Activision/Blizzard Q3 2011 Conference Call

JamesL reminds us that the Activision/Blizzard quarterly conference call is today, Tuesday November 8th, at 1:30pm PST. You can listen to the call, streaming live, via the ATVI investor page.

We were all excited about the last two of these, hoping for an announcement of the Diablo III beta start date. We never got it, with both the May and August calls featuring brief “we’re still on track for Beta in Q3” statements from Mike Morhaime.

Might today’s call reveal something new about Diablo III, such as an official release date? I sincerely doubt it, but you never know. Most likely the call will mostly focus on the newest Call of Duty game, which just launched and which is expected to be the biggest selling game of the year. Plus those Skylanders toys, which are apparently selling very well, especially with the annual, late-December “buy your kids overpriced, brightly-painted plastic crap” holiday approaching.

If you want more on that topic, check out a short interview with Bobby Kotick in USA Today. There’s no mention of Diablo or even of Blizzard, but if you don’t read it, Mr. Kotick will be displeased. And when he’s displeased, he forgets to blink. And you don’t want that.

In related news, a financial website of entirely unknown provenance has this “Buy ATVI now!” article up today. They cite expected huge sales for CoD:MW3, plus the likelihood of 3 Blizzard titles next year and project ATVI stock to rise towards $19/share. (It’s at $14 now, which is a three-year high.)

Update: As expected, nothing new on Diablo III. We did get some D3 news, in Bashiok’s posts about the D3CE’s Aesthetic Artifacts, but nothing was revealed during the call itself. A few of the key points:

Blizzcon 2011 had over 26,000 attendees and 500,000 PPV orders. (500k x $40 = $20m).

WoW is down to 10.3m subs, with most of the losses coming from the East. Bliz recognizes that the end game additions of Cataclysm were underwhelming, and they’ve got a huge content patch coming up very soon, as a stopgap measure while fans wait for the new Panda stuff in the next expansion.

Also, as Noxifer reports in comments:

Most of the questions [from media after the call] were about Diablo3 and WoW. From what I heard I got the sense that the investors look at Diablo3, RMAH kinda like a bad bet. [Compared to the guaranteed monthly $ from WoW subs.] Mike Morhaime was also under the line of fire about why the WoW subscribers went from 12 million to 10.3. His excuse was that last year they released two products, while this year they didn’t release any.

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34 thoughts on “Activision/Blizzard Q3 2011 Conference Call

  1. I don’t think we get a Diablo 3 release date today as an “also-ran”. It will likely be announced during mid December when the focus is on the launch of SWTOR. This is what I would do then:
    1.) Big announcement of the Diablo 3 release date (probably January 17, 2012), incl.:
    2.) Activation of the Diablo 3 pre-download for alle WoW annual pass subscribers in their accounts (the pre-download minimizes the server load at launch)
    3.) A big public server stability stress test for all WoW annual pass subscribers and all Diablo 3 pre-orders. The stress test should start mid December, and yes, I don’t believe the Diablo 3 tech team has xmas holidays this year. 😉

    • PS:
      Why should Diablo 3 launch mid January 2012, you may ask? Simple answer: All SWTOR buyers can play/explore the MMO for free for 30 days. Since “Early Access” users (pre-orders) can start already on December 15, this bonus will expire exactly mid January 2012. If Activision Blizzard wants to hit Bioware/EA – and I’m sure they want – Diablo 3 should be on the shelves at that time. ^^

      • I don’t think Blizzard plans that way. They release a new game like what, every 5 years excluding expansions? And with expansions it’s maybe every 2 years. They make their games to last for potentially a decade and in that setting, quality trumps everything. That is their reputation and that reputation is definitely not worth risking just so you can snatch a couple of customers that are between games.

        • This might have been true in the past, but SWTOR could cost Blizzard (WoW) millions of subscribers, and they are well advised to do something against that to stabilize their turnovers, or the investors will rip them apart. Or how would you explain tbe WoW annual pass incl. a free Diablo 3? ^^

  2. In September I  purchased a modest amount of shares in ATVI. The stock broker didn’t really get it. The powers that be weren’t giving it a really strong rating. He just figured I was just some man-boy who wanted to pick up some “video game” stocks for fun (partially true heheh).
    Anyway, I know haters are going to hate. People hate blizz, people hate activision … but for every hater, there seems to be about 1,000,000 people that will drop good cash on their products.
    (at the time I am writing this, ATVI is sitting at 13.86, tends to drop a little mid day…)

  3. Given the timing of the call I expect this to be themed around CoD with only an offhand mention of Blizzcon being successful, Diablo 3 beta is performing better then expected and they are confident/happy with the new early 2012 Diablo 3 release date.

