The news was so huge that it made the headlines everywhere. Even people not privy to the video game industry repeatedly saw it on their timeline: on January 18, 2022, Microsoft announced its intention to buy Activision Blizzard for the comfy sum of $68.7 billion. Comfy and historical, as it is the biggest deal ever struck in the history of video games.
And to think that it all started with just Activision in 1979, when a group of disgruntled Atari game developers decided to create their own studio as they were fed up by how Atari treated them. It paved the way as the first “third-party” game development company, making games for Atari as an independent company. Unfortunately, the studio suffered through 1983-1985 thanks to the 1983 video game crash. The latter was triggered when several other video game companies tried to replicate Activision’s success by creating and publishing their own games, even if they were lacking the experience and expertise to do so. This period was followed by numerous transformations, not just in name but also in business model, and Activision (then Mediagenic) ended up crawling under a mountain of debts. It’s now 1991 and enter Bobby Kotick, an investor interested in the financial potential of the video game industry: he bought Mediagenic, renamed it Activision and restructured the company in a way that would pay off all its debts. By 1997, Activision was profitable again and ready to become one of the biggest video game companies in the world.
Kotick then got worried that the company did not have a title for the massively multiplayer online market and its opportunities to generate a constant revenue through microtransactions, subscriptions, and passes. He then approached Vivendi, which had under their umbrella the famous Blizzard Entertainment studio and their successful World of Warcraft. Activision Blizzard saw the light of day in July 2008, later on acquiring King in 2016 and becoming the largest game company in the West. And now, it all belongs to Microsoft.
All that said, it’s been quite a journey for the company so let’s take a look at the most significant Activision Blizzard statistics and facts you should know about. After this, another interesting piece we have about the video games industry statistics might interest you gaming nerds out there.
Yes, a veteran amongst veterans, Activision boasts 43 long years in the video game industry. The company saw all the ebbs and flows in the gaming world and went through quite a number of ordeals itself. Often imitated, but never matched (no, really: a global crash occurred because of that particular reason), Activision will forever be in gamers’ memory as one of the real OGs and precursors of the modern video game industry. Kaplan, Whitehead, Crane, and Miller enforced the idea that game developers were “artistic visionaries” and deserved to be recognized too.
In 1991, Activision was bought for $500,000 by Bobby Kotick and a group of investors.
(Source: Institutional Investor)
- The games produced by Crane, Kaplan, Miller, and Whitehead, the four programmers who founded Activision, were responsible for 60% of Atari’s total revenue.
- They only received funding from Sutter Hill Ventures: a little less than $1 million. Three years later (around 1982), Activision was worth more than $300 million.
- In March 1983, the company finished its fiscal year with $157 million in sales.
- During the video game crash, their revenue dropped from $50 million in mid-1983 to $6-7 million in 1984 (quarterly revenues).
- In 1991, after all, original founders left the company, and it was now Mediagenic and dealing -mostly- in business software programs, the company ended up with over $60 million in debt.
- Bobby Kotick bought it for half a million while knowing that Activision, as a name and a brand, was actually worth $50 million.
- Under Kotick’s management, the new Activision successfully raised around $40 million in investments.
- By 2009, 18 years after Kotick bought the company, it generated a revenue of $3 billion and was worth $12.3 million.
- Between 1997 and 2008, Activision made around 25 acquisitions. Most of those were video game studios.
Activision started as a powerful statement about the role and importance of programmers/game makers in the industry. Not only were the most good games on Atari from those four men, but their games were still the talk of the town on Atari even after they left to found Activision. And even if Atari was not grateful for their work and continued harassing them, the public sure still remembers them. If you know your gaming history, you know that most games on Atari were terrible: visually appalling and poorly structured. Even back then! A true tour-de-force showing Activision’s strength as a brand was the fact that, after buying the studio for peanuts, Bobby Kotick was able to revive it by mostly using the name Activision. Now, the man has no interest whatsoever in video games and is a terrible person, but he did save the company thanks to his keen sense for business and money-making schemes. He flourishingly navigated between investors, investments, acquisitions, and trends on the market, while clearing that debt and making more money in the process. Crane, one of the original founders, said of the new Activision that he was happy to see it thrive, but could not find the original values in it.
In 1981, Activision released Kaboom! on Atari, and the game sold one million copies, becoming their first million-seller.
- Pitfall was released in 1982 and sold over four million copies.
