Activision Blizzard, the largest U.S. video game publisher, reported revenue that topped analysts’ expectations, but adjusted sales were down from a year ago due to last fall’s soft launch of Call of Duty: Vanguard and a slump in the broader gaming industry. 15%. Activision, is being acquired by Microsoft, brought in adjusted revenue of $1.64 billion (Rs 13,000 crore) in the second quarter, compared with analysts’ average forecast of $1.6 billion (Rs 12,600 crore). Adjusted revenue excludes deferred sales of online purchases. Adjusted earnings per share were 47 cents (about 0.3 rupees), down nearly 50% from a year earlier and slightly analysts’ expectations, according to data compiled by Bloomberg.

Activision said last fall’s Call of Duty: Vanguard underperformed expectations, and that had knock-on effects for the company’s fiscal year. The game received negative reviews and faced stiff competition from new entries in the popular Halo and Battlefield franchises.

During the second quarter, Activision’s Blizzard division released Diablo Immortal, a new mobile game in the action series. Activision’s Chinese partner NetEase delayed the launch of Diablo Immortal in the world’s largest mobile app market by about a month, saying it needed more time. It was finally released on July 25th. Activision did not provide revenue figures for the new Diablo game on Monday.

The video game industry faces a down year as it deals with hardware supply chain issues affecting consoles, inflation and a lack of big hits. Interest in gaming has also cooled as pandemic stay-at-home orders are lifted and people resume outdoor interests and activities. Spending in the video game industry is expected to drop 8.7 percent this year, according to a report from analytics firm NPD Group.

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Activision said it expects revenue and EPS to “remain year-over-year down in the second half.” The stock was up less than 1 percent at $80.45 (about Rs 6,500) in extended trade.

Call of Duty: Modern Warfare II is a new entry in the series and will be released on October 28. But the series will then skip 2023, according to Bloomberg. Activision will instead publish add-ons for Modern Warfare and other Call of Duty-related content. The next mainline game in the series comes from Treyarch Studios and is scheduled for 2024. Call of Duty is Activision’s largest video game franchise, and the titles regularly top the annual sales charts. Since the series launched in 2003, they have sold over 400 million units.

Activision said it will also release an early access version of Blizzard’s Overwatch 2 on Oct. 4 and Dragonflight, a new expansion for its online game World of Warcraft later this year. Diablo IV will launch next year, the company said.

The Santa Monica, California-based publisher grew its developer headcount by 25 percent from a year earlier, in part due to the acquisitions of Boston-based games company Proletariat and Sweden-based artificial intelligence company Peltarion, Will assist in the expansion of World of Warcraft. However, it said it “remains aware of risks, including those related to labor market and economic conditions.”

Microsoft announced its acquisition of Activision in January. The Xbox maker has made a big move in, while Activision Blizzard’s stock has been hammered by an ongoing sexual misconduct scandal over the last year. Activision’s shares have risen about 20 percent since the January announcement, but are still trading well the $95 (roughly Rs 7,500) offer price per share, suggesting the market is uncertain whether the deal will go through. Lina Khan, the newly appointed chair of the Federal Trade Commission, said she plans to take a tough stance on tech mergers. Activision said it expects the deal to close in Microsoft’s fiscal year ending in June 2023.

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By Rebecca French

Rebecca French writes books about Technology and smartwatches. Her books have received starred reviews in Technology Shout, Publishers Weekly, Library Journal, and Booklist. She is a New York Times and a USA Today Bestseller...