WoW Carrying Blizzard Again in Q4 2020 Results

On Thursday afternoon Activision Blizzard held their investor relations presentation for their Q4 2020 and 2020 overall financial results.  You can find the presentation, financial results, and the recording of the inventor call on their investor relations site.

There was considerable good news for the combined company.  The Activision side of the house did especially well with their Call of Duty releases in 2020.  While that is always their big title, 2020 saw revenues for the franchise doubled, giving the Activision team a very merry Christmas indeed.

Activision Blizzard Q4 2020 Financial Results Presentation – Slide 12

Kind was up a bit, though they seem pretty consistent from quarter to quarter.

And then there was Blizzard, which did very well with World of Warcraft and the Shadowlands launch, but which was down somewhat year over year, which they blame on there being no BlizzCon and a decline across other titles.

The BlizzCon aspect probably shouldn’t be a surprise.  While I doubt it adds much in the way of net profit… it costs a lot to setup, leaving aside the amount of lost productivity it no doubt causes within Blizzard… selling 40K tickets at $250 a pop, plus however many $50 virtual tickets is still a lot of cash flowing into the company.

Meanwhile, the other titles statement seems to confirm what I was going on about in Q3, which is that we seem to have come full circle and are now back to a Blizzard where there is World of Warcraft and then there is every thing else.  WoW has been on an uptick since WoW Classic launched and Blizz is saying Shadowlands hasn’t started tanking yet, so that is where the money is.  WoW pays the bills.

And it looks like it will be that way for a while as the presentation doesn’t have a much of anything else in the forecast for Blizzard.

Activision Blizzard Q4 2020 Financial Results Presentation – Slide 7

The promise of Diablo Immortal is still out there.  I’ve read a report from somebody in the regional testing that was pretty favorable about the title, it being basically Diablo on your phone.  But it really has to ship to make some money and we’ve been wondering when that is going to happen since BlizzCon 2018.

And then there is BlizzConline coming up.  Unlike BlizzCon, this is free to watch, so no direct revenue boost is expected, though they will no doubt hype up the gear store and such.  The big deal is the future plans.  Where are the non-WoW franchises going and are we going to see anything new?

Otherwise, there isn’t even a Hearthstone expansion on the list.  Maybe they are holding that for BlizzConline.  They said on the call that we wouldn’t be seeing Diablo IV or Overwatch 2 in 2021.  In summing up BlizzCon 2019 I thought I was being a bit caustic suggesting that Diablo IV wouldn’t arrive until 2022, but there it is.

And how is Overwatch 2 not out yet?

I don’t follow Overwatch that closely, but back at BlizzCon 2019 they were talking about it like it was almost ready.  It is mostly a PvE campaign, right?  But then I guess Diablo freakin’ Immortal isn’t out yet either and that looked ready to go at BlizzCon 2018, so clearly we need to allow a lot of lead time for announcements involving anything besides WoW and Hearthstone.

Other Coverage:

• Massively OP – Includes notes from the call
• VentureBeat

 

A Good Fourth Quarter for Blizzard… When Compared to the Rest of 2019

Activision Blizzard had their Q4 2019, and 2019 overall, financial results announcement and conference call yesterday.  You can find all the numbers, the slide deck, and the conference call recording over at the investor relations site.

The basic financials for the three groups were presented in the slide deck as usual.

Activision Blizzard Q4 2019 Financial Results Presentation – Slide 9

Revenue was down from last year’s Q4 results, when Blizzard pulled in $686 million, but operating income was up from $241 million.  They made more money from less income, so margins were also up from last year’s 35%.

Compared to the rest of the year, Blizzard’s revenue and income was heavily tilted towards the end of the year, giving it a distribution akin to its Activision stablemate, which tend to make most of its money when the latest Call of Duty launches every year in Q4.

