Activision's quarterly earnings call, which took place back on May 5, was expected to yield impressive results. However, the impact of the free-to-play Warzone saw the company's revenue leap to dizzying heights.
Call of Duty is always one of Activision's highest-earning games every year, regularly topping sales charts in the USA and Europe. Modern Warfare, for example, is the series' all-time best-selling title in the first quarter of any year.
While they've been criticized in the past for the volume of microtransactions and prices for DLC, Activision's most recent investors' call shed some light on the insane revenue the company is generating.
The March 10 release of Warzone marked a shift in strategy for Activision. While annual releases have been a staple of Call of Duty, they have confirmed that Warzone will act as a 'thread' between different CoD titles. This means new battle royales in subsequent CoD games are less likely.
Warzone boosts Activision revenue
Despite being free-to-play, it looks like Warzone's immense popularity has boosted Activision's already monumental revenue. While predictions for the company's Q1 revenue were at a whopping $1.32 billion, Activision announced that their total revenue came in at $1.52 billion. This is over $200 million greater than analyst predictions.
One analyst has said that these earnings "completely obliterated Wall Street's highest expectations" for Activision. The company's earnings-per-share was double what analysts had predicted, at $0.76.
Warzone is free to play and set to stay that way, but players can purchase in-game skins and cosmetics. Players are encouraged to upgrade to the full Modern Warfare game, and Activision confirmed more players than expected did this.
Activision President says the amount of players who got Warzone and then upgraded to Modern Warfare was “higher” than they predicted it would be.
— Call of Duty News (@charlieINTEL) May 5, 2020
Finally, the ongoing global situation has been cited as a reason for Activision's incredible revenue, as more players are forced inside and encouraged to partake in socially distant activities. The March 10 release of Warzone allowed Activision to perfectly capitalize on the changes of behavior many people have been forced into.
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The impressive first quarter has seen Activision increase their annual revenue estimates up to $6.9 billion. This would be an increase of 8% on the company's 2019 revenue.