A number of companies are reporting their financial results for the recent quarter around this time, with many investors paying close attention to how these results turn out. While many industries have been devastated due to this pandemic, others, such as gaming, seem to have profited from this situation. Not surprisingly, one of the top gaming companies in the world, Activision Blizzard (NASDAQ:ATVI) showed up today after the company reported better than expected financial results.
It’s not really much of a surprise considering that people in quarantine now need other things to do. While companies like Netflix have seen a surge in traffic, so too have most gaming outlets and platforms. Activision Blizzard reported that revenue from live services had exceeded expectations, with the company’s profit more than doubling in what was the best first-quarter profit figure in Blizzard’s history.
It also helps that due to the largely digital nature of developing content for video games, production has continued for the most part as developers simply work at home instead. “The digital nature of our content means our creative talent can continue to work on our product pipeline from home. While the shift to remote working adds complexity and challenges in some areas of the game development process, we are implementing mitigation measures to address these areas and, based on the work to date, we still expect to deliver a robust slate of content over the remainder of the year,” stated the company in an official press release.
Nor is Activision Blizzard the only gaming company that has seen a dramatic increase in profits. Another rival, Electronic Arts, has stated that it predicts its quarterly profits would more than triple from last year. Considering the fact that March was one of the biggest months in videogame history, with over $10 billion worth of games being sold during the month, it’s not surprising that gaming companies are enjoying record profits.
The real question going forward is how long this will last. Considering that many countries and companies are expecting people to resume working normally sometime this summer, it seems like that this uptick in gaming profits will be a one-time thing more than anything else.
Shares of Activision Blizzard were up 2.8% over the day before umping another 4.9% in after-hours trading following the news. Over the past few months, Activision has been one of the few companies out there that haven’t been all that hit by the coronavirus pandemic. While shares ended up dipping a bit in March, they’ve more than recovered over the past couple of months.
Activision Blizzard Company Profile
Activision Blizzard was formed in 2008 by the merger of Activision, one of the largest console video game publishers, and Blizzard, one of largest PC video game publishers. The combined firm remains one of the world’s largest video game publishers. Activision’s impressive franchise portfolio includes World of Warcraft, which boasts more than $8 billion of lifetime sales, and Call of Duty, which has sold over 175 million copies across 14 titles over 12 years. – Warrior Trading News