Activision Blizzard’s World of Warcraft game has shed half of its subscriber base over just the past six months: The player count dove from 10 million paying customers in January to less than 6 million at the end of June. Sure, WoW is still the most popular role-playing game of its kind in the world. But it now has less than half of the 12 million active gamers it counted at its peak in late 2010.
Yet it’s hard to find evidence of that collapse in Activision’s operating results. In fact, the business is posting near record growth. Revenue rose 15% last quarter as profit doubled. Activision entertained 25% more active players across all of its franchises last quarter, which equates to 3.5 billion hours of gameplay over the past three months. The publisher just raised its full-year sales and profit forecasts as the stock hit a new all-time high.
Here’s the most impressive thing about those second-quarter results: They include a 29% increase in sales on the Blizzard side of Activision’s business. In short, Activision had no trouble navigating a huge drop in the player base of one of its tentpole franchises.
That’s incredible when you consider that as recently as 2011 the World of Warcraft franchise was worth a whopping 90% of Blizzard’s sales. The reliance on that game along with the publisher’s other two hits, Call of Duty and Skylanders, was so big that it created what Activision’s management described as one of the biggest risks for investors.
That expansion should boost subscriber numbers, at least for a short time. But the deeper portfolio of franchises makes a Warcraft spike much less critical to Activision’s future. Investors can expect to see dozens of launches and expansions across key franchises, including Diablo, Heroes of the Storm, Hearthstone, and StarCraft, over the next few quarters. And they have less reason to worry that weak results out of any single game will sink Activision’s business results. Best place to buy wow gold