Call of Duty is Activision’s Big Bet after Disappointing Earnings

Activision Blizzard appears to be struggling these days, as revenue and earnings fell compared to the same quarter last year.

Let’s take a look at the headline numbers, and see what those metrics can tell us about Activision stock today and in the future. Management commentary on some of the details may help us understand the struggles facing the company.

Revenues and Earnings Get Clocked

In the second quarter, Activision revenues were actually down about 15 percent, to $1.4 billion, as compared with $1.64 billion last year.

Net income came in at $0.53 per share, or $774 million, down from $0.62, or $902 million, for the same quarter last year.

Operating cash flow was strong at $154 million, bringing the total for the trailing twelve-month period to a very impressive $1.86 billion.

So what exactly do these numbers mean for Activision?

Activision Relies Mostly On Candy Crush

The first thing we have to look at is net bookings. The company defines this as net amount of products and services sold digitally or sold-in physically in the period.

Those bookings fell by almost 12 percent, to $1.21 billion, compared with $1.38 billion for the same quarter of 2018. As this point, most bookings are digital (about 80 percent), coming in at $1.01 billion, down from $1.20 billion last year.

The good news is that Activision management is kind enough to break out just how many monthly active users it has for each of its major games.

In total, Activision had 327 million Monthly Active Users in the quarter.

King, a subsidiary of Activision that is known for its” Candy Crush” franchise, and the lion’s share of monthly active users, with 258 million.

Call of Duty: Black Ops 4” had 37 million, which…

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