Activision-Blizzard revels in Destiny and Hearthstone’s earning potential

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Activision-Blizzard is a unique kind of game company. They don’t actually release that many games each year, opting instead to focus on a few core franchises (or “pillars”) yielding profitable games each year. While it’s a big gamble to take, it keeps on paying off. This year’s big winners? Destiny and Hearthstone.

I wish financial statements could be a bit clearer than they like to make them at these meetings. There’s a lot of talk about non-GAAP earnings instead of the GAAP earnings. GAAP stands for “generally accepted accounting principles” and ensure that creative accounting isn’t used to fiddle with the numbers. Still, even going purely by the GAAP numbers, Acti-Blizz had an awesome 2014.

Based on their latest financials, 2014 (GAAP) net revenue was $4.41 billion, down from $4.58 billion. Additionally, the company generated an operating cash flow of $1.3 billion. Most interestingly, 2014 was a record year for digital with 46% of total net revenue coming from digital sales, reaching $2.20 billion. That’s a lot of DLC and Hearthstone cards. CEO Bobby Kotick raved:

2014 was another successful year as we achieved record results and introduced new franchises with outstanding gameplay, expanded on exciting new business models and continued investing in some of the world’s most important entertainment franchises.
We delivered record earnings per share which increased more than 50 per cent from the previous year, double?digit revenue growth, and record high?margin digital revenues that represent an all?time high of 46 per cent of total revenues (all non?GAAP).

He went on to say that Activision plans to grow its stable of blockbusters to ten franchises, up from five at the start of 2014. Hmm, they already have the biggest MMO with World of Warcraft – Warlords of Drainer sold 3.3 million copies in 24 hours and the subscriber base is over 10 million again. Hearthstone has over 25 million registered players. Then there’s Destiny and COD covering the shooter fans. I’d love to see them release a new Warcraft game, or perhaps an all new RPG. Of course, this will be another big year for them what with the StarCraft II expansion coming, plus I’m sure Destiny has even more potential for this year.

I worry about them expanding their stable. It’s hard enough for them to push out a high quality game on time without the need for tons of patches or fixes. Adding to the workload might mean a watering down of quality. Then again, they could probably do well on mobile with another game considering Hearthstone’s success.

Last Updated: February 6, 2015

Zoe Hawkins

Wielding my lasso of truth, I am the combination of nerd passion and grammar nazi. I delve into all things awesome and geek-tastic. You can read more of my words over at, or just follow me on all the social networks to get the true range of my sarcasm and wit.

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