Activision Blizzard to report earnings as gaming industry hits post-COVID crisis

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Creator of “Call of Duty” Activision Blizzard (ATVI) released its second quarter results after the closing bell on Monday, beating analysts’ expectations for revenue but fell short of bottom line as the industry faces a downturn from its pandemic-era highs.

Here are the most important numbers from the announcement compared to what Wall Street expected from the gaming giant, as compiled by Bloomberg.

Activision Blizzard shares were largely flat after the report.

While Activision Blizzard beat analyst expectations, bookings were down more than 14% year over year. “Reservations” measures overall revenue, but subtracts deferred sales from certain online purchases.

The gaming industry is suffering a serious hangover from its explosive growth during the pandemic. Microsoft (MSFT) and Sony (SONY) reported slowdowns in software sales and user engagement during their latest earnings.

Microsoft, which does not detail revenue from its Xbox products, said service revenue fell 6% year-over-year. Sony, for its part, reported a 13% year-over-year decline in software revenue. Unit sales, meanwhile, fell 26% year-over-year.

In June of this year, according to NPD, spending on gaming hardware, content and accessories fell 11% year-on-year to $4.3 billion.

But Activision Blizzard has a huge lineup of titles coming, including a new “Call of Duty,” a new free-to-play “Call of Duty: Warzone,” and more.

Additionally, despite many tech companies announcing slowdowns and hiring freezes, Activision Blizzard CEO Bobby Kotick said the gaming company has increased its workforce.

“Even in a tough economic environment, with so many companies announcing hiring freezes and layoffs, our development headcount was up 25% year-over-year at the end of the second quarter.”

The video game industry is dealing with hangovers from the heights it has experienced during the pandemic. (AP Photo/Jae C. Hong, File)

Microsoft is also waiting to hear if its planned acquisition of Activision Blizzard can go ahead. While Microsoft said it was confident the $68.7 billion deal would close by the end of fiscal year 2023, the Federal Trade Commission is still investigating the purchase.

Global regulators are also reviewing the acquisition. On July 6, the The UK Competition and Markets Authority has announced that he launched an investigation into the move. The authority is expected to announce its findings on September 1.

If the deal goes through, Microsoft would have access to Activision Blizzard’s huge library of games, including “Call of Duty” and “World of Warcraft.” Microsoft, meanwhile, assured fans that if regulators approved the acquisition, “Call of Duty” would still be available on Sony’s consoles.

Activision Blizzard has faced the fallout of explosive allegations that it, and Kotick, fostered an environment like a brotherhood atmosphere plagued by sexual harassment and gender discrimination.

In March, the the company paid $18 million to settle a lawsuit filed by the US Equal Employment Opportunity Commission related to the allegations. The California Department of Fair Employment and Housing has also filed a lawsuit against the gaming company, although that case is still pending.

In a statement to Yahoo Finance, an Activision Blizzard spokesperson said: “Our priority is and always will be to have the best place to work for our employees. The DFEH filed its allegations without completing its investigation and does not failed to follow its own investigation and conciliation requirements. It was accused by the EEOC and others of unethical conduct. No court has ever found the DFEH’s allegations to be true.

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