• Revenue / Income / Margin
• Q1 $344M / $55M / 16%
• Q2 $384M / $75M / 20%
• Q3 $394M / $74M / 19%
• Q4 $595M / $260M / 44%

For Blizzard the highlights were a bit of hand waving and repeated mentions and nods towards WoW Classic.

Activision Blizzard Q4 2019 Financial Results Presentation – Slide 7

A few things happened between the end of Q2 in June 2019 and the end of the year, but WoW Classic was the big one.  Bobby Kotick specifically said on the call that adding WoW Classic to the WoW subscription doubled subscribers over that period.  Yay WoW Classic.  But they didn’t mention a lot else, including what a rebuke to the current game the popularity of WoW Classic is, and were clearly avoiding bringing up some things.

I am reminded of the CEO of EA on the first earnings call after the launch of SWTOR where they declined to break it out or even mention it specifically.  He said that SWTOR was not their most interesting title or some such.  Battle for Azeroth is clearly not on the “interesting” list over at Blizz right now.

Nor is Warcraft III Reforged.

Over at Massively OP they reported on the question and answer segment of the call where Activision Blizzard was clearly ducking questions related to a few things they didn’t want to talk about.

The company also declined to break out total revenue and income numbers for the three divisions, something they have done in the past on their charts.  But we have the quarterly numbers.  I typed them in above.  I can also add them up to get totals.

In 2019 Blizzard made $1,717M in revenue for $464M in operating income, which gives a simple margin number of 27%.

In 2018 Blizzard made $2,291M in revenue for $685M in operating income, which put the simple margin number at 30%.

Basically, Blizz was down 25% in revenue and about 33% in income in 2019.  Not a good year for them in that regard, though all numbers are relative.  I am certain some smaller studios would think their dreams had come true if they pulled in a quarter of what Blizz did in 2019.

And will things get better?  The slide deck promises “follow-on” content for WoW Classic, but so far as I have seen that just means the remaining unlock phases.  Giving us Darkmoon Faire and the final raids will make people happy, but it isn’t going to grow the subscription numbers.  For what is in the plan, those numbers have peaked, dropped off some, then hit something of a steady state.  And we know that a steady state for an MMORPG is really a slow decline.

Other than that, there isn’t a lot on the horizon.  Yes, there is the Shadowlands expansion, but that won’t be until Q3 and, while it will likely cause a spike in revenues, it needs something special to hold people.

There will be more Hearthstone decks, because there are always more Hearthstone decks.  And Diablo: Immortal will go into regional testing at some point.  Didn’t NetEase claim that was done almost a year ago?  And Blizzard’s recent efforts like the 8.3 patch and Warcraft III Reforged have not been burnishing the company’s reputation for quality and polish.

Will 2020 revive Blizzard’s fortunes or just see them sink further?

Related:

• Massively OP
• MMO Fallout
• Motley Fool (transcript of call and Q&A)
• Game Industry Biz
• PC Gamer

Awkward in Azeroth

One of the baseline things of coming back to World of Warcraft after playing another MMORPG is that you are returning to the silky smooth polish that is Blizzard.  Or it has generally been that way in my experience.  This time around it felt a little different.

On wrapping up Volume I of the LOTRO epic quest lines last week I decided, after a pretty focused three month run with the game, to step away for a bit.  I was already feeling that my passion for the game was ebbing a bit.

Usually, going from LOTRO to WoW is a bit of a relief.  I have not been shy over the years about mentioning some of the UI problems with LOTRO, its cramped and awkward style, its responsiveness, legibility, and such.  This time though…

It was a combination of factors.

First, I had setup a rotation for my guardian in LOTRO on specific keys and, after three months of that, my fingers were going to those keys to fight pretty much automatically.  The problem was that my ret pally in WoW, those keys didn’t line up.  My time in Middle-earth had so solidified my response to combat that I eventually just changed my mapping in WoW to mostly line up that rotation to match where my fingers were going.

