Still in the process of being acquired by Microsoft (NASDAQ:MSFT), Activision Blizzard (NASDAQ:ATVI) remains an independent listed company for the time being and therefore continues to publish its financial results. Those for the first quarter of 2022 were released on Monday and showed a sharp decline in revenue and profits compared to the first quarter of 2021.

Low Demand for Call of Duty Hurt Activision

The video game maker missed first-quarter adjusted sales estimates. Activision’s performance suffered from lower premium sales for ‘Call of Duty: Vanguard’ and lower engagement in ‘Call of Duty: Warzone’, with a return to pre-pandemic habits pushing players to switch less time on their consoles.

The Santa Monica, California-based company reported first-quarter revenue of $1.77 billion on Monday, in line with expectations, although below its first-quarter results of $2.3 billion from 2021. 

Net income for the quarter ended March 31 fell to $395 million, or $0.50 per share, down from $619 million, or $0.79 per share in the prior-year quarter. 

Excluding items, Activision earned $0.64 per share. This is below the consensus estimate of $0.70 per share.

The company recorded net bookings of $1.5 billion for the quarter ended March 31, 2022, compared to $2.1 billion in the same quarter of 2021. In-game net bookings were $1.1 billion, down from $1.34 billion a year earlier.

Higher Fees Due to Microsoft’s Takeover

Activision, which is being taken over by Microsoft, has also faced backlash following its response to allegations of internal sexual harassment and discrimination against female employees. The video game company suffered increased legal and other professional fees, primarily due to costs associated with its proposed transaction with Microsoft.

The transaction has been approved by the boards of directors of Activision Blizzard and Microsoft. If all goes as planned, the transaction should close during Microsoft’s fiscal year ending June 30, 2023.

Blizzard is working on expanding its Warcraft offerings and plans to launch Diablo Immortal on June 2.