Sekiro helps Activision Blizzard to better-than-expected Q1

Publisher says results represent “a solid start to the year”

Activision Blizzard beat its earnings expectations for the first quarter of 2019 in what the publisher called a “solid start to the year”.

Net revenue for the quarter ended March 31 was $1.8 billion, which is higher than the publisher’s prior outlook of $1.7 billion, but a decline from the $1.96 billion it earned during the same period last year.

Net income for the quarter was $447 million, down from $500 million a year earlier.

The company said key contributors to the performance were Call of Duty in-game and catalogue sales, esports and the successful launch of Sekiro: Shadows Die Twice, which sold two million copies in less than 10 days.

Despite announcing record revenues of $7.5 billion for the year ended Dec 31, 2018, Activision said in February it would be reducing its headcount by 8% in 2019, representing approximately 800 job losses, mainly consisting of “support staff”.

At the time, CEO Bobby Kotick said the company would be hiring more developers in 2019, with a 20% increase in developer resources overall, in order to invest more heavily in its core franchises.

The company would be investing more in live services, Battle.net and esports, the executive said.

In its Q1 2019 results, Kotick said the company was “continuing to enhance our leadership position in esports”.

He said: “The second season of the Overwatch League has seen strong growth in viewership, and we’re seeing enthusiastic demand for our professional, city-based Call of Duty league franchises.”

Activision has sold the first five Call of Duty esports teams in Atlanta, Dallas, New York, Paris and Toronto, Kotick said, to owners “who recognise the scale of the opportunity from their partnerships with us on the Overwatch League”.

Since the layoff announcement in February, Activision Blizzard has made progress in its plan to increase development resources for its biggest, internally-owned franchises, the firm claimed, and it expects the work underway “to bear fruit in the future”.

In Q2 Activision Blizzard will continue to support Call of Duty with in-game content, the company said, alongside the release of Crash Team Racing Nitro-Fuelled in June and new Hearthstone content.