How the Pandemic Helped a Video Game Giant Grow Its Bottom Line

February 9, 2021 Updated: February 10, 2021


The Southern California game maker that makes Call of Duty, World of Warcraft and Candy Crush reported a stand-out year for 2020.

Net revenues for Activision Blizzard (ATVI) topped $8.1 billion for the first time and reached adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of more than $3.2 billion. Earnings per share were $2.82 in 2020.

Activision Blizzard is based in Santa Monica and has major operations in Irvine. The market capitalization of its equity is now slightly more than $78 billion.

Activision Blizzard is one of the many companies whose fortunes have benefitted from the pandemic. Its growing popularity could be attributed, in part, to people seeking more at-home entertainment while self-isolating. Video games have also become a more popular option during a time when many outside entertainment meccas—such as arcades, movie theatres, and theme parks—remain closed due to state-mandated orders.

Call of Duty is published by the company’s Activision division. Call of Duty “premium and free-to-play experiences across platforms sustained more than 100 million monthly active players.”

For the Activision division as a whole, the number of monthly active users (MAUs) was more than 128 million in 2020. Furthermore, comparing fourth-quarter 2020 to fourth-quarter 2019, “MAUs grew approximately 70% and time spent [playing] more than doubled.”

World of Warcraft is published by the Blizzard division. Overall Blizzard MAUs reached 29 million during fourth-quarter 2020.

Meanwhile, at the King division, which publishes the popular Candy Crush phone app game, King’s fourth quarter 2020 MAUs reached 240 million.

As a company, Activision Blizzard had more than 400 million MAUs in 2020 and has ambitions to “reach” a billion people.

For 2021, Activision Blizzard is guiding The Street toward expecting $8.23 billion in net revenues but the operating margin will grow from 34 percent in 2020 to 36 percent in 2021. This would translate to an improvement in earnings per share to $2.83.

Perhaps equally important for company shareholders, the company also approved a $4 billion plan to buy stock back from the public. The company had $8.82 billion dollars in cash and cash-like investments on the balance sheet at the end of 2020, a $3 billion dollar improvement from year-end 2019.

Tim Shaler is a professional investor and economist based in Southern California. He is a regular columnist for The Epoch Times, where he exclusively provides some of his original economic analysis.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.