Microtransactions made up 61% of Activision Blizzard's 2021 income

Cal Jeffrey

Posts: 3,491   +1,040
Staff member
Bottom line: If you would like to see microtransactions go the way of the dodo, don't look to Activision. This year the publisher broke record earnings numbers, including in-game sales. In fact, cosmetics, DLC, subscriptions, and loot boxes were the majority of Activision Blizzard's income by a fair margin.

Activision Blizzard released its fourth-quarter earnings and 2021 financial results earlier this week. According to the numbers, the company had record-breaking growth. Net revenues in Q4 were $2.16 billion, a seven-percent increase over the third quarter but a 10-percent year-over-year decline.

While the dip for the quarter is unfortunate, the beleaguered company did well overall. Activision ended its 2021 fiscal year earning $8.8 billion—a nearly $800 million windfall over FY2020, which was also a record breaker. These figures are surprising considering the ongoing sexual harassment proceedings and the announcement of significant delays for flagship games Diablo IV and Overwatch 2. Couple that with the fact that sales for the Call of Duty franchise were down last year, and it's a wonder Activision Blizard had its best year ever.

"I'm so incredibly proud of our teams for their commitment and passion as we continued to engage the world through epic entertainment in 2021," said Activision Blizzard CEO Bobby Kotick in a statement. "As we look to the future, with Microsoft's scale and resources, we will be better equipped to grow existing franchises, launch new potential franchises and unlock the rich library of games we have assembled over 40 years. Our 370 million players around the world and workplace excellence remain our focus. For investors, our recently announced transaction is the culmination of three decades of providing superior shareholder returns."

Perhaps unsurprisingly, Activision's breadwinner was not even a game; it was microtransactions, as usual. The 2021 fiscal year recorded $5.1 billion for net in-game sales. This income includes DLC, WoW subscriptions, and any cosmetic items or loot boxes in any of its games.

That figure is a staggering 61 percent of Activision's total net sales and is a $250 million increase YoY. It is clear from these figures that microtransactions—at least with Activision—are here to stay.

"For the year ended December 31, 2021, Activision Blizzard's net bookings were $8.35 billion, as compared with $8.42 billion for 2020," read the report. "In-game net bookings were $5.10 billion, as compared with $4.85 billion for 2020."

Last year was the second consecutive year that Activision broke revenue records. For FY2020, net revenue amounted to $8.09 billion. It is no wonder that Microsoft is willing to fork over an industry record of $68.7 billion for the company.

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Dimitriid

Posts: 2,206   +4,245
Who are the *****s buying in game currency...

It's a numbers game: Call of Duty sells a lot of games. Like, a lot. On corners of the internet like this we can immediately identify microtransactions and loot boxes as the exploitative tactics that they are.

But just as you have a clueless uncle or grandma that knows nothing about technology or the internet, you've got millions of kids that don't know or care much about tech at all, but they do play Call of Duty.

The user base is so large there will be a lot of people to whom a game like CoD Warzone will be their very first exposure to any kind of gaming. They'll assume microtransactions and loot boxes are normal and just the way things work and at least a few of them will have more than occasional money to spend because well, kids in rich families also play games and if your parents are literal billionaires to them spending 10 bucks per month or 1,000 or 10,000 bucks per month on a game might as well be the difference from 1 cent or 10 cents to you: meaningless.

So if the games are popular enough, eventually, you will find the infamous "whales" that actually put down thousands of dollars into the game mechanics constantly,

This exact mentality is why I think in less than 10 years we will be seeing a headline that reads "Despite years of constant scandals, Microsoft's Activision division made 61% of it's revenue through NFT commissions."
 

mrSister

Posts: 74   +101
Workplace excellence? Did he mean like in the Blizzard part of Activision-Blizzard?
 
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brucek

Posts: 1,126   +1,670
PC gamers may not know or care or think it's a big deal, but Activision owns King who owns the Candy Crush franchise. That is probably Activision's largest and most important "game" and it generates a LOT of microtransactions.
 

