Activision Blizzard (ATVI) posted weaker-than-expected first quarter earnings Monday in a surprise pre-market release that indicated softer demand for its latest Call of Duty franchise.
Activision said adjusted non-GAAP earnings for the three months ending in March were pegged at 64 cents per share, down 23.8% from the same period last year and well shy of the Street consensus forecast of 71 cents per share. Group adjusted revenues, the company said, fell 28.5% to $1.48 billion, again missing analysts' estimates of a $1.8 billion tally.
Adding the impact of referrals, a metric used by Activision to more closely compare earnings on a quarter-to-quarter basis, the group posted earnings of 89 cents per share.
The video game maker, which is in the process of being bought by tech giant Microsoft (MSFT) for around $69 billion, said monthly active users fell 14.5% from last year to 372 million, taking in-game billings down 24.6% to $1.01 billion amid weaker-than-expected demand for its Call of Duty: Vanguard release.
Activision shares were marked 1% lower in early Monday trading immediately following the earnings release to change hands at $77.81 each.
Activision, which also which also publishes 'World of Warcraft', said its $69 billion sale will close in the second quarter of next year.
"In light of the proposed transaction with Microsoft, and as is customary during the pendency of an acquisition, Activision Blizzard will not be hosting a conference call, issuing an earnings presentation, or providing financial guidance in conjunction with its first quarter 2022 earnings release," the company said.
CEO Bobby Kotick will continue to lead Activision, the companies have said, but will report to Microsoft gaming CEO Phil Spencer.
The all-cash offer, which values Activision at $95 per share, Microsoft will have access to 30 internal game development studios, as well as e-sports publishing capabilities, when the deal closes later this year, while helping build-out its XBox console offerings.
"Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms," said CEO Satya Nadella at the time of the purchase. "We're investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all."