- Under Kotick’s management, Return to Zork sold more than one million copies as the businessman recognized the worth of the prequel.
- Activision’s arcade library was unearthed and released on Windows 95, selling 200,000 copies. The remake of Pitfall sold more than one million copies.
- Released in January 1994 after starting from scratch a second time, MechWarriors 2 sold 500,000 copies in only 3 months (a feat back then). In total, the MechWarriors 2 franchise brought home $70 million in sales.
- The Guitar Hero series of games has sold more than 25 million units, generating $2 billion in retail (meaning that revenue from DLCs is not included).
- By 2009, and after the release of its 8th game, the Tony Hawk franchise had brought in $1.6 billion to Activision.
- With over 400 million copies sold, the Call of Duty franchise was the biggest title owned by Activision (April 2021). It also raked in over $15 billion since 2003 and the release of the first game.
Activision was privy to successful games right from the start. The four founders knew their business and their craft. They knew how to fully take advantage of the console, and they knew how to present their games and offer different types of gameplay. It is no surprise that their title could even reach the million copies milestone. And that desert crossing, full of nothing but dryness and debts, was not enough to bury the name. Luckily, not only the new CEO, Kotick, knew how to deal with money, but (surprisingly) also had an eye for promising titles. The man did say that video games were a waste of time, after all. Under him, one of the biggest franchises in the video game industry came to be: today, Call of Duty still enjoys quite the fame and a new studio has even been created just to take care of the mobile version. Kotick also made sure to acquire good smaller studios with interesting IP (intellectual properties) to add to Activision’s catalog. Tony Hawk and Guitar Hero started with Neversoft and Red Octane, respectively.
Blizzard is one of the most popular and well-respected video game companies in the industry and in several communities. It has proved itself time and time again and has garnered a loyal fanbase. Not just for its MMO World of Warcraft, but also for most of its other games. Games that defined a generation of new and old players and gave more light to certain genres that were not given enough love. The company has a special place in people’s hearts and is still creating, as much as possible, even with the restrictions coming from Activision. It has released new expansions for World of Warcraft and even successfully dabbled in the shooter genre with Overwatch. They also tried their hands at a card game (well-received) and have a new Diablo in their oven (it has been there for a while now). Nowadays, the company is divided into small teams, each focused on a specific franchise or type of game.
Activision merged with Blizzard after the former closed a deal of $18.9 billion with its parent company Vivendi.
(Source: The Conversation)
- To fund the company, then called “Silicon & Synapse”, each of the three founders (Morhaime, Pearce, and Adham) put $10,000 on the table. Morhaime contributed $15,000, loaned by his grandmother.
- In 1994, they sold the company to Davidson & Associates for $7 million. They were free to do as they wished, without the firm controlling their every move.
- In 1998, after passing through different hands, Blizzard’s parent company at the time decided to sell all its software division to Havas SA, a French company belonging to Vivendi. Those four companies, among which Blizzard, were sold for $800 million.
- By 2002, Blizzard accounted for 10% of Vivendi’s games division’s revenue, making $750 million annually.
The origin story of Blizzard Entertainment is a bit tumultuous. The studio is certainly well acquainted with passing from one owner to the other. It even ended up depending on one that was not at all related to video games and did not know how to deal with the industry. It caused some friction in the company, and several key figures left, feeling their creativity being restrained and ignored. But, Blizzard has always been active in the gaming scene. And even when under pressure, due to personnel leaving and bosses not knowing what they were talking about, the studio was still producing hits after hits. World of Warcraft made its début right when Vivendi was entertaining the idea of selling their whole video games division and changed their opinion thanks to Blizzard. From small and humble beginnings to legend in the industry.
Blizzard’s best year was in 2016 when the studio made $2.4 billion in net revenue.
- 2017 and 2018 also reached the $2 billion threshold by scoring $2.139 billion and $2.291 billion respectively.
- Its two weakest years were in 2007 and 2013 when it raked in $1.107 billion and $1.124 billion respectively.
- Surprisingly, 2020 with all its lockdowns and quarantines did not reach $2 billion: it was almost there with $1.905 billion. But considering the fact that 2019 brought home $1.719 billion, it WAS an improvement.
- From July 2021 to September 2021, the company made $478 million. The release of the remake of Diablo II was a boost.
