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Activision Blizzard Exceeds Outlook With $580M Q2 Profit, Blizzard Employees Dissatisfied With Salaries

Video game holding company Activision Blizzard published its financial earnings for the second quarter of 2020. The company generated net revenues of $1.93B USD, up 38% compared to $1.4B during the same period of 2019. 

In total, the company recorded a net income of $580M or $0.75 earnings per share (EPS), up 77% compared to $328M in Q2 2019. The biggest driver of engagement and financial performance during this period was the Call of Duty brand. Time spent in all of the company’s games grew 70% compared to the same period of last year, reflecting the changes in entertainment habits caused by the COVID-19 pandemic.

The video game holding company reported key performance indicators for its three business segments, Activision Publishing (console games), Blizzard Entertainment (PC games), and King (mobile games). Spread over all its assets, the company reported a player base of over 400M players, up 30% year-over-year, with more than 100M players in each of Activision Blizzard’s operational regions, EMEA (Europe, the Middle East, and Africa), Asia Pacific, and the Americas. Activision Blizzard CEO Bobby Kotick said in the company’s earnings call that “we estimate that approximately half of our players are now female.”

Activision had 125M monthly active users (MAUs) in the second quarter, mostly driven by its Call of Duty series player base. The business generated roughly 51% of Activision Blizzard’s total revenues at $993M, up 270% year-over-year, and an operating profit of $559M at a 56% operating margin, an all-time high, reflecting high incremental margins for both in-game and upfront sales on console and PC. Time spent in Call of Duty increased eightfold compared to last year. Since Call of Duty’s battle royale title Warzone launched in March, the game brought in more than 75M players. The series’ mobile title CoD Mobile now surpassed 250M downloads globally. 

Blizzard had MAUs of 32M for the period and generated revenues of $461M, increasing 20% year-over-year, primarily driven by another strong quarter for World of Warcraft. The segment’s operating income for Q2 was $203M at an operating margin of 44%, which increased significantly year-over-year primarily due to strong revenue growth.

King reported 271M MAUs and generated revenues of $553M for Activision Blizzard during the quarter. The segment’s revenues increased by 11% year-over-year to the highest level since the acquisition of the company. King’s operating profit was $212M with an operating margin of 38%.

Last month, Blizzard Entertainment implemented the results of a study it performed to ensure fair pay following a 2019 internal survey that revealed that more than half of Blizzard’s employees were dissatisfied with their compensation. The measures led to employees circulating a spreadsheet to anonymously share salaries and recent pay increases on July 31, revealing most of the raises were below 10%, significantly less than Blizzard employees said they expected following the study.

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