Theinsanegamer

Posts: 3,364   +5,591
Gamers are the biggest, and perhaps the dumbest, consoomers on the planet.
It's a numbers game: Call of Duty sells a lot of games. Like, a lot. On corners of the internet like this we can immediately identify microtransactions and loot boxes as the exploitative tactics that they are.

But just as you have a clueless uncle or grandma that knows nothing about technology or the internet, you've got millions of kids that don't know or care much about tech at all, but they do play Call of Duty.

The user base is so large there will be a lot of people to whom a game like CoD Warzone will be their very first exposure to any kind of gaming. They'll assume microtransactions and loot boxes are normal and just the way things work and at least a few of them will have more than occasional money to spend because well, kids in rich families also play games and if your parents are literal billionaires to them spending 10 bucks per month or 1,000 or 10,000 bucks per month on a game might as well be the difference from 1 cent or 10 cents to you: meaningless.

So if the games are popular enough, eventually, you will find the infamous "whales" that actually put down thousands of dollars into the game mechanics constantly,

This exact mentality is why I think in less than 10 years we will be seeing a headline that reads "Despite years of constant scandals, Microsoft's Activision division made 61% of it's revenue through NFT commissions."
Everything here makes sense except for one thing: " you've got millions of kids that don't know or care much about tech at all, but they do play Call of Duty."

Kids dont have jobs. Kids are not the ones buying microtransactions.

That would be the 20-35 age range, the biggest group of gamers on the market, and the ones most likely to spend money on microtransactions. It's adults that dont have time to grind games and, rather then choose games that dont require grind, pay real world money to speed games up. Those are your whales spending thousands on free to play garbage.
 

Scrye74

Posts: 63   +109
Wow, that's interesting. It's almost like the government locked down everything then paid people to stay at home. If that had happened, people would have little to spend there money on except in-home entertainment and delivery services. I am surprised that Amazon and food delivery services didn't make record profits. Oh wait...
 

Neatfeatguy

Posts: 836   +1,446
My 9 year old gets mad that the wife and I won't let him spend money on micro transactions. He likes to play Roblox and constantly is asking to have Roblox giftcards so he can buy stuff on there and we won't let him.

I told him to enjoy the game for what it is. If having to buy fluff items in the game to make it feel worthwhile, then the game isn't worth playing. the fluff items are there to trick people out of money they don't need to be spending. The fluff items don't actually make the game play any differently. So, either enjoy the game as it is or stop playing it.

After that he stops pestering us for a while and a few months later I have to remind him.

Stupid people fund the microtransaction hysteria and keep just flushing their money away to these companies. I honestly believe that because of this these companies no longer have a brain to think about new ideas for games, they see the $$$ signs on the rehashed games that people keep sinking into the microtransactions. Why create new when the same old stuff still brings in mounds of cash from the same stupid people? Creating new might upset the flow of money....if there is that chance that the flow may slow, then the idea is bad and never used. So, why should the innovate? We don't give them any reason to do so.

Everything here makes sense except for one thing: " you've got millions of kids that don't know or care much about tech at all, but they do play Call of Duty."

My kids were always wanting to play games on my computer. I got tired of them using my computer so over the last 6 months I pieced together a solid gaming rig for them.

I wrapped up all the items as a big Christmas gift for them. They unwrapped them for Christmas and they were excited, they'd have their own gaming computer. They were excited until I said they get to help me build it.

My 13 year old daughter said, "Why? That's just stupid. Who would want to do something like that?" and walked away.
My 9 year old son said, "Oh. Okay....I guess." and he walked way to do something else.

The computer parts sat for about 3 weeks before I finally convinced the kids to help....the only helping they did was complain about it. I thought it might be fun to have them partake in a hobby I really enjoy (building computers) and getting them setup to use them, but they didn't want to do any work. Just complain, complain.....and complain more.

