Activision Blizzard to report earnings as games industry hits post-COVID slump

Activision Blizzard will reports its Q2 earnings after the bell on Monday. Read More...

“Call of Duty” maker Activision Blizzard (ATVI) will report its Q2 earnings after the closing bell Monday, as the video game industry contends with a slowdown from its pandemic-era highs.

Here’s what Wall Street is expecting out of the gaming giant, compared to how it performed in the same quarter last year.

Bookings are a measure of revenue generated by products and services sold, license fees, merchandise, and publisher incentives, excluding the impact from deferrals of revenue from certain online purchases.

The gaming industry is undergoing a serious hangover following its explosive growth during the pandemic. Both Microsoft (MSFT) and Sony (SONY) reported slowdowns in software sales and user engagement during their latest earnings.

Microsoft, which doesn’t break out revenue for its Xbox products, said services revenue fell 6% year-over-year. Sony, for its part, reported a 13% year-over-year decline in software revenue. Unit sales, meanwhile, fell 26% year-over-year.

In June of this year, according to NPD, spending across game hardware, content, and accessories dropped 11% year-over-year to $4.3 billion.

FILE - The Activision Blizzard Booth is shown on June 13, 2013, during the Electronic Entertainment Expo in Los Angeles. Microsoft’s purchase of video game publisher Activision Blizzard faces antitrust scrutiny in the U.K., where competition regulators say they’ve opened an initial inquiry into the $69 billion deal. The Competition and Markets Authority said Wednesday, July 6, 2022, it has started looking into whether the transaction would result “in a substantial lessening of competition” in the United Kingdom. (AP Photo/Jae C. Hong, File) — The video game industry is dealing with a hangover from the highs it experienced during the pandemic. (AP Photo/Jae C. Hong, File)

Microsoft is also waiting to learn if its planned acquisition of Activision Blizzard can move forward. While Microsoft has said that it’s confident the $68.7 billion deal will close by the end of fiscal 2023, the Federal Trade Commission is still looking into the purchase.

Global regulators are also examining the acquisition. On July 6, the U.K.’s Competition and Markets Authority announced that it launched an investigation into the move. The authority is expected to announce its findings on Sept. 1.

If the deal goes through, Microsoft would gain access to Activision Blizzard’s massive library of games including “Call of Duty” and “World of Warcraft.” Microsoft, meanwhile, has assured fans that if regulators approve the acquisition, “Call of Duty” will still be available on Sony’s consoles.

Activision Blizzard has been dealing with the fallout from explosive allegations that it, and CEO Bobby Kotick, fostered an environment akin to a frat house atmosphere plagued by sexual harassment and gender discrimination.

In March, the company paid $18 million to settle a lawsuit filed by the U.S. Equal Employment Opportunity Commission related to the allegations. California’s Department of Fair Employment and Housing also filed a lawsuit against the gaming company, though that case is still pending.

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