Second, on returning, I noticed that my bag were pretty full, so I decided to clear them out.  Forgetting the whole “don’t raise your item level or solo mobs will start beating the crap out of you because Blizzard thought that would be funny” aspect of Battle for Azeroth, one of my least favorite bits of the expansion, I emptied my bad by equipping all the much better gear I had stored away and selling off everything else.

I remembered that problem once I got out in the field.

It isn’t the worst thing in the world, this mobs “grow more powerful than you do as your item level goes up” thing.  But I had just come from playing a guardian in LOTRO, a class that doesn’t kill all that quickly, but which can handle a lot of mobs at once.  Running into the thick of things was easy with the guardian, but a big mistake with the ret pally.  One or two mobs were doable, and even three, but after a three mob encounter some healing was required.  I had to die a couple of times before I got a grip on how much less powerful I was at level 120 in WoW versus level 50 in LOTRO.

And then there was the game itself.  I played for a couple of long stretched on Saturday and Sunday, and several times I ended up with the game lagging out or the UI going unresponsive.  I am very much not used to hitting a hot key and the game not catching it.  This seemed to be a particular problem on Saturday evening.  That is a busy time for the game, and maybe that had something to do with it as I haven’t seen anything similar since the weekend.  But for a stretch WoW was not acting in a very WoW-like manner, but no other games seemed to be lagging.

Despite the less than auspicious start, I pressed on.  I wanted to pick up where I had left off back in early November in Drustvar.  I had one more faction to work on before I would unlock world quests.

But even that seemed to be going against me.  All I wanted was to get to honored with the Order of Embers.  The problem was that the zone opens up with a lot of quests, none of which boost you at all with that particular faction.  That, and the coming of the LOTRO Legendary server, put me off WoW for this three month stretch, and in returning I found myself in the same situation.

I persisted though.  The quest lines are, as I have noted, pretty good.  The zones are all pretty well put together and look good as well.  I managed to find my stride and started to just enjoy following up on one task after another.  Eventually I hit quest chains that catered to my particular factional needs, but that didn’t happen until I really got into the far side of the zone.  By that point I didn’t have to go very far before I got the exploration achievement.

Also, the best exploration mount ever

It wasn’t too far after that when I managed to hit my faction goal as well.  That sent me back to Boralus to turn in the quest that unlocked World Quests as a reward.

World Quests

In a way, that might seem like a step backwards.  I earned enough faction to unlock the ability to earn more faction related quests.  But I have to admit I kind of liked the world quest stage of Legion back in the day.  Doing the daily three or four quests for the emissary ended up being a nice little chunk of content to keep me going.

Also, along the way, I seemed to be climbing out of the item level pit.  Or I am getting better at playing a ret pally in BfA.  Either way, I seemed to be doing better.

I still have to finish up the story lines in Drustvar.  There is an achievement to be done in that.  And I seem to be back in the groove again.  But for a strange day or three it seemed like WoW was losing the playability battle against LOTRO.

Winter Movie League – Hog-whimperingly Silly

 There’s a hog–whimperingly silly performance from Helen Mirren…

-The Guardian, Winchester Review

Week ten of our Winter Fantasy Movie League has come and gone with low numbers due to the Super Bowl and no big new films arriving on the big screen.

Sure, there was Winchester, which featured Dame Helen Mirren.  But when a film causes our English cousins to abuse the English language to describe it, one cannot expect it to be a break out in the box office.  And yet, there it was at the top of the price list, an indication that somebody, somewhere felt it was going to carry the week at number one.

Winchester           $274
Jumanji              $261
The Maze Runner      $230 
The Greatest Showman $167
The Post             $126
The Shape of Water   $114
Hostiles             $113
Den of Thieves       $90
12 Strong            $89
Paddington 2         $75
Three Billboards     $71
I, Tonya             $61
Phantom Thread       $56
Star Wars            $46
Forever My Girl      $45

However even at the optimist end of the scale of forecasts it wasn’t going to be dominant, and as the week wore on enthusiasm sagged.  Even the Thursday night preview count, which wasn’t that bad really, failed to carry it forward and it ended up in third place overall for the weekend box office, failing to cross the $10 million mark.

