Gaming earnings: The pandemic is their call of duty

  • Revenue
    • EA (Q4): $1.39 billion (+12% YoY vs. $1.19 billion expected)
    • Activision/Blizzard (Q1): $1.79 billion (-2% YoY vs. $1.32 billion expected)
  • Earnings:
    • EA (Q4): $418 million (+100% YoY, above expectations)
    • Activision/Blizzard (Q1): $505 million (+13% YoY, above expectations)
  • Guidance:
    • EA: $5.525 billion for the fiscal year
    • Activision/Blizzard: $1.69 billion in revenue for next quarter

The big number: With so many people stuck at home, it seems like they've all turned to buying new games to pass the time. Both EA and Activision/Blizzard pulled in massive revenue this quarter, with EA growing 12% over the same period last year. While Activision actually shrank a bit, its $1.79 billion in revenue was still well above what analysts had been expecting for the quarter.

People are talking: According to Activision, one of its most popular games franchises was just as much to thank for its earnings this quarter as the pandemic. "Our business exhibited accelerating momentum entering the second quarter from the dual tailwinds of strong execution in the Call of Duty franchise following last year's increased investment, and increased engagement as people turned to our interactive content as they sheltered at home," the company said in a release.

Opportunities: Both EA and Activision seem to be making the most of this unprecedented time. "With more people staying at home, we have experienced, and are continuing to experience, heightened levels of engagement and live services net bookings growth to date," EA said in a release.

Activision said in its release that work-from-home orders haven't affected its ability to design and release games to date, and the company hasn't shifted any release dates for future games yet. Competitor Nintendo, which reports its earnings on Thursday, is likely to be in a similar boat. Its Nintendo Switch consoles are sold out across the U.S., and its most recent game, Animal Crossing: New Horizons, has become a cultural sensation.

Threats: As with every business right now, there's no knowing where this pandemic will go. People do still tend to spend on entertainment even in recessions, so there's the chance that games-makers will have little problem developing and shipping new games from home that people will want to buy. But for consumers looking for new consoles, any disruptions in supply chains could hurt game publishers if new users can't access their content. Similarly, in-store sales will likely to continue to dwindle if lockdowns continue; EA noted a roughly 3% drop in packaged sales compared to the same quarter last year. With stores closed, there's inventory going stale on shelves that gamers may no longer want when stores open back up. Who will want FIFA 20 when FIFA 21 is on the way?

The power struggle: There is the chance to get carried away here. Although it acknowledges the unknowns in the economy, rising unemployment, and slow retail sales, Activision says it believes "there is potential for overperformance if these risks do not materialize." Keeping gaming revenue up, especially for games that rely on frequent microtransactions and access to the internet, could be a challenge in a prolonged recession.


Why foundation models in AI need to be released responsibly

Foundation models like GPT-3 and DALL-E are changing AI forever. We urgently need to develop community norms that guarantee research access and help guide the future of AI responsibly.

Releasing new foundation models doesn’t have to be an all or nothing proposition.

Illustration: sorbetto/DigitalVision Vectors

Percy Liang is director of the Center for Research on Foundation Models, a faculty affiliate at the Stanford Institute for Human-Centered AI and an associate professor of Computer Science at Stanford University.

Humans are not very good at forecasting the future, especially when it comes to technology.

Keep Reading Show less
Percy Liang
Percy Liang is Director of the Center for Research on Foundation Models, a Faculty Affiliate at the Stanford Institute for Human-Centered AI, and an Associate Professor of Computer Science at Stanford University.

Every day, millions of us press the “order” button on our favorite coffee store's mobile application: Our chosen brew will be on the counter when we arrive. It’s a personalized, seamless experience that we have all come to expect. What we don’t know is what’s happening behind the scenes. The mobile application is sourcing data from a database that stores information about each customer and what their favorite coffee drinks are. It is also leveraging event-streaming data in real time to ensure the ingredients for your personal coffee are in supply at your local store.

Applications like this power our daily lives, and if they can’t access massive amounts of data stored in a database as well as stream data “in motion” instantaneously, you — and millions of customers — won’t have these in-the-moment experiences.

Keep Reading Show less
Jennifer Goforth Gregory
Jennifer Goforth Gregory has worked in the B2B technology industry for over 20 years. As a freelance writer she writes for top technology brands, including IBM, HPE, Adobe, AT&T, Verizon, Epson, Oracle, Intel and Square. She specializes in a wide range of technology, such as AI, IoT, cloud, cybersecurity, and CX. Jennifer also wrote a bestselling book The Freelance Content Marketing Writer to help other writers launch a high earning freelance business.

The West’s drought could bring about a data center reckoning

When it comes to water use, data centers are the tech industry’s secret water hogs — and they could soon come under increased scrutiny.

Lake Mead, North America's largest artificial reservoir, has dropped to about 1,052 feet above sea level, the lowest it's been since being filled in 1937.

Photo: Mario Tama/Getty Images

The West is parched, and getting more so by the day. Lake Mead — the country’s largest reservoir — is nearing “dead pool” levels, meaning it may soon be too low to flow downstream. The entirety of the Four Corners plus California is mired in megadrought.

Amid this desiccation, hundreds of the country’s data centers use vast amounts of water to hum along. Dozens cluster around major metro centers, including those with mandatory or voluntary water restrictions in place to curtail residential and agricultural use.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).


Indeed is hiring 4,000 workers despite industry layoffs

Indeed’s new CPO, Priscilla Koranteng, spoke to Protocol about her first 100 days in the role and the changing nature of HR.

"[Y]ou are serving the people. And everything that's happening around us in the world is … impacting their professional lives."

Image: Protocol

Priscilla Koranteng's plans are ambitious. Koranteng, who was appointed chief people officer of Indeed in June, has already enhanced the company’s abortion travel policies and reinforced its goal to hire 4,000 people in 2022.

She’s joined the HR tech company in a time when many other tech companies are enacting layoffs and cutbacks, but said she sees this precarious time as an opportunity for growth companies to really get ahead. Koranteng, who comes from an HR and diversity VP role at Kellogg, is working on embedding her hybrid set of expertise in her new role at Indeed.

Keep Reading Show less
Amber Burton

Amber Burton (@amberbburton) is a reporter at Protocol. Previously, she covered personal finance and diversity in business at The Wall Street Journal. She earned an M.S. in Strategic Communications from Columbia University and B.A. in English and Journalism from Wake Forest University. She lives in North Carolina.


New Jersey could become an ocean energy hub

A first-in-the-nation bill would support wave and tidal energy as a way to meet the Garden State's climate goals.

Technological challenges mean wave and tidal power remain generally more expensive than their other renewable counterparts. But government support could help spur more innovation that brings down cost.

Photo: Jeremy Bishop via Unsplash

Move over, solar and wind. There’s a new kid on the renewable energy block: waves and tides.

Harnessing the ocean’s power is still in its early stages, but the industry is poised for a big legislative boost, with the potential for real investment down the line.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Latest Stories