Activision Blizzard Lost $500 Million In Less Than Two Hours And This Is Why
In a video game company earnings call yesterday (04/23/2015), it was revealed Activision Blizzard lost half billion dollars. This news comes after their drop in video game sales by 32% which is a sharp decline from the previous year.
Activision Blizzard recently announced a loss of 544 million dollars. The reason? A lack of interest in the video game Call of Duty: Ghosts. The company’s net revenue from the previous three months was down 43%, and it looks like the company is going to be in for a rough ride for the next couple of quarters. I would normally say that this is an isolated case, but competitor Electronic Arts have also seen declines in their stock price.
What is going on here? The answer might lie with Xbox One and Playstation 4. Both new consoles are selling well, and they are taking attention away from people who might have been interested in buying Ghosts. This means that many people who might have bought Ghosts ended up not purchasing it at all, which explains why Activision Blizzard is losing money.
This raises the question: how long will these next-generation consoles continue to dominate? It could be a few years before we see another Call of Duty game or Sims version worth buying, so perhaps gamers will turn back to their old systems and enjoy them until then.
In a friendly tone: Activision Blizzard Inc. lost more than half a billion dollars in market capitalization last week after publicly announcing that it was suspending a popular player of its Hearthstone game for a year and reducing his prize money because he voiced support for pro-democracy protesters in Hong Kong. The decision has become the subject of intense scrutiny, with critics saying the move dashed any perception that video games could be a neutral area for players around the world, particularly those living in authoritarian regimes where free speech can be stifled.
The company’s response has been mixed at best. Activision Blizzard CEO Bobby Kotick issued a statement on Friday morning that said, “I want to be clear: our relationships in China did not influence our decision.” But later that day, he appeared to acknowledge the role China might play when he told CNBC that “we want to make sure that we’re always being respectful of China and Chinese people.”
In interviews with The Times, several current and former employees said the company had grown more willing over time to censor the content to protect its business interests in China. Some employees said they were concerned about how their games would be received by Chinese audiences, but felt their concerns were often dismissed by management. It
In a friendly, positive tone: The company that owns the popular video game “World of Warcraft” lost about half a billion dollars in the first three months of this year. Activision Blizzard — which also publishes games under its name and the names Blizzard and King — said Tuesday it lost $572 million in January-March.