Thanks to Call of Duty, Activision beats King in yearly net revenues and income

A recent interview with Phil Spencer indicates that Candy Crush makes more money than Activision, but more contextual data reveals that this isn't necessarily the case.

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Decoder recently published a lengthy interview with Xbox gaming exec Phil Spencer that touches upon many subjects including Call of Duty exclusivity and Microsoft's mobile aspirations. King is a big reason why Microsoft wants to buy Activision for $68.7 billion, and looking at the revenues, we can see why. However it's important to note that King does not make more money than Activision on an annual basis--in fact, it never has since Activision-Blizzard purchased the mobile giant in 2016.

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Activision, Blizzard, and King net revenues on a quarterly basis.

Data published by Activision Blizzard indicates that King makes more revenues on a quarterly basis during the Q1-Q3 period, but Activision conquers segment earnings with significant revenue spikes in the Q4 holiday period.

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Activision's massive Q4 net revenues earnings spike from Call of Duty is enough to surpass yearly earnings from all other segments.

Call of Duty is so powerful that Activision is able to surpass three quarters of consistent revenues from King's mobile titles. Therefore it is not necessarily correct to make a blanket statement that King makes more than Activision.

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Activision also makes more operating income than King on an annual basis.

Another point: The King segment has not made more net revenue or operating profit than Activision on a yearly basis. It would be remiss to say King makes more than Activision while omitting the most lucrative quarterly period for the Activision segment.

This trend will be made abundantly clear with this year's Q4 period. Modern Warfare II has broken sales records with $1 billion generated from game sales in just 10 days time. This significant milestone will spike Activision's Q4 earnings to new heights and should help make up for the lower operating income made through the first 9 months of 2022.

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King does surpass Activision on a quarterly basis, but only up until the Q4 period when Call of Duty games typically release.

Decoder: I'm looking at the Activision Blizzard numbers. They are structured pretty independently. There's Activision, there's Blizzard, and then there's King, which is the division that makes Candy Crush. I just saw their earnings. King makes more than Activision and Blizzard. Candy Crush makes more than Activision and Blizzard.

Spencer: Are you surprised by that?

Decoder: I'm not. I think our listeners are probably going to be surprised by that.

Spencer: But that's not new.

Decoder: You're buying the Candy Crush company. People think about it as Call of Duty or whatever, but you're buying Candy Crush.

Spencer: Absolutely. In addition, the number that's not in the Candy Crush/King number is Call of Duty: Mobile and Diablo mobile, which are big franchises that exist in that Activision and Blizzard bucket that are also major players on phones. Yes, the idea that Activision is all about Call of Duty on console is a construct that might get created by our console competitor and maybe some players out there.

It is possible that King makes more in-game net bookings than Activision, for example, due to the fact that Candy Crush does not have a retail release and the game is driven by microtransactions. However, Activision-Blizzard does not publish that kind of granular data.

Microsoft has made public statements regarding Call of Duty in an attempt to assuage consumers and regulators, pledging that the franchise will remain on PlayStation and that Microsoft is open to working with Sony to make deals. Microsoft says it wants to treat Call of Duty like Minecraft in terms of access points, however the two games differ greatly--Minecraft does not have a new release every year, for instance.