I got the kids to setup the standoff screws and remove all the thumb screws on the case so places were accessible for things like the PSU and the MB tray was removable to make mounting the heatsink easier. After that, they didn't want to handle anything else because it was "stupid". My daughter will piece together 3000+ piece Lego sets and put countless hours into them, but she couldn't be bothered to help build a computer. Anyway....I did pretty much all of it myself. The daughter hasn't used it once, but the son makes use of it on the weekends when we give him time to game.
 

Bl00dyMinded

Posts: 478   +726
Are we really surprised? You buy the $60 game and pay the monthly battle pass for another $10-20... That is just Call of Duty. Then alone with WOW you have monthly payments of $15 a month to just play not including all the in game stuff people pay for.
 

Lew Zealand

Posts: 2,147   +2,587
TechSpot Elite
My 9 year old gets mad that the wife and I won't let him spend money on micro transactions. He likes to play Roblox and constantly is asking to have Roblox giftcards so he can buy stuff on there and we won't let him.

I told him to enjoy the game for what it is. If having to buy fluff items in the game to make it feel worthwhile, then the game isn't worth playing. the fluff items are there to trick people out of money they don't need to be spending. The fluff items don't actually make the game play any differently. So, either enjoy the game as it is or stop playing it.

After that he stops pestering us for a while and a few months later I have to remind him.

Stupid people fund the microtransaction hysteria and keep just flushing their money away to these companies. I honestly believe that because of this these companies no longer have a brain to think about new ideas for games, they see the $$$ signs on the rehashed games that people keep sinking into the microtransactions. Why create new when the same old stuff still brings in mounds of cash from the same stupid people? Creating new might upset the flow of money....if there is that chance that the flow may slow, then the idea is bad and never used. So, why should the innovate? We don't give them any reason to do so.



My kids were always wanting to play games on my computer. I got tired of them using my computer so over the last 6 months I pieced together a solid gaming rig for them.

I wrapped up all the items as a big Christmas gift for them. They unwrapped them for Christmas and they were excited, they'd have their own gaming computer. They were excited until I said they get to help me build it.

My 13 year old daughter said, "Why? That's just stupid. Who would want to do something like that?" and walked away.
My 9 year old son said, "Oh. Okay....I guess." and he walked way to do something else.

The computer parts sat for about 3 weeks before I finally convinced the kids to help....the only helping they did was complain about it. I thought it might be fun to have them partake in a hobby I really enjoy (building computers) and getting them setup to use them, but they didn't want to do any work. Just complain, complain.....and complain more.

I got the kids to setup the standoff screws and remove all the thumb screws on the case so places were accessible for things like the PSU and the MB tray was removable to make mounting the heatsink easier. After that, they didn't want to handle anything else because it was "stupid". My daughter will piece together 3000+ piece Lego sets and put countless hours into them, but she couldn't be bothered to help build a computer. Anyway....I did pretty much all of it myself. The daughter hasn't used it once, but the son makes use of it on the weekends when we give him time to game.

Sounds familiar (lol, literally). Though the now-highschooler got that PC Building game last year and afterwards took an interest when I did the subsequent Biannual Great PC Dusting Blowout when we clean out the PCs and internal CPU temperatures go down 15C. Note to AMD Wraith users, if you use your computers in a dusty environment, those coolers block up airflow with dust pretty bad and send (in our cases) Ryzen 1600AF temperatures up 15C until you blow them out again and they're back to cool cucumbers.

Tower coolers in my 2 PCs and all the graphics cards (2x Nvidia, 2x AMD) seem less affected by this.
 

Mister_K

Posts: 2,162   +861
Who are the *****s buying in game currency...

I mean I spent way too much on WoW gold. Sad, I know. Waste of money, I know. I am ruining the experience for everyone, I know. But I just don't have the time to farm and I cared (don't play anymore) for the end-game content and not gate keeping. I min/maxed twinks and mains and instead of wasting my precious time farming, I would just buy gold instead.

