Activision Blizzard is responsible for a sizable slice of the global video game market, estimated at $195.65 billion in 2021, and it’s expected to reach $220.79 billion in 2022. The company earned $1.64 billion in revenue during Q2 2022, which is down year over year from $2.29 billion in Q2 2021.
Activision Blizzard CEO Bobby Kotick stated, “We expect to continue to deliver ongoing content for our various franchises.” In addition, he shared that the company would continue “to invest in opportunities that [the company] believes have the potential to drive our growth over the long term.” According to Kotick, that involves building on the video game company’s advertising initiatives and further investments in its mobile titles, such as Candy Crush Saga.
That’s innovative business for the video game holding company that earned a total of $831 million from its mobile and ancillary branch. The Q2 report noted that Activision Blizzard’s mobile and ancillary business “primarily includes revenues from mobile devices.” PC gaming sales totaled $332 million. Console sales earned the Santa Monica, California-based company $376 million.
Recession Concerns on the Rise
Central banks are responsible for economic and monetary policy as well as the soundness of the financial system. Currently, central banks worldwide are raising interest rates to counteract rising inflation in an effort to slow borrowing and push down consumer prices.
While this can mean significant issues for many industries, it’s interesting to note that during the 2008 recession, the video game industry earned a reputation for being “recession-proof,” as it continued to sell millions of games and gaming consoles even as the housing market collapsed and banks went out of business.
However, “This time, it’s much more uncertain,” Cassia Curran, founder of games business consulting firm Curran Games Agency, told The Washington Post. “Employment is remaining high, and demand for outdoor entertainment is jumping after two years of the pandemic, and game sales in the last quarter finally saw a slight decline after the pandemic-driven couple of bumper years.”
During a recession, consumers cut discretionary spending, which includes electronics and video games. But free-to-play games, like Blizzard’s Overwatch 2, can keep gamers occupied for hours, which can still spell big business for companies including Activision Blizzard, Sony, and Nintendo.
“The constraints are real. Inflation is definitely all around us. I always go back to the point that in an uncertain time, in an inflationary time, the software is the deflationary force,” Microsoft CEO Satya Nadella told Bloomberg. He added that Microsoft is “ensuring that our customers are able to do more with less. So, in terms of outlook, I am optimistic about Microsoft’s value proposition. I’m optimistic about our share, but we are not immune from anything that is a macroeconomic headwind.”
Activision Blizzard CEO Talks Free-To-Play Games and the Pandemic
Activision CEO Bobby Kotick said, “Where you have high levels of unemployment and economic uncertainty, having free games on phones is going to probably be a big way to grow the audience.”
In the course of the 2020 COVID-19 pandemic lockdowns, Kotick tweeted, “During these challenging times, I’m proud of the role that King Games [which is owned by Activision Blizzard] is playing to bring joy to our hundreds of millions of players around the world.” According to the video game company, “Mobile games like Candy Crush Saga have played a crucial role in safely connecting communities worldwide in the midst of COVID-19 while providing epic entertainment.”
The free-to-play candy-colored tile-matching game is a billion-dollar business for the Call of Duty publisher. In 2021, the game’s revenue increased to $1.21 billion, compared to $1.19 billion in 2020.
“I would say that there were probably some benefits that came with people being at home and trying to find ways to entertain themselves. But I think our success [throughout the pandemic] resulted from strategy changes over the last few years and then good execution,” Kotick said.
He explained that “finding ways to have creative collaboration when you’re not physically present” was a major challenge for Activision Blizzard throughout the pandemic. “We had very inventive teams that did their best to figure out how to engage with each other over Zoom. [And] for us, the most important thing was [creating] a work environment where people who are creative and inspired are going to be able to collaborate with each other.”