  4. I trade in the NYSE and Nasdaq markets pretty regularly and I’ll tell you that ATVI is a crappy investment.  Any gains you see will be with the rise and fall of the S&P500.  Take a look at their 5-year charts – despite launches of the previous CoD games, WoW xPacs, Starcraft, etc… the stock trades in a range of $10 to $13 / share – any breakout due to upcoming releases is highly unlikely.
    I also predict that there will be no D3 launch date announcement.  It would be a financial faux pas to announce an exact date only to miss it – instead they will call a vague quarter, like Q1 2012.  Its easier to then push back to Q2 and not get bad press (except here, am I right!)

    Short story, I can think of about 100 better investments over ATVI.

    • Hardly a crappy investment if you plan to “Set it and forget it.” I plan on letting this stock sit and ride the waves. If you look at the entire length of the stock, it has done pretty well. How do I define “Well” it has consistently made money. And even when the stock market keeled over and died in 2008/2009, it was still worth something.
      If playing the stocks is your source of income, then no don’t buy this stock.

      • Great, I’m glad you are enjoying the market 🙂  I hope I’m dead wrong!
        Happy gaming and trading.

      • Heh, I’ve been sitting on ATVI shares for years, the only thing I’ve learned about those shares is that they are rather volatile and constantly rise and fall without any apparent reason (to me at least), which seems somewhat strange considering the consistency of the company.
        I don’t really care though, it’s a low 3 figure amount (of shares) and I only keep it because I love Blizzard games. By the way, if every customer of WoW had as many shares as I did, we’d almost own the entire company 😛

      • I’d argue against ATVI as a long term investment because they don’t pay dividends. (Other than one very minor first time one last year.) It’s not a growth stock in that way, and as others have said, it’s something you buy if you’re pretty sure it’s going to go up and you’re going to keep your finger on the trigger to sell and take your gain.

        That said, it’s not a bad buy right now, especially given how bad other investments are in these days of zero interest. ATVI seems very unlikely to drop further in value, at least, and with Activision doing okay and Blizzard poised for a big 2012, some 12-16m gains are fairly likely.

        As always with the modern stock market, realize that you’re essentially gambling on human psychology, in that it matters far more what other investors think than what any company’s sound fundamentals are. If lots of people can be convinced that ATVI is a good buy, they’ll buy it and the price will increase. Or vice versa.

  5. For those of you who do not know, Bashiok now has his own twitter, and he tweeted about this – and responded to me regarding it.

    He said via twitter that this conference call is not worth hearing. He was also contemplating about whether or not there was ever an announcement on a conference call worth hearing, and I mentioned SC2’s release date (which he said could be right). He followed up by saying to not really waste your time listening in.

    That being said, I’m sure you guys will be listening in to make sure anyways.

    • Quoted response from regarding that tweet:
      “Although Bashiok HAS been known to be a troll of epic proportions…”.

      • However, if Bashiok says “not really waste your time listening”, it doesn’t mean that he knows that Mike will not make an announcement today, but that he knows that the announcement will be made on ANOTHER DAY. In other words: A date for the Diablo 3 release date announcement already exists. ^^

  6. Early 2012 is still the target for Diablo 3, RMAH test soon, high expectations for Diablo 3 – that’s all from Mike for today. ^^

  7. Just listened to the conference call, what i found interesting was that the most of the questions were about Diablo3 and WoW. From what i herd I’ve got the sense that the investors look at Diablo3, RMAH kinda like a bad bet. Mike Morhaime was kina like under line of fire why the WoW subscribers went from 12 million to 10.3. His excuse was that last year they released two products, while this year they didn’t released any, lol :D:D

    • I guess the wow subscription numbers go down due to ppl simply getting bored with the game. How many years can you constantly play the same thing for and nOt get bored?

