- Beats on earnings and revenues in fourth quarter

- Microsoft takeover could be blocked by UK regulators

- Activision guides for double-digit growth in 2023

Gaming company Activision Blizzard (ATVI:NASDAQ) shot the lights out in the fourth quarter, beating consensus revenue and earnings estimates, but there were also warnings in the update.

The $56 billion company reported Q4 earnings per share of $1.87 on $3.57 billion revenue. That was significantly above analyst estimates, pitched at $1.51 and $3.19 billion respectively. ‘We ended 2022 with record quarterly net bookings as we delivered on our mission to bring epic joy to players,’ the company said.

Shares in the company rose more than 2.5% in pre-market trading ahead of Wall Street’s reopening later today, hitting $73.47. This follows a sharp fall for the stock in recent days as speculation spread that Activision’s rough $69 billion takeover by Microsoft (MSFT:NASDAQ) could be blocked by UK regulators.

Watchdogs across the US, EU and in the UK have all raised concerns over potential antitrust practices from a Microsoft buyout, worries echoed by several rival game makers, most notably Japan’s Sony (6758:TYO), making the deal hugely complex and challenging to wrap up.

For the time being, Activision continues to talk like the merger will go ahead, saying the partnership would ‘enable us to better serve our players, create greater opportunities for our employees, and allow us to succeed in an increasingly competitive global gaming industry.’

The online and PC gaming markets have been growing rapidly for years, drawing interest from multiple directions, including TV and movies streaming giant Netflix (NFLX:NASDAQ). Market analysis projects the global gaming industry to hit around $365 billion this year (2023), based on Statista data, and push beyond $480 billion by 2027.

Microsoft already has an extensive offer through its connected Xbox consoles, and that’s part of the problem for regulators - would a Microsoft/Activision tie-up strangle healthy competition?

Activision’s Call of Duty franchise is among the world’s most popular with gamers and it continues to grow. Call of Duty: Modern Warfare II had the highest opening-quarter sell-through in franchise history, according to the company. Hours played for the title were the highest in franchise history for a premium title at this stage of release.

Bookings for Call of Duty Mobile were up by double-digits in the fourth quarter.

The company also owns popular franchises including Overwatch, Diablo and Warcraft.


Activision Blizzard is guiding for high-teens year-on-year growth in revenue and high-single digit growth year-on-year for net bookings for 2023. In the first quarter, the company sees revenue hitting growth in the high teens.

‘Our robust product pipeline, live game opportunity, and ongoing focus on operational discipline create a foundation for strong financial performance in 2023,’ the company said.

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Issue Date: 07 Feb 2023