But back at the early end of the week I based my first lineup around it, less because I thought the movie was going to be stellar than because I chronically underestimate the attraction of the horror genre.  My FML picks over time show a disdain for such films and, after having been burned enough time on that front, I decided to start with Winchester as an anchor and work from there.

However, once I found out there was an embargo on reviews… The Guardian published the review I quoted at the top, then had to remove it citing said press embargo… I left Winchester behind and never looked back.  Stopping the press from writing about a movie is tantamount to declaring it bad yourself, a generally futile effort to contain negative buzz.

With that out of the way the toss up for anchor was between Jumanji and The Maze Runner.  The general expectation was that The Maze Runner would hold first for another week, if only by a small margin, and since it was the cheapest of the pair, I ran with that.

I decided to go with three screens of that and then fill in from the lower end of the picks.  Star Wars was tempting, seemingly priced low enough to maybe take the best performer slot, but it hasn’t sustained as well as its big opening might make one think it should.  So I filled up five screens with I, Tonya as it was getting a boost in theater count and it was a film I wanted to see.  That left my pick looking like this:

My Winter Week Ten Picks

As it turned out my thoughts on anchor weren’t bad.  While Jumanji eked out a win in the box office, The Maze Runner’s lower price allowed better additional picks.  However, the best performer was higher up the price list.  12 Strong took that honor, the perfect pick for the week being two screens of The Maze Runner and six screens of 12 Strong.

Winter Week Ten Perfect Pick

217 players managed to get the perfect pick, none of them in the Meta League however.  And, compared to previous weeks, the payout for perfect was somewhat paltry.

In the Meta League the only one who was at all big on 12 Strong was SynCaine, so he won the week.

1. SynCaine’s Dark Room of Delights (T) – $52,944,678
2. Ben’s X-Wing Express (M) – $48,256,768
3. Vigo Grimborne’s Medieval Screening Complex (T) – $48,256,768
4. Elly’s Elemental E-Plex (M) – $48,256,768
5. Dr Liore’s Evil House of Pancakes (M) – $48,256,768
6. Kraut Screens (T) – $47,571,678
7. Corr’s Carefully Curated Cineplex (M) – $45,995,775
8. Paks’ Pancakes & Pics (T) – $45,803,359
9. I HAS BAD TASTE (T) – $45,693,465
10. Biyondios! Kabuki & Cinema (T) – $45,675,426
11. Dan’s Decadent Decaplex (M) – $45,492,946
12. Wilhelm’s Broken Isles Bijou (T/M) – $43,773,305
13. The Filthy Fleapit (T) – $42,379,780
14. Aure’s Astonishingly Amateur Amphitheatre (M) – $40,975,374
15. Logan’s Luxurious Thaumatrope (M) – $38,835,284
16. Darren’s Unwatched Cineplex (T) – $38,835,284
17. Joanie’s Joint (T) – $37,840,701
18. Po Huit’s Sweet Movie Suite (T) – $36,028,912

The Meta League Legend:

• TAGN Movie Obsession – players from it marked with a (T)
• MCats Multiplex – players from it marked with an (M)

The most popular pick was two screens of The Maze Runner and six screens of Den of Thieves which four people in the Meta League ran with.  That was good enough for a solid second place, but not enough to change the lineup drastically.

