Activision Blizzard Announces 'Destiny 2' In 2017, Expansion In 2016, But Falls Short On Profit

Activision Blizzard Inc. (ATVI) reported lower net income during the fourth quarter in 2015 than in 2014, the year when it launched the online multiplayer hit video game, “Destiny.”

The company reported net profit of $159 million for the quarter last year, which beat Wall Street estimates, but represented a 56 percent drop from the $361 million booked in the same quarter of the previous year. Analysts polled by Thomson Reuters expected net profit of $148.8 million.

Activision Blizzard posted revenue based on generally accepted accounting principles of $1.353 billion, down 16 percent year-over-year, and revenue on a non-GAAP basis of $2.1 billion, which missed analysts’ consensus prediction of $2.2 billion. The launch of “Destiny” in 2014 continued to weigh heavily on the company as it offset strong showings by games released in 2015, such as an expansion of the original “Destiny,” “Destiny: The Taken King” and “Call of Duty: Black Ops III.”

“Destiny” fans have something to look forward to this year, too: Activision Blizzard is planning a big expansion of the game in 2016, as well as a sequel in 2017.

Meanwhile, Activision Blizzard is in acquisition mode. The company made a $5.9 billion bid for the struggling mobile-game giant King Digital Entertainment PLC, maker of “Candy Crush,” in November, a deal it expects to close this month. After announcing the purchase of King, the firm spent $46 million on the business assets of Major League Gaming with a goal of creating a television channel dedicated to eSports.

“With our expected closing of the acquisition of King Digital later this month, we will have the largest game network in the world, with over 500 million users playing our games every month,” Activision Blizzard CEO Bobby Kotick said in a statement.

The company also announced the creation of an entertainment unit to produce films and TV shows based on its video game properties. Planned are a “Call of Duty” movie franchise and a “Skylanders” animated series. The firm already has “Warcraft” set for release June 10 in partnership with Legendary Pictures.

The busy holiday season was dominated by “Call of Duty: Black Ops III,” which was the best-selling game of last year, even though it was released Nov. 6 and faced competition from the likes of “Fallout 4,” “Halo 5: Guardians” and “Star Wars: Battlefront.” During the fourth quarter, Activision also launched “Guitar Hero Live,” and Blizzard Entertainment released “StarCraft II: Legacy of the Void,” an expansion pack to its 2010 hit real-time strategy game.

Activision Blizzard is planning new additions to its strongest franchises in 2016. It already released the first “Call of Duty: Black Ops III” downloadable content, “Awakening,” Feb. 3. All eyes will be on “Overwatch,” Blizzard’s new multiplayer first-person shooter expected this spring. And the company will release the “World of Warcraft: Legion” expansion in the second half of the year. There also will be a new “Skylanders” game and “Skylanders Academy” TV series. In addition, there will be another “Call of Duty” title released by the end of the year.

“Activision Blizzard as a whole will have the broadest range of games in terms of devices and genres on the planet. Add the highly anticipated launch of ‘Overwatch’ to the equation and they are set for a couple [of] very exciting and, most probably, very successful years,” said Peter Warman, CEO of Newzoo, a video game market research firm.