For Diablo, our plan to enter an era of unprecedented content scale for the franchise has experienced a strong start with the September release of Diablo II: Resurrected, the return of one of the most acclaimed titles in PC gaming history. First week sales of the title were the highest recorded for a remaster from the company.
-Activision-Blizzard Q3 2021 Presentation
As anticipated, yesterday saw the Activision-Blizzard Q3 2021 financials announced, which covers the period from July 1 through September 30 2021.
I put those dates in there just to be clear as to why I expected at least a little drama on the Blizzard front being that is the timeline when the California Department of Fair Employment and Housing hostile workplace lawsuit was headline news in the gaming community.
If players were really mad at Blizzard for being a horrible company, then it feels like there should have been some pain on their bottom line. Instead, Blizzard posted its strongest quarter in 2021, bringing in $493 million, up $60 million from the $433 posted in Q2 and $10 million ahead of the $483 million posted in Q1.
Those were not “launch a new WoW expansion” numbers like Q4 2020, but they were still ahead of “its a pandemic and we’re all stuck at home playing video games” numbers.
Activision Blizzard Q3 2021 Financial Results Presentation – Slide 13
Margins were down a bit, 38% in Q3 compared to 43% in Q1, but still up when measured against Q2, when they dipped to 33%.
Overall, things were looking up for Blizzard in Q3, which might have been expected to have been the summer of their discontent. What saved Blizzard’s bacon?
Apparently Diablo II Resurrected is a very popular title. According to the earnings call it was a huge hit in South Korea, which might explain why I see Battle.net queues close to midnight Pacific time. While people have been upset about BNet’s performance, it is apparently one of those problems related to being too successful.
That, however, was the extent of the good news at Blizzard as their achievements slide in the presentation deck shows.
Activision Blizzard Q3 2021 Financial Results Presentation – Slide 8
It opens with the quote I have at the top of the post, which honestly could have been taken as faint praise given how the Warcraft III remaster went. Even the StarCraft remaster wasn’t a huge hair deal. But Diablo II Resurrected, which launched on PC and consoles in September, was enough to carry the quarter, because the rest of that slide is excuses and qualified successes.
Diablo Immortal, which I keep reminding people had a playable demo at BlizzCon 2018, is now slated for some point in the first half of Q2 2022, while Diablo IV is nowhere in sight. It seems unlikely for 2022.
The Overwatch 2 entry is likewise vague on when it might be a thing that can generate revenue. 2022 doesn’t seem to be the target anymore.
Hearthstone is hard to judge, so whatever “stable” means, that was what it was. We’ll see if the new game mode warrants a big mention when they review Q4.
And World of Warcraft, which is running both retail and classic modes now, recorded the strongest engagement for a non-expansion year which, given the cliffs the subscriber base has been driven off of for some of those years, might not be as big of a brag as you might think, especially when they’re running Shadowlands and Burning Crusade Classic in parallel. That the Monthly Active Users for Q3 2021 stayed stable at 26 million for Blizz while D2R was booming probably means WoW was down by quite a bit.
So I guess a qualified good quarter for the Blizzard side of the house, even if they are the third place studio, such that people are starting to refer to the company as “ABK,” for Activision Blizzard King.
It also seems that bad behavior didn’t harm them as much as it might have. But gamers are not, as a larger group, an especially politically aware group I imagine. I noted yesterday that Riot didn’t seem to suffer from bad behavior, with League of Legends remaining hugely popular even as headlines haunted them. Maybe being a bad place to work doesn’t hurt your bottom line, which I am sure will make everybody toiling in the video games industry happy.
You can certainly argue that the lack of a strong plan for Shadowlands and having no other fresh titles on deck hurt them as much, if not more than, the investigation by the state of California did.
We will see have to see what Q4 looks like, with the new Hearthstone game mode, WoW Classic Season of Mastery, and the cat mount being the only big items visible. I’m surprised the cat mount didn’t get a mention on the Blizzard slide.
But we won’t get the Q4 news until February, so we’ll see what happens then.
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