Giant publisher and parent company supreme “Activision Blizzard” has just released its third quarter earnings. Amidst the backdrop of global economic depression it seems the gaming industry is going from strength to strength. Riding the very peak of the wave is Activision Blizzard. It posted net revenue of over $1.9b for the three month period. This is up over $150m on their prior forecast, and just under $700m up on the same period in 2019.
Unsurprisingly, perhaps, micro-transactions have helped drive this phenomenal revenue growth. Of course this was only bolstered by a collective COVID related agoraphobia keeping gamers glued to their screens. A massive $1.2b came from arguably the industry’s most divisive monetisation mechanism. Self-labelled by Activision Blizzard as “in game net-bookings”, they are micro-transactions to all and sundry. This represents a massive 69% increase year on year, or roughly $500m more compared to last year.
“In game net-bookings” make up almost 70% of Blizzard Activision quarterly earnings
In the statement to shareholders, Activision Blizzard call out sales from Modern Warfare and of course Warzone. But they also pay homage to Call of Duty Mobile, stating that the mobile game was,
“…the highest grossing new game in US app stores since its launch last October and is now in final large-scale testing in China, where over 50 million players have pre-registered to date.”
Micro-transactions from the call of duty franchise were cited as four times higher than the same period the previous year.
World of Warcraft too played its part, with the publisher citing pre-sales of Shadowlands dwarfing all prior expectations. Hearthstone too grew,
“year-over-year in the third quarter, with the Battlegrounds mode seeing sustained strong engagement since its release last November”.
Finally, King, and its smorgasbord of mobile games played a crucial part, with Candy Crush “once again the top grossing franchise in the U.S. app stores”.
Let the Punishment Fit the Crime
So what can we make of all of this? Quite frankly, the opulence of micro-transactions paints a bleak picture for the future of gaming. It’s true that barely a week passes without one publisher or another making headlines for yet another law suite baring its fangs. The world at large seems unconvinced that micro-transactions, and in particular loot boxes are nothing short of the devil’s work.
Why change? Expect more of the same from Activision Blizzard in the coming months
The trouble is, the fines that Activision Blizzard face across their many legal battles are inconsequential given the astronomic economic benefit they present. Take, for example, the resent fine imposed by the Dutch authorities for loot boxes in FIFA. EA face a total fine of 10m EUR unless they remove all trace of its insidious practices within the football franchise. Yet, a similar fine for Activision Blizzard would represent just 0.5% of its total earnings, and that’s just for one quarter.
It seems, then, that the punishment does not fit the crime. There just isn’t enough disincentive for these giants of commerce to consider changing their ways. The court of public opinion may have passed sentence long ago on micro-transactions. But as the saying goes, money talks, and people are voting with their wallets. Either the fines these companies face increase, or “legal expenses” will simply become another inconsequential line on an otherwise glistening P&L.