ActiBlizz Q2: Titan being re-vamped from sub-based MMO

News by Stephany Nunneley-Jackson Former News Editor

Published on Aug. 1, 2013

Activision-Blizzard boss Mike Morhaime has confirmed during a Q2 results call - for the period ending June 30 - that Titan is being "re-envisioning," and will "likely not be a sub-based MMORPG."

Q2 FY2013 at a glance

Project Titan will likely not be a sub-based MMORPG as Blizzard decides on a "new direction" for it.

World of Warcraft ended Q2 with 7.7 million subscribers.

On September 3, Blizzard expects to release Diablo 3 for PS3 and Xbox 360.

The firm confirmed it will announce something related to Diablo 3 during gamescom.

The Skylanders franchise has generated, life-to-date, over $1.5 billion in sales worldwide.

Skylanders Giants was the #1 best-selling console, hand-held title in dollars for the first six months of 2013 in both North America and Europe.

For the first six months of 2013, Skylanders Giants and Black Ops 2 were the top-two best-selling games in North America and Europe combined.

Activision Blizzard was the #1 third-party publisher in North America and Europe combined for the first six months of 2013.

Revenue for the quarter came in at $1.05 billion, a decline compared to the same period in 2012 when $1.08 billion was reported.

Digital revenue came in at $387 million, and accounted for 37% of total revenue.

A new direction for Project Titan

During Activision Blizzard's call to investors this evening, Blizzard's boss said he will be moving some of Project Titan's team members over to other titles in the works with a more immediate release in sight while a "new direction" is decided for Titan.

Morhaime said he was unable to discuss the actual details of Project Titan at present, but he did reiterate "it has not been officially announced or does it have a projected release date."

He also said the team has gone through this "type of iterative process several times in the past," and the team remains committed to the project's quality.

Morhaime also confirmed a Diablo 3 related announcement for gamescom.

World of Warcraft ended Q2 with 7.7 million subscribers, numbers which stood at 8.3 million back in May when the firm reported its Q1 financials. The 1.3 million decline was at the time attributed to the Chinese market’s decrease in casual engagement.

Morhaime said during the call to investors this evening that Q2's 600,000 player decline was split evenly between east and west.

"WoW continues to be the best MMORPG available and still has a long life ahead of it," said Morhaime. "Players come and go, and we recognize there is a lot we can do to make coming back an easier transition. We look forward to releasing Siege of Orgrimmar, the next update to the game in the coming weeks."

Blizzard's first free-to-play iPad game, Hearthstone, is making "great progress" he continued, and will the first title the firm has announced and shipped within the same year.

President and CEO of Activision Publishing, Eric Hirshberg, said Call of Duty digital sales grew 100% year over year, and while pre-orders for CoD: Ghosts were lower than expected due to consumers not knowing which platform to play on during the transition, they were still double that of the original Black Ops.

"Our quantitative consumer research indicates that hesitation among past COD pre-orderers is primarily due to not knowing which platform they will be playing on, which is natural at this time in the console transition," he said.

As of July 31, 2013, the Skylanders franchise has generated, life-to-date, more than $1.5 billion in worldwide retail sales.

The numbers, look at all the numbers

Last week, Activision stated in a call to investors it expected to report revenue of $1.5 billion for the quarter and for the full year expects 4.3 billion in revenue.

The firm finished the quarter out with $1.05 billion in revenue, compared with $1.08 billion year-over year. The firm said it earned $387 million through digital offerings, which accounted for 37% of the company's total revenue.

Activision CFO Dennis Durkin said on the call to investors, the Q2 decline in revenue was due to not having a comparable release during the period.

“We are pleased with our second-quarter results, which confirm the preliminary results we released last week when we announced our transaction with Vivendi. The agreement we reached with Vivendi will make us an independent company and should deliver meaningful earnings per share accretion to our shareholders," said CEO Bobby Kotick in a prepared statement.

"Our solid performance across our franchises and strong digital sales, including continued significant growth this quarter in our Call of Duty downloadable content business over the previous year, validate our belief that we will enter this new period of independence in a position to leverage the flexibility and focus that it provides.”

On July 25, Activision Blizzard announced that it reached an agreement under which the company will acquire approximately 429 million company shares and certain tax attributes from Vivendi, in exchange for approximately $5.83 billion in cash, or $13.60 per share acquired before taking into account any future benefit from these tax attributes.

In a related transaction, ASAC II LP, an investment vehicle led by CEO Bobby Kotick and Activision Blizzard Co-Chairman Brian Kelly, will purchase approximately 172 million company shares from Vivendi for approximately $2.34 billion in cash, or $13.60 per share.

Following the completion of the transactions, which are expected to close by the end of September 2013, Vivendi will no longer be the majority shareholder, but will retain a stake of approximately 83 million shares, or approximately 12%.

Based on its second quarter results, Activision Blizzard is raising its full year outlook.