Yahoo Finance Why Digital Revenues Are Key to Activision’s Growth
What's Driving Activision Blizzard's Growth?
Massive move toward digital products
Like other product categories, the gaming space has also seen a transition toward digitalization. In November 2015, Activision Blizzard (ATVI) announced the signing of a definitive agreement with King Digital Entertainment (KING), a major player in the online gaming sector. Zynga (ZNGA) also has a strong online presence.
Digital revenue accounted for 64% of total revenue in 1Q16
Earlier this month, Activision Blizzard (ATVI) announced its 1Q16 results and reported revenues of $1.5 billion. This was a YoY (year-over-year) increase of 13.9% compared to revenues of $1.3 billion in 1Q15. Digital revenues accounted for 64% of total revenue, or $926 million, in 1Q16. In comparison, digital revenues accounted for 46% of revenues in 1Q15.
Digital revenues have grown rapidly for peer company Electronic Arts (EA) as well. In 1Q16, digital revenues rose by 18.3% YoY (year-over-year) to $712 million from $602 million in 1Q15 for the firm. EA generates ~$1 billion a year from FIFA.
Activision accounts for 4.2% of the iShares North American Tech-Software ETF (IGV).
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