Activision And TakeTwo Earnings Compared

BY

Now that the console hardware giants have reported their earnings, it’s time for the console software giants to weigh in. Times are good all around, it would seem, for those making AAA console games. Activision and TakeTwo all reported better-than-expected numbers, though in TakeTwo’s case it’s losing less money than they anticipated. It is both interesting and educational to compare the results from these three companies, and to read between the lines of the official comments made during the earnings calls.

Starting with Activision Blizzard, the company reported a strong second quarter, with both GAAP and non-GAAP revenues beating the company’s prior outlook, though GAAP revenues were below last year’s level. Activision Blizzard brought in $970 million in GAAP revenue, beating the $910 million projected, and down from $1.05 billion in the same quarter last year. On a non-GAAP basis (usually the better way to assess a company’s revenues when digital products are important), revenue was $658 million compared to last year’s $608 million.

Activision’s CEO Bobby Kotick noted a key fact: “On a non-GAAP basis, we generated $658 million in revenues, with a record 73 percent from digital channels and earnings per share of $0.06.” Quite impressive for a company so heavily invested in the traditional packaged goods business model, but rather a scary indicator for retailers like GameStop. The march towards digital continues, and it’s not slowing down.

Activision’s dependent on five franchises now, and hoping to make that six when Destiny comes out next month. “Our strong performance was driven by 5 distinct franchises, which highlights the increasing breadth and depth of our expanding portfolio,” noted CFO Dennis Durbin. “Blizzard Entertainment’s strong results were driven by World of Warcraft subscriptions, Warlords of Draenor prepurchases and paid character boost, Diablo III: Reaper of Souls expansion pack sales and sales of Hearthstone cards. On the Activision Publishing side, performance was driven by Call of Duty: Ghosts, and Skylanders SWAP Force.”

It’s quite impressive how Hearthstone continues to grow, showing the strength of the collectible card game model when properly executed. It’s also a strong performer for Activision in the mobile space, where the company hasn’t previously had a major impact.

While the company expects a strong second half driven by releases like Destiny, Call of Duty: Advanced Warfare, the new Skylanders: Trap Team, and the Warlords of Draenor expansion for World of Warcraft. Still, there are some cautionary notes embedded in the good news.

“We see industry-wide, that there’s been sort of a secular downturn as it relates to preorders,” said Activision president Eric Hirshberg, while noting that Destiny is on track to have the highest pre-orders ever for any new IP in the industry. “We think that’s happening due to a number of factors, things like increased digital consumption, particularly on the next-gen consoles, titles being widely available on day 1 and the decline overall for demand on previous-gen consoles. ” Also in the category of things to be concerned about, Blizzard saw a drop of 800,000 subscribers for World of Warcraft, which they claimed was to be expected.

TakeTwo’s earnings call, held at the same time as Activision’s, was quite different. There TakeTwo was careful to try and position its earnings in the best light, but it’s tough to do that when you (a) lost money and (b) had less revenue than last year. On the bright side, TakeTwo lost less money than it did last year, and the company was also quick to point out that it made an enormous pile of money from Grand Theft Auto V last year. So who cares about a few million lost this last quarter

The lackluster results were probably why TakeTwo put them later in the earnings call, and CEO Strauss Zelnick’s statement focused on the past (making great money from GTA V last year) and the future (there’s a great lineup of products ahead) rather than talking about the unpleasant present. TakeTwo lost $35.4 million on net revenue of $125.4 million for the quarter, compared to a loss of $61.9 million on $142.6 million in the same quarter last year.

TakeTwo would prefer that we look ahead to the fall, when Grand Theft Auto V will be coming out on Xbox One, PlayStation 4, and PC. Will current owners (all 35 million of them) buy a new version of the same game That’s tough to say, but TakeTwo is allowing transfer of characters to the new versions. Aside from GTA V, TakeTwo is also looking to NBA 2K15 to be a hit, as the game makes it to next-gen consoles and PC as well as current-gen consoles. Also coming out this fall will be Borderlands: The Pre-Sequel, Civilization: Beyond Earth, and WWE 2K15. Sadly, though, one of TakeTwo’s most anticipated titles, Evolve, has been pushed out to 2015. Still, the company should have more than enough new product this fall to make up for it.

TakeTwo’s digitally delivered revenue grew 43 percent in the quarter, to $106.4 million. That’s impressive growth, but the company is still far behind both Activision and EA, where digital revenue is now providing the majority of the company’s sales. TakeTwo is still far behind, with 16 percent of its revenue coming from digital. “Nearly 90 percent of this growth came from recurrent consumer spending, which accounted for approximately 60 percent of our digitally delivered revenue during the period,” said CEO Strauss Zelnick. “The remainder came from full game downloads across console, PC and mobile platforms. The largest contributor to recurrent consumer spending was virtual currency for Grand Theft Auto Online and NBA 2K14.”

