In another example of the video game industry coming down from its pandemic-era highs, Activision Blizzard showed mixed results in its second-quarter earnings, which were still well below its performance last year.
The game publisher behind such AAA titles as Call of Duty and World of Warcraft beat analyst expectations on revenue but missed on earnings.
It reported $1.64 billion in net revenue, compared to $1.59 billion expected, which is down from $2.29 billion in the same quarter last year. It also made $0.47 in earnings per share, versus $0.48 expected, down from $1.20 per share.
The so-so earnings report comes amid a broader slowdown in the video game and tech industries broadly related to shifting consumer habits and demands.
CEO Bobby Kotick noted that Activision Blizzard has tried to grow through the slowdown, pointing to its recent acquisitions of developers Proletariat and Peltarion.
"Even in a challenging economic environment, with so many companies announcing hiring freezes and layoffs, our development headcount grew 25 percent year-over-year as of the end of the second quarter," he said. "Our talented teams are planning to release exciting new Call of Duty, World of Warcraft, and Overwatch content later this year."
However, major releases such as Overwatch 2's non-competitive campaigns and Diablo IV are not coming until 2023. Both titles have been delayed multiple times amid reports of production difficulties.
Still, the company is expecting moderate growth in the third quarter.
"Based on the current pipeline, total segment operating income is expected to increase modestly in the third quarter versus the second quarter, and to return to year-over-year growth in the fourth quarter," the company said in a press release.
Another big release, Call of Duty: Modern Warfare II (the sequel to a reboot), is set for release in October.
The company also continues to push into mobile, expanding its most popular franchises into the space with offerings such as Warcraft: Arclight Rumble and Diablo Immortal, both of which rely more on in-game purchases for revenue. Diablo Immortal, for instance, surpassed $100 million in player spending in June, according to one report.
Activision Blizzard's King division, developers of the hit mobile game Candy Crush, also made a strong showing. King's in-game net bookings increased 6 percent year-over-year, and the advertising business jumped 20 percent, despite headwinds for digital advertising.
Due to its planned acquisition by Microsoft, which is still under regulatory review, the company did not hold an earnings call or press conference.
The stock was up slightly in after-hours trading.