Downloadable games, add-on content, and mobile gaming is all pushing Activision’s digital revenues to new highs. This shows how the game market has changed for consoles, PCs, and smartphones and tablets as consumers shift from physical discs to digital products. And how the marketing has changes as well with season-pass programs.
The Destiny publisher reported its first-quarter results today, and it revealed that it made a whopping $538 million in revenues from digital sales. That made up 76 percent of its total Q1 revenues on a non-generally accepted accounting practices (non-GAAP) basis. That’s a huge chunk of Activision’s sales, and it’s also a record for digital revenues for its first quarter.
That money doesn’t just come from selling digital versions of full games on PlayStation 4, Xbox One, and PC — although downloadable games are more popular than ever. The revenue also comes from the downloadable content and season passes — essentially, DLC rollouts that you pay for in advance — for games like Destiny, the sci-fi shooter, and Call of Duty: Advanced Warfare. The latter game is producing more revenue per player than ever before, and that’s primarily due to microtransactions for in-game cosmetic items, a melding of the PC and mobile model that is just coming to console games.
Another big contributor is Hearthstone: Heroes of Warcraft, which is a digital card game for PC, Mac, and mobile. It is free-to-play, but it is one of the top-grossing apps on iOS and Android in several important markets. The company released the Goblins vs. Gnomes expansion for Hearthstone during the fourth quarter of last year, and that enabled players to buy packs with tons of new cards. Activision says that this content helped the game’s revenues remain steady throughout the quarter.
Finally, World of Warcraft is still making money for Activision and Blizzard. Its subscriber numbers plummeted to around 7.1 million, but that’s still a ton of people paying $15 every month. The publisher even said itself that it expects to keep this level of World of Warcraft players for the foreseeable future.
Moving forward, Activision’s digital revenues should only grow. It just released the Blackrock Mountain add-on adventure for Hearthstone, which likely generated a significant amount of revenue. It is also planning to launch its multiplayer online arena battler Heroes of the Storm next month. That could start producing Hearthstone-like cash not long after it goes live.