Activision Blizzard's revenue soars, but active users drop again

Activision Blizzard's latest quarterly financial report shows that revenue in the second quarter of 2023 will increase significantly compared to the same period last year. For those of you who aren't living under a rock, you probably already know where the extra cash flow comes from.

The company's revenue rose 50% year-over-year, but declined slightly from the first quarter of this year. Much of the revenue growth came from Blizzard, thanks to Diablo 4 pre-orders.

"For the quarter ended June 30, 2023, Activision Blizzard's GAAP net income was $2.21 billion, compared with $1.64 billion in the second quarter of 2022," the report said. "AAP net income from digital channels was $2.01 billion. GAAP operating margin was 26%. It was $0.36 in the second quarter of 2022. On a non-GAAP basis, Activision Blizzard had an operating margin of 32% and diluted earnings per share of $0.91, compared to $0.48 in the second quarter of 2022.

However, Activision Blizzard's monthly active users (MAUs) fell again, from 368 million in the first quarter of 2023 to 356 million in the second quarter of 2023, in stark contrast to the holiday peak of 389 million in 2022. While Blizzard acknowledged that Overwatch 2's player base has been in "continuous decline" since last quarter, the studio touts that Diablo 4 will reach 10 million players and expects monthly active users to grow this quarter.

Meanwhile, Activision Blizzard is preparing for a potential merger with Microsoft and will release an earnings report and hold a conference call with investors ahead of the acquisition. It's also worth noting that the merger deadline has been extended from July 18 to October 18, but with a higher termination fee. The extension is likely to be reached after the U.S. District Court declined to grant the FTC a preliminary injunction and the U.K. Competition and Markets Authority was willing to continue negotiations.