Call of Duty’s in-game revenues are growing despite Fortnite

The battle royale shooter Fortnite is a pop-culture phenomenon and a juggernaut in the video games sector, but it hasn’t had a detrimental impact on Call of Duty’s microtransaction sales as some (like me) predicted. It turns out that the game market is big enough for two juggernauts — at least for now.

Activision Blizzard reported its Q1 financial results today (after Dow Jones leaked them early), and the publisher revealed that its Activision brand (separate from King and Blizzard) had 51 million monthly active players during the three-month period that ended March 31. Call of Duty as a whole, and Call of Duty: WWII in particular, was the driving force behind this. That enabled the company to report a strong $1.38 billion in revenues for the quarter, which is up 15.7 percent year-over-year.

“At first glance, Activision Blizzard reported decent results,” R.W. Baird analyst Colin Sebastian wrote in a note to investors. “In particular relative to the amount of intra-quarter angst over competition from Fortnite.”

Call of Duty’s in-game revenues were up year-over-year. That makes sense because Call of Duty: WWII sold much better than Infinite Warfare, which was the new Call of Duty in Q1 of 2017. But the franchise’s in-game sales are not just doing better relative to last year. Call of Duty had its second-best Q1 ever in terms of total revenues. Only Q1 2016, following Black Ops III’s launch, did better.

So Call of Duty is doing more than weathering Fortnite. It’s important to note that Wall Street analysts like Sebastian were never predicting that Call of Duty would collapse in the face of Fortnite. The expectations were that players might put their gaming budget (both in terms of dollars and hours) toward the last-player-standing game, and that would maybe lead to a 10 percent drop in microtransaction revenues for Activision’s behemoth.

While that hasn’t happened yet, it’s still a threat — and one that Activision recognizes.

“Q2 guidance is below consensus,” Sebastian said of Activision Blizzard’s outlook for its next three months. “[This is] potentially reflective of management’s typical conservatism, as well as another light release schedule. Management very slightly tweaked 2018 full-year guidance higher — although we expect competitive issues [from] Red Dead and Fortnite as well as changes to Call of Duty to warrant additional conservatism.”

Those Call of Duty changes include a lack of a single-player campaign, which Activision has not confirmed.

Call of Duty is still Activision Blizzard’s blockbuster jewel, and the good news for the company is that it looks like it can continue counting on it to deliver some spectacular numbers. If that changes — because of Fortnite or something else — the publisher will have to come up with something new.