    • A lot of people have their own opinion as to why WoW is shrinking and I believe the answer is multifaceted.

      I personally think WoW is not recession-proof.  I’m betting there are actually 8-9 million players, the remaining approx. 3 million were from people holding multiple accounts (since you can only have 10 toons per account).  When times get tight, you eventually get tired of paying $14.99 x 2 or 3 accounts, so you drop it to one primary.  The recession hit at the end of 2008 and a lot of things have lag-factored into 2011 financially speaking.

    • Yep, and now we know why Diablo 3 (turnovers) have been moved to 2012: SWTOR will cost them additional 2-3 mio. subscribers during the first year if they don’t get their arses up now and release Diablo 3 ASAP, and Mists of Pandaria (MoP) by (early) summer 2012. ^^
      Mike also said that they have “aggressive marketing plans during the next months for MoP”, which probably means that they’ll start the more or less public MoP beta shortly after the Diablo 3 release (maybe February 2012).

  8. I’ve been watching Blizzard since they were owned by Vivendi (actually, they still are, somewhat) and like others have already said, there’s no rhyme or reason to it. I thought the big China WoW deal would affect the price DRAMATICALLY! WRONG! It just kept flip-flopping like a fish out of water.
    Wall Street gives no fucks about what game companies do unless they release another Guitar Hero or Sims. They’re just totally unaffected, for whatever reason, by wildly successful game releases.
    I was watching, not buying based on the history, ATVI for a big jump after SC2 release. I thought surely there would be an immediate 3% day… nothing.
    Anyway, game companies have mysterious stock price fluctuations that are probably caused by basket trades, quarterly earnings reports, the occasional ultra-massive game release, big merger deals, employee stock options, and insider trades. They’re just another ticker on the tape, and thats just sad… like, we KNOW D3 will be a huge success, but Wall Street just does not care.

    • I bought ATVI stock once too when I first started getting into the stock market a couple years ago.  I learned pretty fast why it was a terrible stock.

      Game companies don’t make “unique” products.   If I want a good first person shooter, there are plenty of companies to buy one from.   A game company has no real competitive advantage.  Yes there are “some” games, but they don’t tend to remain king of the hill.   A single must have game doesn’t really get you huge earnings either. Not year over year.   Now WoW did set Blizzard apart.  But with shrinking numbers, that is going to change.  At least until Titan, and that’s assuming Titan can replicate WoW’s success.
      Another big factor is of course P/E ratio and market cap.  Activision has a 15.92B market cap.  That means they have upwards of 1.1+ billion shares.  That’s a hell of a lot.  Your earnings need to be freaking amazing to drive your price up.  And then you need to improve on those earnings the following year to drive your price even further up.   Just very hard to do in the game industry.   The best a game company can really do is hope to replicate last years success.
      Those are of course just a couple of factors.  There are so many when evaluating stocks.

      • Oddly enough, Activision/Blizzard’s earnings aren’t that great, yet the price continues to rise. Isn’t the market great?

  9. The loss in WoW subscribers is not a surprise, and its not a “Wow is doomed” omen.  It’s simply the way that game goes.  

    I’ve been playing WoW for 3 years, and over those three years, I’ve only been subscribed about 6-8 months per year.  That’s about half the time since I started.  The reason is simple:  I get bored.  The most I play is the first couple of months after a new Expansion or a new Patch.  After a while I’ve seen all the new content, and I get bored, so I unsub for a few months until Blizzard has some new phat lewt to bribe me with.  I think this applies to a lot of other people as well.

    The game is getting older. While there may be rises here and there right after expansions/patches, we will see a slow and steady decline in Wow subscriptions over the next few years.

    It will be interesting to see the effect that SW:TOR and D3 has on Wow in the next 6 months. I know personally I will unsub from WoW the moment D3 gets into my hands and I can waste too many hours on a game I’ve waited too long for. While there may be a dip in Wow subs because of D3 and TOR, I don’t think it will much of an impact. Wow is still the king, and will remain so for years. I could be wrong though.

    • You’ve just said it yourself: “I will unsub from WoW the moment D3 gets into my hands and I can waste too many hours on a game I’ve waited too long for.”
      Many people came from D2 to WoW and will likely go back to Diablo once D3 is out. The “ROI” in WoW – timewise – is just too low for casual gamers.

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