If it is true that the numbers are not what they used to be, they are far from being bad. Blizzard Entertainment, whether before or after Activision, has always been quite healthy. Plus, the loss is not as drastic as one could think. At least, monetarily -sort of. They are, however, losing millions of players little by little. Even if fans voiced several complaints regarding the poor updates of certain games and the fact that certain titles have been completely forgotten, they still remain loyal. Can you believe that World of Warcraft is still attracting millions of players each month? After 18 years!
As of 2016, World of Warcraft has generated over $10 billion in revenue.
(Source: Game Revolution)
- By 2009 (when Activision was about to buy Blizzard), World of Warcraft generated $1.1 billion in annual sales and had over 11 million subscribers.
- As of May 2012, Diablo has sold 24.8 copies worldwide. That number does not include the 30 million copies of Diablo III, nor the ones from the remastered version of Diablo II that was released in September 2021.
- Diablo II generated $50 million in its first month of release, meaning that 1 million copies were sold since it was $50/copy. The expansion released in 2001 also sold 1 million copies.
- As of 2018, Hearthstone has over 100 million registered users, and it has been estimated that the game was making $600 million per year.
- In 2019, Overwatch has achieved a total of $1 billion in player spending only, as the game registered 60 million users. If you are curious about Overwatch, our article is digging a little deeper into more numbers and facts.
- In 2018, Blizzard boasted an average of 37 million monthly active users. In 2019, it was around 32 million monthly active users, dipping to around 31 million in 2020. 2021 was more severe, with 27 million monthly active users for Blizzard.
Of course, this is not all: let’s not forget the MOBA, Heroes of the Storm, that received raving reviews. Or even the classic among classics, Starcraft which sold over 15 million copies. Blizzard’s games have a high nostalgia factor. A lot of players grew up playing those and did not really give up as adults. Diablo IV has been in development for a while now, and it is safe to assume that it will be a smashing success. Not just for old heads, but also for younger players. Those that were into vintage gaming and those who enjoyed the remastered version of Diablo II released in 2021. Starcraft might never have a new game, though, as Activision took it out of the list of games Blizzard was allowed to work on.
King, formerly known as Midasplayer, is a Maltese video game developer/publisher company, that specializes in social and casual games. The company had a difficult start but started making millions annually before they even moved to Facebook and mobile devices. They had their own website featuring their own browser games and a loyal community. However, for all the looks of condescension Candy Crush Saga was getting from hard gamers, the game was crushing the competition and making an insane amount of money. The secret behind it might never be known because King is still raking in millions thanks to it. This is an opportunity Activision Blizzard did not miss, as the company had no real handle on the mobile gaming industry at the time (now it also has Call of Duty: Mobile).
Activision Blizzard acquired King in February 2016 for $5.9 billion.
- It started as a website named Midasplayer.com, which went almost bankrupt in 2003. The company raised $43 million by selling a huge stake to two firms.
- Rebranded King.com in 2005, the web portal had around 200 games. By 2009, it was making $60 million per year.
- In October 2011, they released Bubble Witch Saga, another match-3 of theirs, on Facebook/web portal, and it was a hit. By January 2012, it had 10 million users. With 30 million users, King had the second-biggest player base. Candy Crush Saga was released in April 2012 and by the end of 2012, had 5.2 million unique users.
- A few months later, both games were released on iOS where they quickly gathered a good player base. Revenues jumped from $62 million in 2011 to $1.88 billion in 2013.
- In 2014, King made a total of $2.6 billion, and Candy Crush Saga accounted for half of that sum.
- In 2013, King removed advertising in-game to provide an uninterrupted experience to players. Advertising represented 10% of the total revenue in 2012, but only 1% in 2013.
- King makes a minimum $500 million dollar per quarter. 2021 was an excellent year as the company continually made over $600 million per quarter.
When King decided to give Facebook a go at Facebook, people were a bit puzzled by this company that appeared out of nowhere in this really new and nebulous niche that was Facebook games. Only, King had been around for 7 years already, polishing its skills in casual games, easy to play, easy to understand, and easy to access. Not only did they find the perfect crowd on Facebook where all people come from all walks of life, but that also showed them that they might have a chance in the burgeoning mobile gaming industry. And boy, did they get it right! Even at their lowest, their annual revenues always reach $1 billion. King has a big portfolio of games following the same model (match-3 mostly), but their most popular and most lucrative is, of course, Candy Crush Saga. If you are curious about Candy Crush Saga, we have an article full of details and information about the match-3 game.
