SANTA MONICA, CA: Video-game publisher Activision Blizzard has seen higher than expected profits as opportunities grow following investment in e-sports and in-game advertising.
Activision Blizzard, which owns some of gaming’s biggest titles such as World of Warcraft and Call of Duty, as well as King, the mobile game developer responsible for Candy Crush Saga, last week reported Q4 and full-year results.
“2017 was an important year for us for preparation of our future growth initiatives,” CEO Bobby Kontick told investors, and he noted the potential of “ in-game advertising, consumer products, cinematic productions or e-sports; all of these support our communities and help to drive engagement”.
Gaming platforms are some of the most important media properties going forward. Both Alphabet, through YouTube Gaming, and Amazon, through Twitch, have invested heavily in e-sports. Part of its offer is the high engagement from viewers, in a way that bridges online and offline worlds.
In January, the company launched Overwatch League, which could be accessed only through Twitch or Blizzard’s own site, following an exclusive agreement. The deal helped it reach number 1 on Twitch’s most-watched games list in the opening week, attracting more than 10m views in the first weekend.
Yet the advertising focus remains on King, the mobile games maker. King CEO Riccardo Zacconi noted that the company was integrating ad formats into gameplay as a future growth opportunity.
“We are investing in our own ad tech infrastructure. In 2017, we’ve seen early success with a dozen of global brands buying advertising across a number of territories in five different games,” he said.
In future, however, the company will begin extending its internal ad products and will begin to work towards advertising on e-sports.
“We have several key initiatives underway where building capability in one part of the business brings capability over time,” said president Coddy Johnson, adding that for the Overwatch League, “a professional city-based league approach … could logically go on to support other e-sports franchises. Ads are similar.”
CFO Spencer Neuman added the company’s expectation that “in-game revenues [would] be a primary driver of our growth for both the top and bottom line”. following a record of over $4bn spent in-games by players over the year.
Sourced from Seeking Alpha, WARC, Motley Fool; additional content by WARC staff