FactSet. Shares dipped slightly in after-hours trading immediately following the release of the results, but the stock has not moved much in the past year as investors await Activision’s acquisition by Microsoft

Activision executives said “Call of Duty: Modern Warfare II” “delivered the highest opening-quarter sell-through in franchise history.” Activision had already declared that the newest title from the franchise had its best debut ever, with $800 million in sell-through in just its first three days.

The popularity of “Call of Duty” is one of the sticking points in Microsoft’s attempted purchase of Activision, with regulators concerned that Microsoft would try to make future versions of the game exclusive to Xbox. Executives have attempted to fight those concerns, offering to return “Call of Duty” to Nintendo Co. Ltd.

consoles for the first time in a decade as well as concessions on continuing to sell the game for Sony Group Corp.’s


The Federal Trade Commission has formally sought to block the merger in the U.S., and the U.K.’s Competition and Markets Authority has also been studying the proposed deal. The New York Times reported over the weekend that Microsoft expected the results of the U.K.’s inquiry this week, and did not expect them to be beneficial to the deal’s closure.

In Monday’s release, executives said “The two parties are continuing to engage with regulators reviewing the transaction and are working toward closing it in Microsoft’s fiscal year ending June 30, 2023, subject to obtaining required regulatory approvals and satisfaction of other customary closing conditions.”

Executives guided for “at least high-teens year-over-year growth for GAAP revenue, and at least high-single digit year-over-year growth in net bookings and total segment operating income” for the new fiscal year, and “at least high-teens year-over-year growth for GAAP revenue, at least midteens year-over-year growth for net bookings, and at least high-single-digit year-over-year growth for total segment operating income” in the first quarter. That may disappoint Wall Street, as analysts on average were projecting net bookings growth of roughly 17.7% in 2023 and 28.6% in the first quarter, according to FactSet.

Activision executives will not hold a conference call to discuss the earnings report, due to the expected acquisition. Microsoft agree to pay $95 a share to acquire the videogame publisher last January, and shares ended Monday selling for $71.58 a share.

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