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How are things shaping up for Activision Blizzard (ATVI) going into 2021?

Activision expects net revenues of $2 billion for the fourth quarter of 2020 and $7.7 billion for the full year

Activision Blizzard Inc. (NASDAQ: ATVI) benefited from the surge in gaming trends seen this year as people spent more time playing video games during the lockdown period brought on by the COVID-19 pandemic. The company has seen strong performance this year and the outlook ahead looks bright as well. The stock has gained 44% since the beginning of the year.

Strong fundamentals

For the first three quarters of this year, Activision Blizzard has seen consistent growth in revenues and profits. For the third quarter of 2020, revenues increased 52% year-over-year to $1.95 billion, exceeding the company’s outlook of $1.80 billion. Adjusted EPS jumped 131% to $0.88 from the year-ago period.

Monthly active users (MAUs) and net bookings saw growth on a year-over-year basis for the third quarter but fluctuated sequentially for the first three quarters of the year. These two metrics saw a peak during the second quarter of 2020 rising meaningfully from the first quarter but then tapered off going into the third quarter. For Q3, net bookings were $1.77 billion while MAUs totaled 390 million.

Favorite franchises

Activision’s growth is driven by three of its main franchises across its segments – Call of Duty, World of Warcraft and Candy Crush. These three franchises accounted for 67% of the company’s net revenue for 2019. During Q3, MAUs tripled for Call of Duty: Modern Warfare compared to the prior title in the year-ago quarter with strong growth in console and PC MAUs. Call of Duty console and PC in-game net bookings were up four times versus the year-ago level.

For World of Warcraft, Activision saw high levels of engagement during the third quarter as the subscriber base doubled from last year. Its latest expansion Shadowlands saw sales of over 3.7 million units globally on the first day of its launch, becoming the fastest-selling PC game of all time.

Candy Crush also saw its MAUs grow year-over-year along with growth from in-app purchases and advertising.


Mobile games are becoming extremely popular and Activision is well-positioned to benefit from this trend. Candy Crush is one of the all-time favorite games played on mobile while Call of Duty has also seen strong growth on this platform. The expansion to mobile has helped drive user growth for Call of Duty and the company continues to see opportunities to broaden reach and engagement.


Activision expects net revenues of $2 billion for the fourth quarter of 2020 and $7.7 billion for the full year. Net bookings are expected to be $2.73 billion for Q4 and $8.10 billion for FY2020.

In general, the esports market worldwide is expected to reach $2.40 billion by 2024, driven by growth in internet users and penetration, increasing digitalization and an increase in smartphone users, according to a report by Research and Markets. The global esports audience is projected to reach 888 million by 2024.

These trends combined with its strong performance thus far bode well for Activision Blizzard and the company appears well-positioned to drive growth going into 2021.

Click here to read the full transcript of Activision Blizzard Q3 2020 earnings conference call

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