Activision Blizzard to report earnings as gaming industry hits post-COVID recession

“Call of Duty” maker Activision Blizzard ( ATVI ) reported second-quarter earnings after Monday’s close, surpassing Analysts’ expectations for revenue but fell short of the bottom line as the industry faces a slowdown from pandemic-era highs.

Here are the most important numbers from the announcement relative to what Wall Street expected from the gaming giant, as compiled by Bloomberg.

Shares of Activision Blizzard were largely flat after the report.

While Activision Blizzard beat analysts’ expectations, bookings fell more than 14% year over year. “Bookings” measure total revenue, but subtract deferred sales from certain online purchases.

The gaming industry is going through a serious hangover after its explosive growth during the pandemic. Both Microsoft ( MSFT ) and Sony ( SONY ) reported slowing software sales and user engagement during their latest earnings.

Microsoft, which does not break out revenue for its Xbox products, said service revenue fell 6 percent year over year. Sony, for its part, reported a 13% year-over-year decline in software revenue. Unit sales, meanwhile, fell 26% year over year.

In June of this year, according to NPD, spending on game hardware, content and accessories fell 11% year over year to $4.3 billion.

But Activision Blizzard has a huge slate of titles coming, including a new “Call of Duty,” a new free-to-play “Call of Duty: Warzone,” and more.

Additionally, despite many tech companies announcing hiring slowdowns and freezes, Activision Blizzard CEO Bobby Kotick said the gaming company has increased its staff.

“Even in a challenging economic environment, with so many companies announcing hiring freezes and layoffs, our development headcount was up 25% year over year at the end of the second quarter.”

FILE - The Activision Blizzard Booth is seen on June 13, 2013, during the Electronic Entertainment Expo in Los Angeles.  Microsoft's purchase of video game publisher Activision Blizzard is facing antitrust scrutiny in the U.K., where competition regulators say they have launched an initial investigation into the $69 billion deal.  The Competition and Markets Authority said on Wednesday, July 6, 2022, that it has begun examining whether the transaction would result in a

The video game industry is dealing with a hangover from the highs it experienced during the pandemic. (AP Photo/Jae C. Hong, File)

Microsoft is also waiting to hear whether its planned acquisition of Activision Blizzard can go ahead. While Microsoft has said it is confident the $68.7 billion deal will close by the end of fiscal year 2023, the Federal Trade Commission is still reviewing the purchase.

Global regulators are also looking into the takeover. On July 6, the UK’s Competition and Markets Authority announced it had launched an investigation into the move. The authority is expected to announce its findings on September 1.

If the deal goes through, Microsoft will gain access to Activision Blizzard’s vast library of games, including “Call of Duty” and “World of Warcraft.” Microsoft, meanwhile, has assured fans that if regulators approve the acquisition, “Call of Duty” will still be available on Sony’s consoles.

Activision Blizzard dealt with the fallout from explosive allegations that it and Kotick created an environment similar to a home atmosphere plagued by sexual harassment and gender discrimination.

In March, the company paid $18 million to settle a lawsuit filed by the U.S. Equal Employment Opportunity Commission over the allegations. The California Department of Fair Employment and Housing also filed a lawsuit against the gaming company, though that case is still pending.

In a statement to Yahoo Finance, a spokesperson for Activision Blizzard said: “Our priority is and always will be to have the best workplace for our employees. The DFEH made its allegations without completing its investigation and did not follow its own of investigation and conciliation requirements Accused by EEOC and others of unethical conduct. No court has ever found DFEH’s allegations to be true.”

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