That left the overall Meta League score looking like this:

1. Ben’s X-Wing Express (M) – $1,054,607,749
2. Corr’s Carefully Curated Cineplex (M) – $1,042,111,870
3. Wilhelm’s Broken Isles Bijou (T/M) – $989,077,089
4. Biyondios! Kabuki & Cinema (T) – $980,713,608
5. Aure’s Astonishingly Amateur Amphitheatre (M) – $970,593,928
6. Paks’ Pancakes & Pics (T) – $959,610,849
7. Dan’s Decadent Decaplex (M) – $934,123,618
8. Po Huit’s Sweet Movie Suite (T) – $898,816,041
9. Darren’s Unwatched Cineplex (T) – $881,876,289
10. SynCaine’s Dark Room of Delights (T) – $876,407,166
11. Vigo Grimborne’s Medieval Screening Complex (T) – $832,589,617
12. Kraut Screens (T) – $799,184,518
13. I HAS BAD TASTE (T) – $798,620,115
14. The Filthy Fleapit (T) – $784,544,842
15. Dr Liore’s Evil House of Pancakes (M) – $783,670,549
16. Elly’s Elemental E-Plex (M) – $778,691,435
17. Logan’s Luxurious Thaumatrope (M) – $777,995,235
18. Joanie’s Joint (T) – $767,559,428

There was a little bit of shifting positions in the back half of the pack and Liore continued her climb up from last place in the pack, but at the top end Ben extended his lead over Corr by a couple million while the race for third place seems yet up in the air.

Now there are only three weeks left in the season, but with the Super Bowl behind us and a couple of big releases headed our way there is still the possibility of a shake-up in the ranks.  Week eleven offers the following choices:

Fifty Shades Freed    $556
Peter Rabbit          $276
The 15:17 to Paris    $221
Jumanji               $126
The Greatest Showman  $101
The Maze Runner       $83
Winchester            $66
The Shape of Water    $51
The Post              $50
Hostiles              $46
12 Strong             $43 
Den of Thieves        $40
Three Billboards      $35
I, Tonya              $30
Darkest Hour          $29

For week eleven Star Wars, Paddington 2, Phantom Thread, and Forever My Girl dropped from the list.

Replacing those are three new films, Fifty Shades Freed, Peter Rabbit, and The 15:17 to Paris along with Darkest Hour returning to the list, likely due to an expansion of theaters showing it.

The big release is Fifty Shades Freed, the final film in the trilogy that started off as Twilight fan fic if I recall right.  It will no doubt top the box office, but will it be worth double the next film in line, Peter Rabbit?  I’d hazard a guess that those films serve different demographics, while Clint Eastwood’s The 15:17 to Paris caters to a third.

Meanwhile Jumanji is still in play… why not 7x Jumanji and a screen of the also surprisingly persistent The Greatest Showman as a pick… and mixing and matching the new comers with some of the low priced options seems viable as well.

CCP Updates Their RSS News Feeds

As I mentioned… okay, bitched about… in Monday’s post, the coming of the new EVE Online community site disconnected the news updates from the old RSS feeds.  The feeds were still there, but no new items were being added after the change over.

RSS logo for an RSS post

CCP Avalon, responding to the grousing of the few of us who actually use RSS and a feed reader (or who populate web sites like Total EVE or the side bar of my own EVE Online Pictures via these feeds), sent out an update over Twitter earlier today with a new set of feeds for EVE Online news.

Since WordPress seems to want to mangle that Tweet due to URLs, the new feeds are as follows:

• EVE News – https://www.eveonline.com/rss/news
• EVE Dev Blogs – https://www.eveonline.com/rss/dev-blogs
• EVE Patch Notes – https://www.eveonline.com/rss/patch-notes

There are also JSON flavored versions of the feeds, if that is your thing.

• EVE News JSON – https://www.eveonline.com/rss/json/news
• EVE Dev Blogs JSON – https://www.eveonline.com/rss/json/dev-blogs
• EVE Patch Notes JSON – https://www.eveonline.com/rss/json/patch-notes

The feeds are up and live and populated with current and past items, so it wasn’t even a hard before/after cut over but a smooth transition.