My time/money/return worked out better doing this.

Now I wish I went back and didn't do it. I think I spent close to $2000 over the course of the last decade on in-game currencies via third-party websites. RIP, what an *****, would do again 10/10
 

Neatfeatguy

Posts: 836   +1,446
Sounds familiar (lol, literally). Though the now-highschooler got that PC Building game last year and afterwards took an interest when I did the subsequent Biannual Great PC Dusting Blowout when we clean out the PCs and internal CPU temperatures go down 15C. Note to AMD Wraith users, if you use your computers in a dusty environment, those coolers block up airflow with dust pretty bad and send (in our cases) Ryzen 1600AF temperatures up 15C until you blow them out again and they're back to cool cucumbers.

Tower coolers in my 2 PCs and all the graphics cards (2x Nvidia, 2x AMD) seem less affected by this.
My daughter mentioned to me a game that let's you build gaming PCs....she even showed me some pictures that one of her friends took of the in game PCs they built.

I figured she'd like building one with me, but apparently a lot of kids just want the end experience and not the work that comes before it.
 

BadThad

Posts: 1,037   +1,193
I mean I spent way too much on WoW gold. Sad, I know. Waste of money, I know. I am ruining the experience for everyone, I know. But I just don't have the time to farm and I cared (don't play anymore) for the end-game content and not gate keeping. I min/maxed twinks and mains and instead of wasting my precious time farming, I would just buy gold instead.

My time/money/return worked out better doing this.

Now I wish I went back and didn't do it. I think I spent close to $2000 over the course of the last decade on in-game currencies via third-party websites. RIP, what an *****, would do again 10/10

Now, that I can understand if you really like a game. I don't play games like that but understand the trade-off between your time wasted mining and just buying what you need. It applies to much more than gaming in our lives. Luckily, I can afford to pay instead of wasting my time on the stupid.
 

brucek

Posts: 1,126   +1,670
Trading off time & money in real life is of course very familiar to me and every adult. Where I understand it less is in video games. I am not going to pay someone to watch a movie or TV show for me, because the whole point is in the watching. Same with video games: the point is in the playing. If you are paying someone else to play for you, why not just neither pay nor play.

Sometimes I think these video game companies should just cut out the game part entirely: you simply send them a large fee, they put your name on their game's "hall of champions", send you a trophy, and tell you and all your friends that you "won" the game. You never even have to install the game on your computer.
 

GamerNerves

Posts: 175   +108
Well, people waste money on lot of things and nobody cannot state they would have never wasted on something. Microtransactions though, I think they are rather transparent in the end if you are not totally sucked into the game. You can easily see that they are just gimmicks and the game is designed to be partly tedious for you to buy them, but there is more to them than just enjoying a particular game so much that it gets the best of you.
Today what drives the sales of many big franchises is social grouping. Many gamers do not want to play games that their friends don't play or big masses of people don't play. They might see popular games as an investment of time and effort, or even as supportive action, so buying some in-game items do not count as waste of money for them necessarily. The thing is though, hits of the past like Unreal Tournament for example were one time purchases for all players and people still enjoyed them en masse.

Any game that requires to buy in-game stuff to be enjoyable is bad by design and not worth playing, but I think many games that are not particularily like this, but still sell stuff, are linked to this social behavior of gamers that I argue is today extremely pressing aspect to this audience in question. I myself don't care that much, I haven't ever even invested time in MMOs and if I play a multiplayer, it's with close friends or random players, but I have found this natural phenomenon of social behavior coming more and more fundamental around me. This has been witnessed in other stuff in the world of couse countless of times, but video games have reached new huge audiences about 2010 and forward I'd say, so this is something rather new and important to remember.
 

Dimitrios

Posts: 1,058   +863
It appears gaming will evolve towards subscription based mixed with micro transactions and other ways to milk the customers while laying off employee's and let the easy money pour in while being lazy.

I'm worried about the future of gaming.