The bottom line for both Activision and TakeTwo is that new releases are important to keep the companies growing and to deliver good results. Catalog sales are important, to be sure, but gamers want new experiences constantly. Digital delivery is increasingly important, too. It’s great to focus on extending successful titles, and making sure each title is a hit, but reducing the experimentation on new titles is going to increase a company’s risk in the long term. New IPs like Destiny and Evolve are critical to keeping game publishers at the top of their game.

Top 5 Emerging Vloggers On YouTube

BY

by Jessica Klein

Though YouTube is home to all kinds of video content, from piano-playing kittens to cooking how-tos, it still has an arguably special relationship with the type of creator that teenagers flock to VidCon to smile at in person. The vlogger, embodied in YouTube partners like Jenna Marbles {link no longer active} and John and Hank Green (the Vlogbrothers) {link no longer active}, have been reaching fans in a uniquely personal manner since the earliest days of the ‘Tube.

However, there seems to be an endless opportunity for new faces in the vlogosphere. There are always new niches to fill, and vloggers find their reflections in the YouTube viewing population. This means that for every niche interest, there could be a vlogger to record their musings on it for a fan base that seems to be already waiting to watch and listen.

In a world where more and more people seek to make a living through platforms like YouTube, this has a serious implication for brands. The niche audiences that vloggers accumulate create near perfect opportunities for brands trying to market to distinct target demographics. Lindsay Sutton, the vice president and director of social content at DigitasLBi, knows exactly how this phenomenon works. However, she recognizes that not all brands do, and cautions them to leverage their products via vloggers to their best possible advantage.

“Look beyond just the number of subscribers—choose a vlogger that makes sense for your brand,” she explains. “Otherwise, although you may achieve reach because viewership is high, you might find yourself with poor engagement numbers because that reach won’t be hitting your target audience.”

Of course, authenticity is everything for a vlogger’s digital reputation. Hence Sutton elaborates on marriages between brands and vloggers, “Spend the time truly combing through the content, get a great understanding for the audience, and then make the decision if you want your brand to have a role. It’s much better to choose a partner who will work with you to create seamless integration for your brand-something that feels like an effortless addition to that vlogger’s programming.”

Potentially catching the eye of brands during such strategic “combing,” the following top five emerging vloggers are gathering viewers as you read this. Here’s who brands might be looking to partner with next:

5. The Chicks Life

  • SlateScore: 266
  • Total Subs: 2,012
  • Monthly Views: 4,640

Resembling the Shaytards family vlogging idea, The Chicks Life follows a filmmaker father and his teacher wife along with their baby and two pets.

 

{link no longer active}

 3. Jamie Pine

  • SlateScore: 466
  • Total Subs: 40,609
  • Monthly Views: 30,654

Though his channel’s featured video extols reaching the 25,000 subscriber mark, Jamie has accumulated nearly that many more fans since that video’s upload three weeks ago. The below video mentions this, and shows Jamie as a vlogger who is hyper aware of his genre and the nuances therein.

 

{link no longer active}

2. TrentAndLuke

  • SlateScore: 478
  • Total Subs: 29,405
  • Monthly Views: 44,062

Noting that “this channel will just be videos of us,” Trent and Luke plant themselves firmly in the vlogosphere, where they reveal personal information (like their “bedroom secrets,” below) and otherwise bare their souls online.

 

 

1. Beckie0

  • SlateScore: 534
  • Total Subs: 170,634
  • Monthly Views: 7,604,370

Easily coming out on top of the emerging vloggers list, this vlogger has already drawn her life and hosted a meetup, attended by fans who tune into videos in which Rebecca Brown asks the big questions in life, like, “Is happiness a choice ” and “Why shouldn’t I wear a low cut top ” (the latter exploring the very important topic of sexual harassment and is embedded below for your personal contemplation).

 

This article was originally posted on VideoInk and is reposted on [a]listdaily via a partnership with the news publication, which is the online video industry’s go-to source for breaking news, features, and industry analysis. Follow VideoInk on Twitter @VideoInkNews, or subscribe via thevideoink.com for the latest news and stories, delivered right to your inbox.

YouTube data provided by Outrigger Media’s OpenSlate platform and Emerging Talent Tracker, which ranks rising YouTube channels by a measure of influence.