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Is OverWatch Dead?
I went through ATVI's Q3 report to find out.
1/
I went through ATVI's Q3 report to find out.
1/
For those who are not familiar, ATVI is the stock ticker symbol for Activision Blizzard.
The company is comprised of 3 divisions
-Activision
-Blizzard
-King
(see images for titles under each)
I'll be referring to each of these divisions
2/12
The company is comprised of 3 divisions
-Activision
-Blizzard
-King
(see images for titles under each)
I'll be referring to each of these divisions
2/12
OW had 10 million Monthly Active Users (MAUs) through the Quarter.
This is more than I would guess but also only accounts for ~1/3rd of Blizzard's (just that division, not all of ATVI) MAUs.
3/12
This is more than I would guess but also only accounts for ~1/3rd of Blizzard's (just that division, not all of ATVI) MAUs.
3/12
Inside of Blizzard, you can reasonably assume that by MAUs, OW is 3rd in line.
Both WoW and Hearthstone (HS) continue to have massive player bases.
4/12
Both WoW and Hearthstone (HS) continue to have massive player bases.
4/12
Of the 3 divisions, Blizzard earns the least in Net Revenue and has the lowest operating margin...
I think this is because of OW and OWL.
How do I come to that conclusion?
Well, both WoW and HS in theory should be EXTREMELY high margin.
5/12
I think this is because of OW and OWL.
How do I come to that conclusion?
Well, both WoW and HS in theory should be EXTREMELY high margin.
5/12
Neither requires as much technical resource as OW (this is an assumption, not a fact).
So based on that + the fact that WoW & HS have higher player counts,
We can assume that OW & OWL is the drag on Blizzard.
6/12
So based on that + the fact that WoW & HS have higher player counts,
We can assume that OW & OWL is the drag on Blizzard.
6/12
This means that OW from a financial standpoint falls behind:
CoD, CoD Mobile, Wow, HS, & Candy Crush...
So at its best, likely the 6th best revenue driver for ATVI
BUT...its possible it requires the 2nd most resource (behind CoD).
Not good.
7/12
CoD, CoD Mobile, Wow, HS, & Candy Crush...
So at its best, likely the 6th best revenue driver for ATVI
BUT...its possible it requires the 2nd most resource (behind CoD).
Not good.
7/12
Opportunity cost is a heavy consideration. Could those resources be put to better use?
I believe the answer to be a resounding YES. However, due to the public-facing commitment from ATVI for OW and the OWL, my hunch is that they will keep it alive for some time.
8/12
I believe the answer to be a resounding YES. However, due to the public-facing commitment from ATVI for OW and the OWL, my hunch is that they will keep it alive for some time.
8/12
Likewise, if I had spent $20,000,000 on an OWL franchise spot, how comfortable am I in that investment when it's the publisher's 6th revenue priority?
Is that $20mm of cash + annual operating expenses the BEST use of that cash for an esports org?
9/12
Is that $20mm of cash + annual operating expenses the BEST use of that cash for an esports org?
9/12
IMO, I'd say no.
If I owned a CoD and OW franchise, I'd rather use those resources to beef up the content and brand around CoD.
After all, in the Q3 report, ATVI mentions CoD 10 times to OWs 4.
Its just a much stronger game.
10/12
If I owned a CoD and OW franchise, I'd rather use those resources to beef up the content and brand around CoD.
After all, in the Q3 report, ATVI mentions CoD 10 times to OWs 4.
Its just a much stronger game.
10/12
It's not that OW is a bad game or that its "dying".
It's just that I think ATVI thought it was going to be this massive thing and it's just....not.
The cartoony aspect of the game + it's "everyone gets a trophy" mentality, while good in spirit, missed the mark.
11/12
It's just that I think ATVI thought it was going to be this massive thing and it's just....not.
The cartoony aspect of the game + it's "everyone gets a trophy" mentality, while good in spirit, missed the mark.
11/12
So is OW dead? No. Is it growing? Not much. Is it as profitable (or profitable at all?) as other ATVI titles? No.
All things considered, is it a top choice to be investing time or money into? No.
If you made it this far, thanks for reading.
Where did I miss?
12/12
All things considered, is it a top choice to be investing time or money into? No.
If you made it this far, thanks for reading.
Where did I miss?
12/12