So all is good in that little corner of the world again.  The side bar on my other blog has been updated and once I update Feedly those items should be showing up in the Gaming Company News feed at the bottom of the side bar here as well.

Social media is fine and dandy, but RSS is where you go when you want reliability.

Kickstarter MMO Metaphor

There were too many of us, we had access to too much equipment, too much money, and little by little we went insane.

Francis Ford Coppola, not at all describing Star Citizen

There is, even as I write this, a Kickstarer campaign running for a video game based on the movie Apocalypse Now.

I have no real opinion when it comes to the game itself.  It might be the best game ever or allow one unique depth and perspective into the movie.  It might be all they promise and more.  I just know that it looks pretty sure that the campaign is not going to make its $900,000 funding goal.

Wilhelm’s Rule of Kickstarter campaigns is that if you don’t make 20% of your funding goal in the first 24 hours, you might as well go home.  You haven’t rallied your base or given enough notice or come up with the right pitch or simply just don’t have the draw to get there.

The campaign sits at 18% and is at day 14 of 30.  The prospects look grim.  They even have a backer in at the $10,000 mark, but not nearly enough backers in at the sane funding levels.

I didn’t even hear about the title through the gaming news media.  I stumbled on it by mistake on the Kickstarter site, and I was only there because I saw Bob Cringley had time to do another post on his blog so was wondering if he might have also found time to update people on when the hell their Mineservers might be showing up.

Still, when I found the campaign I had to laugh.

I wasn’t laughing at the campaign or what it was trying to accomplish.  Like I said, the intent there might be pure.

Rather, I was laughing at what a perfect metaphor the movie was for the big ticket, grandiose plans, uncontrolled feature creeping, perennially behind schedule, and always over budget crowdfunded MMORPG market.

And lets face it, the grand champion poster child for all of that is Star Citizen. You could make this it several others, but Star Citizen is the big fish, so let’s just go straight for the jugular on that one.

Every Star Citizen fan boy about to tell me Chris Roberts is a great man…

How can you have this thought… this mixing of media minds… and not put Chris Roberts up there in the role of Colonel Kurtz?  Surrounded by loyal followers who continue to give him money to driving a project that seems to have gone beyond being a viable venture.

I suppose if he could keep his posts a little more terse I might have to cast Derek Smart as Captain Willard.

They told me that you had gone totally insane, and that your methods were unsound.

-Capt. Willard, on meeting Col. Kurtz

That is a fun mental image to play with, but it is too much.  The movie is too large, too dramatic, too bloody, too wrought with peril to really be a metaphor for Star Citizen.  The real metaphor requires you to pull back a level, to consider the making of Apocalypse Now.

There is a great documentary about the making of the movie, Hearts of Darkness.  It illustrates the parallel between the theme of the movie and the reality of making the movie, with Coppola himself taking on the Kurtzian role, out in the jungle, making a movie that nearly grew beyond his ability to shape.

I can picture Chris Roberts in that situation as well.  He had a vision, but the scope may well have grown beyond his ability to shape and bring to fruition.  Some of the problem is letting things grow because the wider scope is what he really wants.  But not every problem is of his making.  Coppola in the jungle face expensive problems with sets, actors unprepared (Brando) or ill (Sheen had a heart attack) and a range of studio execs back in the states wondering what he was doing with all the money and reminding him that he was past his deadline.

For Chris Roberts you can substitute in technology not up to his vision, the need to build some things from scratch, the need to change engines, and of course a whole range of people wondering what he is doing with the money and pointing out that the promised November 2014 ship date disappeared in the rear view mirror quite a ways back.

Coppola got an enduring classic for all his problems, explosions, and a million feet of film.  We are still waiting to see what Chris Roberts will deliver.

And the irony is that the game that inspired this metaphor in my head, it isn’t going anywhere if it is depending on its crowdfunding run.  But it has been a down time for video game crowdfunding, so they might have to go back to more traditional methods.