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Activision Blizzard earnings down, and some painful indicators for 2016

Activision Blizzard earnings down, and some painful indicators for 2016

February 11, 2016 | By Christian Nutt

For the fourth quarter of Activision Blizzard's fiscal 2015 -- the three months ended December 31, 2015 -- the company's earnings are down year-on-year, though digital revenues have increased to a healthy 57 percent of the company's net revenues for the full year. For the first time, the company's digital revenues outpaced its physical revenues, COO Thomas Tippl pointed out on the company's earnings call.

Activision pulled in $2.12 billion in revenues for the quarter, as compared to $2.21 billion for the same period of 2014. The company recorded overall annual revenues of $4.62 billion for 2015, as compared with $4.81 billion for 2014.

It's worth noting that these numbers, including that digital statistic, do not include Candy Crush developer King Digital Entertainment, which Activision Blizzard moved to acquire late last year. The acquisition of King is expected to close later this month.

Analysts had expected the company to record revenues of $2.2 billion for the quarter, and Activision itself had projected revenues of $2.15 billion, so the miss was fairly large. The company blamed some of this on currency: the miss on revenues was "largely due to foreign exchange."

Earnings per share for 2015 were $1.32, compared to $1.42 in 2014. The company's stock fell 15 percent in after-hours trading, as of this writing, probably also affected by King's numbers -- both revenues and active users -- taking a tumble

Of course, that wasn't the whole story; "lower than expected performance on Skylanders and Guitar Hero" also contributed, and Skylanders is expected to shrink in 2016, too, thanks to "the challenging competitive environment in the toys to life category." No new Guitar Hero console game is planned for the rest of the console generation. 

Call of Duty had a good year, on the other hand, with Black Ops III capturing record monthly active users and digital revenues for the franchise. However, the company is projecting Call of Duty sales to be down for next year (though franchise revenues to increase).

No "full game" Destiny release will hit in 2016, the company confirmed, planning for the next major release in the franchise for 2017.

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