Activision Blizzard (ATVI) has long been known as a maker of popular console games such as Call of Duty and World of Warcraft. But lately, the company is moving to change the way it releases some of its back catalog of titles. On a Fool Live episode recorded on March 31, Fool contributor Brian Feroldi discusses the game maker's new strategy and whether it will pay off for shareholders.
Brian Feroldi: With that, I'm going to be starting things off with Activision Blizzard. Ticker symbol here is ATVI, big video game maker. Fool favorite, have been dominating for years. Recent news out of this company is that they are rereleasing several of their new franchises to mobile. This includes Crash Bandicoot On The Run, which has been around for more than 20 years, I believe. I think a 25-year anniversary is coming up, Crash Bandicoot On The Run. They're going to be making this a free-to-play game on iOS and Android.
This is a strategy that's actually worked really well for them with some of their other games, such as Call of Duty, that's a big push for this company, used to get it out for free, monetize it that way and build the fan base for free, and then get them to spend. Other games they are working on are bringing to other systems include Diablo 2, as well as many of Blizzard's older games. These numbers clearly show this strategy is working.
Last quarter, revenue grew 25 percent to 2.4 billion. That blew past management's guidance of two billion dollars on net bookings. All-time high at three billion, earnings per share jumped 45 percent. Not bad for a company of this size. They raised dividend 15 percent. They launched a new four billion dollar share repurchase program. The three standout games were exactly what you would expect. World of Warcraft, Call of Duty, and Candy Crush all earned more than one billion dollars in net bookings during the year. Management is confident that it will get two more franchises to a similar level of sales in the next few years. The company is estimating its top-line growth rate is going to slow in the next year as it's going up against tougher comps.
This is a company that under-promises and over-delivers, so we'll see how they come in there. But that will be definitely the thing for investors to watch moving forward.
