Activision Blizzard halted slide in World of Warcraft subscribers
Activision Blizzard Inc. said Wednesday it was able to halt a precipitous slide in the number of subscribers to its massively profitable online game, World of Warcraft, maintaining the number at 10.2 million as of March 31 -- roughly the same as it was on Dec. 31.
The game, developed by Blizzard Entertainment in Irvine, had been steadily losing players since it peaked at 12 million in September 2010. The fact that World of Warcraft, now approaching its eighth year, was able to hold its ground was no small feat, given the stiff competition it faced from the December release of rival online title, Star Wars: The Old Republic.
Activision disclosed World of Warcraft subscriber numbers as part of its first-quarter earnings report. The Santa Monica games company posted $1.17 billion in revenue for the quarter ended March 31, a 19% decline from a year earlier. Net income of $384 million, or 33 cents a share, was also down from $503 million, or 42 cents a share a year earlier.
Still, the results, when adjusted for special charges and deferred income, handily beat Wall Street's expectations. Among the titles that bolstered Activision's performance was Skylanders, a hugely popular kids' game that ties into a suite of collectible physical toys. Many stores have reported temporary shortages of Skylanders action figures as Activision struggles to keep up with demand. Activision said it has sold more than 30 million Skylanders toys as of Mrach 31.
Other titles that contributed to Activision's results include its Call of Duty military shooter franchise, which continues to sell well and has garnered more than 2 million players who pay about $50 a year for access to additional online content.
While the company is surfing a wave of bona fide hits, analysts point out that Activision has yet to make a major dent in the growing market for tablet, mobile and social games.
“While Activision to date has chosen the best path to weather the console storms, they are potentially at risk of missing a large and profitable segment of the market without more investment in social and mobile,” said Colin Sebastian, analyst with Robert W. Baird & Co. “When tablets become a core gamer platform, will Call of Duty be there?”
-- Alex Pham
Photo: Skylanders products courtesy of Activision Blizzard Inc.