76% Of Activision Blizzard’s Revenue From Digital Sales

[HardOCP News]

Activision Blizzard beat analysts' estimates, making $394M profit on $703 in sales, blah, blah, blah. In my opinion, the big news today is that a whopping seventy six percent of the company's revenue came from digital sales. Only seventeen percent came from retail sales.

For the quarter ended March 31, 2015, Activision Blizzard’s GAAP net revenues were $1.28 billion, as compared with $1.11 billion for the first quarter of 2014. On a non-GAAP basis, the company’s net revenues were $703 million, as compared with $772 million for the first quarter of 2014. For the first quarter, GAAP net revenues from digital channels were a record $581 million and represented a Q1 record 45% of the company’s total revenues. On a non-GAAP basis, net revenues from digital channels were a Q1 record $538 million and represented a record 76% of the company’s total revenues.

 

[lcpiper]

Did Blizzard release some serious expansions this year?

I mean digital sales for an expansion are going to be pretty high for existing customers and do subscription fees fall under digital sales?

 

[lcpiper]

ehh, it's still chump change, not even close to Norton's profits back in the early 80's when the IRS decided Norton owed an addition billion for undervalued IP transferred from Europe to the US. A billion more in the taxes they owed on their profits.

Chump Change I say.

 

[cageymaru]

Didn't Blizzard admit to losing 3 million WoW subs during the financial report?

 

[Darunion]

Didn't Blizzard admit to losing 3 million WoW subs during the financial report?

I still play but my playtime is usually just a little bit when i'm bored. It is a super fun game on expansion week but then it declines because they neglect it for too long.

 

[kbrickley]

Isn't this just a validation of something we already knew ... for years they have published studies on the declining PC game sales from groups that only tracked retail sales ... it was always assumed that the migration to digital was occurring (not that we were stopping the purchase of games) ... it was assumed that number that had shifted to digital was somewhere in the vicinity of 60-90% and this just supports that assumption

 

[lcpiper]

Didn't Blizzard admit to losing 3 million WoW subs during the financial report?

But where did they go. Most don't just stop gaming, they move to another title and if it's another Blizzard tittle then no real loss.

 

[Traze]

I'd bet more comes from "micro" transactions, than full products.

 

[Zangmonkey]

The entire software industry and especially the gaming industry is moving into digital distribution.

Buyers have pretty clearly shown they don't care much about the box-experience any more. A majority of PC game sales are now digital-only.

Blizzard is actively fighting the gold-farmer subs and fighting for "real" subs again. WoD last year saw WoW break 10M subs again.

Hearthstone is all-digital. Card and Expansion packs are the only revenue in that space. Likewise, Heroes of the Storm seems likely to be digital-only.

 

[lcpiper]

Isn't this just a validation of something we already knew ... for years they have published studies on the declining PC game sales from groups that only tracked retail sales ... it was always assumed that the migration to digital was occurring (not that we were stopping the purchase of games) ... it was assumed that number that had shifted to digital was somewhere in the vicinity of 60-90% and this just supports that assumption

There is that but there is also title loyalty. Blizzard didn't just capture huge market share, they enthralled it. These days, with MMO type titles in particular, You can't be an active and successful player unless you are pretty dedicated.

I'll illustrate;

If I play Call of Duty and get good it just takes some time and then some "maintenance time", I can afford to goof off with other titles, (buy other games), and still keep my edge. But in many MMO types, it literally takes dedication, with WoW it was dedication to your guild and their Raids, my game was World of Tanks and it required a constant progressive effort to be there in the evenings for Clan Wars competition and spend all my other time either working towards more top tier tanks or competing in Strongholds to keep our structures in good shape.

I just quit, it's too much. I can't give so much of myself anymore. But this is the model and the effect is that a person only has time for a couple of titles, maybe only one. I used to buy a new game almost every month, now, a couple in a year. I think it impacts sales, I think it has to. Sales figures alone, retail or digital,can't measure the gaming sphere accurately anymore.

 

[kbrickley]

Didn't Blizzard admit to losing 3 million WoW subs during the financial report?

The linked article indicated they still had 7 million subscribers and were still the number 1 MMORPG, so even down a few million it is like a 500 pound gorilla dropping to 350 pounds (he is still a big ass gorilla) ... also these were earnings for the entire company Activision-Blizzard ... based on this quote "Activision Publishing’s Destiny and Blizzard Entertainment’s Hearthstone®: Heroes of Warcraft™ combined now have more than 50 million registered players and nearly $1 billion in non-GAAP revenues1 life-to-date." they also seem to be positioning themselves well for new online titles

 

[WaltC]

In my opinion, the big news today is that a whopping seventy six percent of the company's revenue came from digital sales. Only seventeen percent came from retail sales.

Look, it's all "digital" and it is all retail, too... Just because a company sells via the Internet and people download their digital software instead of buying their digital software on a disk in a box from a physical storefront doesn't mean that some of it is "retail" and some of it isn't...Of course not.

Also be aware of the fact that after people download their digital software they often, if not always, put a copy of their digital software on a disk where it remains 100% "digital." It's ridiculous to call some software sales "digital" and other software sales "not digital"--ridiculous and inaccurate because it's all "digital"...

 

[Quix]

Not surprising, they don't publish many console games and all PC games are distributed digitally now. Even if you buy a disc you might as well just throw it out because all you really need is the code now anyway.

 

[AssMan]

Not surprising, they don't publish many console games and all PC games are distributed digitally now. Even if you buy a disc you might as well just throw it out because all you really need is the code now anyway.

No need to toss it they gave you a free backup copy.

 

[chenw]

No need to toss it they gave you a free backup copy.

Depends heavily on the game, but I'd much prefer backing up the installed files than using the disc, at least that way you don't have to download as many patches.