Electronic Arts, Activision Blizzard, Nintendo beat earnings estimates as gaming soars

Nintendo earnings soar 41% and Activision Blizzard posted a beat on its earnings report. Yahoo Finance’s Tech Editor Dan Howley breaks down the latest video game earnings results.

Video Transcript

JULIE HYMAN: One of the other ways people are entertaining those they care for is by sticking them in front of some video games, unfortunately, sometimes for us parents. Dan Howley is here with a roundup of some of the earnings numbers that we got. So what? We got EA. We got Nintendo. We got Activision Blizzard. Where do you want to start, Dan?

DAN HOWLEY: Let's start with Activision Blizzard. They saw sales increase by as much as 21% in the quarter. That's their net bookings, basically net bookings are kind of their way of describing revenue, but with deferrals from online subscriptions. They absolutely killed it in the quarter because as you said, people are looking for ways to be entertained and not just sit there and stream videos or bake a whole bunch of bread, which for some reason has become a big thing for people.

Outside of Activision Blizzard, EA did incredibly well. They saw their revenue jump 12% in the quarter. And then Nintendo just blew the doors off the place. They've been absolutely just on fire lately because of the Nintendo Switch. Now, the reason being is because you look at something like a Switch, normally you would be able to take that console, put it in your TV, and then when you had to go out, you could take it with you.

But the fact that you can take it with you would think-- make you think that it wouldn't do well. But in reality, the games that Nintendo makes are so well-adjusted for a larger audience that more people are going to them and proof in that is through their recent title "Animal Crossing, New Horizons." This is basically a game where you kind of create your own little island paradise. You can invite friends, have them over, kind of interact with them. And that sold incredibly well. We're talking 200% growth for that.

We're looking at sales of the Switch just sold out around the world. If you have to-- if you happen to find a Switch for sale, you're lucky. Our own Brian Cheung got one just as they went on sale at Target in a brief window. And then they were quickly sold out again. So they're doing so well that they outsold the lifetime videogame sales of the Nintendo 64 as well as, I believe, the Gamecube. So that's telling you how well this system is going.

And then just want to go back real quick to Activision Blizzard. One of the things that they did was launch a new title called "Call of Duty, War Zone." That launched March 10. They've already had 60 million people play that game. That's just completely insane. It's free to download. That's part of the reason. But they pull revenue in through things like game skins, extra characters, similar to "Fortnite." And if you think about "Fortnite," that's a game that's just printed money for Epic, $2 billion-plus.

So if you can see how that's doing, you look at the popularity of "Call of Duty" and then this "War Zone" title that's free to play, you can only imagine Activision Blizzard's going to do incredibly well going forward with this.

JULIE HYMAN: And Dan, so you're talking about these sort of blockbuster games that are carrying the numbers for these various ones. What about EA, do we get the-- do we get the same effect there? Or do they not have that big game.

DAN HOWLEY: They had a big game, you know, 12% higher revenue. It wasn't, you know, exactly gangbusters. But really, that's because they didn't have a blow-up game for this particular quarter, you know? Around this time, you'll usually have games come out in February and then into March and April. Then we see some in the summer. Really it's towards the tail end of the year and then the early part of January, some in February and March. But we didn't really get that from EA this year. But we did get that from Activision Blizzard and Nintendo which is why they've done so, so well.

But you know, EA still has its Origins platform, and that is basically "Apex Legends," another online shooter. So they're still doing well there. But they just didn't have the new, hot game that really caught people. Really for Nintendo, it just is mindblowing how well this game "Animal Crossing" has done. I know people that haven't played games for a long time who have signed on just because they want something. It's a good form of escapism during the lockdowns.

JULIE HYMAN: Yes, everybody needs that. Thank you so much, Dan. Appreciate it.