Activision will continue to make money from major franchises

Activision Blizzard increased its net profit by 51% in the second quarter of 2021, with results that exceeded market expectations. Revenue rose 19% to $ 2.296 billion from $ 1.932 billion a year earlier. Net income in April-June was $ 876 million, or $ 1.12 per share, compared with $ 580 million, or 75 cents per share, in the same period last year. At the same time, profit excluding one-time factors increased to $ 1.20 per share from 81 cents. The market consensus assumed the company would have net income of 80 cents per share, adjusted earnings of 76 cents, and revenues of $ 1.89 billion.

The company said it had 408 million monthly active users at the end of June, down from 435 million three months earlier. Over the year, their number increased by 20 million. The net volume of orders in the last quarter decreased by 8%, amounting to $ 1.92 billion against $ 2.08 billion a year earlier, which turned out to be slightly better than the market forecast at $ 1.91 billion. According to the forecast of the management of Activision Blizzard, in the third quarter of this year, adjusted earnings will be 75 cents per share on revenue of $ 1.97 billion. By the end of 2021, earnings are expected in the region of $ 3.54 per share, revenue - $ 8.515 billion.

In our opinion, the current harassment scandal that led to the decline in share prices will not affect the operations of Activision Blizzard. We expect the current Call of Duty, World of Warcraft and Candy Crush franchises to continue to generate significant revenue over the next few years. Among the obvious drivers of the company's capitalization growth, we can single out the long-awaited releases of Overwatch 2 and Diablo 4, which are scheduled for 2022. We believe there is room for long-term growth for the company in esports and mobile advertising, as well as mobile IP porting services. However, we believe that monetizing these options may take longer than the market anticipates.

Activision Blizzard, Inc. is the world’s largest and most profitable independent interactive entertainment publishing company. It develops and publishes some of the most successful and beloved entertainment franchises in any medium, including Call of Duty, World of Warcraft, Skylanders, and Diablo®. Headquartered in Santa Monica, California, it maintains operations throughout the United States, Europe, and Asia. Activision Blizzard develops and publishes games on all leading interactive platforms and its games are available in most countries around the world.