Present-day Activision Blizzard
Activision Blizzard is a deal that came out of nowhere. But also one that gave each party exactly what they wanted: Activision wanted to have a successful MMO license and Vivendi was trying to gain more success as their games would not always strike gold. The acquisition of King in 2016 was another unexpected deal by Activision Blizzard. Those mergers turned Activision into the largest video game company in Europe and the Americas, with unrivaled monetization and revenues. If the company continued to enjoy a wild success, the fact that its CEO was in it for the money, rather than a passion for video games, dragged the company through the mud. The company is under investigation because of big controversies involving sexual harassment, toxic workplace policies, discrimination, and unjustified terminations by Kotick in an attempt to silence the employees.
Activision Blizzard’s market cap is $59 billion.
(Source: Companies Market Cap)
- As of July 2021, its market capitalization is estimated to be around $71.6 billion.
- After the merger, Vivendi was still a major stakeholder, owning 52% of the company.
- It all changed in 2013 when it was announced that Activision Blizzard purchased Vivendi’s shares in the company for $5.83 billion. After the deal concluded, AB was now an independent company.
- At its inception, the company was already valued at $18.9 billion.
- 2020 was the best year for Activision Blizzard, as the company made an astounding $8 billion in net revenue. It took 2018’s spot: a total of $7.5 billion was generated that year.
- Of course, the beginnings in 2005 were humble: ABK made $780 million. But it quickly climbed to higher heights and by 2008, it was already generating $3 billion. Since 2016, ABK hovers between $6 billion and $8 billion.
Activision Blizzard is, of course, a titan. Kotick made sure to have a toe-dipping in most sectors of the video game industry. The franchises owned by the company are all multi-million dollar babies, with more than 10 being privy to the billion-dollar club. With all these acquisitions, ABK has now between 500 million and 352 million MAU. When looking at how ABK is making money, we can see that it quickly focused on microtransactions, subscriptions, royalties, and other miscellaneous sources, with direct product sales never increasing throughout the years. Likewise, it is through digital channels that they generate most of their revenue. Retail channels come in second place. Activision Blizzard placed itself right after Tencent and Sony as the biggest video game companies. And now that Microsoft joined the fray, we could only wonder where it will leave the others.
To sum up
The video game industry is already up in arms and all shaken up by that deal between ABK and Microsoft, when it has not even been finalized. It should only happen in 2023, but it is as clear as water that it will reach that conclusion. The news was a surprise because of the amount at stake, and not because Microsoft was buying them.
It is notorious that, tired of always being behind Nintendo and Sony in sales and player base, Microsoft decided to invest in its pass rather than focusing on its catalog of original IPs. They have, for example, quickly bought Mojang (Minecraft) and ZeniMax Media (and its family of studios, among which you could Bethesda). Not only does that give them the right to make those games exclusive to their platforms, but they can also incorporate them in their catalog only accessible via their pass. Buying a company like ABK means access to their IPs, means lots of big franchises with big fan bases, and means another way to force people to flock to the pass because “for this month only, you’ll be able to download all the Starcraft games”. A tactic, Phil Spencer, Microsoft Gaming’s CEO is acquainted with.
On the other side, Microsoft swoops in like a savior, ready to save ABK from that torment Kotick threw the company in, thanks to his lack of human-managing skills. Everyone agrees: their first cleanup work will have to do with firing Kotick and restructuring the work environment. Other than that, players are also worried about how it will change the policies under which ABK works and if certain games are bound to disappear. Not only that, but it is clear that Microsoft has opened the door to something darker: rather than a race towards quality products, huge companies will not race to be the first to acquire studios. The monopoly that it might create is a source of worry for all the communities.
- “DONE DEALS – Cash Of The Titans”. Institutional Investor, 2008, https://www.institutionalinvestor.com/article/b150q7btcgvc0j/done-deals-cash-of-the-titans.
- “Activisionaries: How Four Programmers Changed The Game Industry”. Game Informer, 2022, https://www.gameinformer.com/b/features/archive/2013/02/26/activisionaries-how-four-programmers-changed-the-game-industry-forever.aspx.
- “Top 10 Best-Selling Atari 2600 Games”. IGN, 2008, https://www.ign.com/articles/2008/08/26/top-10-best-selling-atari-2600-games.
