Activision Blizzard revenue is falling like Call of Duty Demand Sputters

Activision Blizzard Inc.

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‘s first quarter sales and profits fell as demand for their Call of Duty video game franchise fell.

The video game company, which in January agreed to be acquired by Microsoft Corp.

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for $ 75 billion, a 22.3% drop in sales from a year ago, reflecting weaker premium sales for “Call of Duty: Vanguard”, the latest installment in the popular franchise, as well as lower engagement with “Call of Duty” : Warzone, ”a title that can be played for free.

Microsoft agreed to buy the video game developer for $ 95 per game. share in an effort to expand its catalog of magnificent video games and get more customers to their cloud gaming service. Microsoft estimated the deal at nearly $ 69 billion after adjusting for Activision‘s

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net cash. The agreement has been approved by the boards of both companies and will make Microsoft the world’s third largest gaming company in terms of sales.

For the quarter ending March 31, Activision had a profit of $ 395 million, down from $ 619 million in the same quarter last year. In addition to the weak demand for their Call of Duty titles, Activision said it took a hit because of the product cycle timing for its Warcraft franchise, along with increased legal costs and other costs associated with the Microsoft acquisition.

Excluding non-recurring items, adjusted earnings for the quarter fell to 64 cents per share, down from 98 cents in 2021. Analysts polled by FactSet had expected earnings of 71 cents per share.

Sales were at $ 1.77 billion in the quarter, which is less than analysts’ expectations of $ 1.82 billion.

The acquisition is expected to be completed in mid-2023.

Microsoft announced plans to buy Activision when the company was hit by allegations of fraud in the workplace. Its CEO, Bobby Kotick, had known of various allegations of sexual abuse for years, The Wall Street Journal reported earlier, though he did not inform the board of everything he knew. The questions led to lawsuits and federal investigations.

Mr. Kotick has said he has been transparent to the company’s board of directors, and Activision has called the Journal’s reporting “misleading.”

Last week, the company said it plans to add two women to its board of directors.

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