- “Gamasutra – The History Of Activision”. Gamasutra, 2022, https://www.gamasutra.com/view/feature/1537/the_history_of_activision.php?print=1.
- Sengstack, Jeff. “Reorganized, Redefined and on the Rebound”. NewMedia, June 24, 1996, https://web.archive.org/web/19980128082919/http://www.newmedia.com/NewMedia/96/09/screens/Activision_Rebound.html.
- “Two Incredible Milestones: Call Of Duty: Warzone Reaches 100 Million Players, Premium Call Of Duty Game Sales Eclipses 400 Million”. Call of Duty Blog, 2021, https://www.callofduty.com/blog/2021/04/Incredible-Warzone-and-Game-Sales-Milestones.
- Carless, Simon. “Kotick: Guitar Hero Now $2 Billion Franchise”. Gamasutra.Com, 2022, https://www.gamasutra.com/php-bin/news_index.php?story=23537.
- Gallagher, Dan. “Kotick Changes The Game At Activision Blizzard”. Marketwatch, 2022, https://www.marketwatch.com/story/bobby-kotick-changes-game-activision.
- “Activision’s Unlikely Hero”. Forbes, 2022, https://www.forbes.com/forbes/2009/0202/052.html.
- “Microsoft Buys Activision Blizzard: With The Video Game Industry Under New Management, What’s Going To Change?”. The Conversation, 2022, https://theconversation.com/microsoft-buys-activision-blizzard-with-the-video-game-industry-under-new-management-whats-going-to-change-175433.
- “Mike Morhaime Founded Blizzard Thanks To A $15,000 Loan From His Grandmother”. PC Gamer, 2017, https://www.pcgamer.com/mike-morhaime-founded-blizzard-thanks-to-a-15000-loan-from-his-grandmother/.
- “Blizzard Net Revenue 2020”. Statista, 2022, https://www.statista.com/statistics/269664/blizzards-annual-revenue/.
- “King, Blizzard Push Activision Blizzard To Q3 Growth”. Gamesindustry.Biz, 2022, https://www.gamesindustry.biz/articles/2021-11-02-king-blizzard-push-activision-blizzard-to-q3-growth.
- “Blizzard Entertainment”. Encyclopedia, 2022, https://www.encyclopedia.com/books/politics-and-business-magazines/blizzard-entertainment.
- “The Highest-Selling Games Developed By Blizzard Entertainment Ranked (&Amp; How Much They Sold)”. Game Rant, 2021, https://gamerant.com/highest-selling-games-blizzard-entertainment-ranked-how-much-sold/.
- Leack, Jonathan. “World Of Warcraft Leads Industry With Nearly $10 Billion In Revenue – Gamerevolution”. Game Revolution, 2017, https://www.gamerevolution.com/features/13510-world-of-warcraft-leads-industry-with-nearly-10-billion-in-revenue#/slide/1.
- “Blizzard Celebrates 100 Million Hearthstone Players With Free Card Packs For Everyone”. PC Gamer, 2018, https://www.pcgamer.com/blizzard-celebrates-100-million-hearthstone-players-with-free-card-packs-for-everyone/.
- “Activision Blizzard Becomes “Largest Game Network In The World” With Candy Crush Dev Buyout”. Gamespot, 2016, https://www.gamespot.com/articles/activision-blizzard-becomes-largest-game-network-i/1100-6435014/.
- Mac, Ryan. “Candy Blush: King.Com Cofounder And Investor Gave Up Billions With Early Share Sale”. Forbes, 2022, https://www.forbes.com/sites/ryanmac/2014/03/18/candy-blush-gaming-company-cofounder-and-investor-gave-up-billions-with-early-share-sale/.
- “Candy Crush Saga Players Spent £865M On The Game In 2014 Alone”. The Guardian, 2015, https://www.theguardian.com/technology/2015/feb/13/candy-crush-saga-players-855m-2014.
- “King Quarterly Revenues 2021”. Statista, 2022, https://www.statista.com/statistics/288944/king-digital-entertainment-quarterly-gross-bookings-and-revenue/.
- “Activision Blizzard Annual Revenue 2020”. Statista, 2022, https://www.statista.com/statistics/269660/activision-blizzards-net-annual-revenue/.
- “5 Companies Owned By Activision Blizzard”. Investopedia, 2022, https://www.investopedia.com/5-companies-owned-by-atvi-5093046.