The 13 wealthiest Chinese tycoons on Bloomberg's billionaires' list saw $12.7 billion of their wealth wiped-out, after President Xi Jinping's consolidation of power sparked fears about the recovery prospects for China's economy over Xi's top-down approach in economic management. That is expected to translate to a decrease in earnings per share of 32% to $1.85.The richest people in China lost billions in just one day, following a massive market sell-off which sent Hong Kong shares down to their 14-year lows on Monday, according to the Bloomberg Billionaires Index. For 2019, management is calling for revenue to decline by 20% to $6.025 billion. While management expects these moves to enhance growth over the long term, the company will take a hit this year on the top and bottom lines. Several changes were announced, including discontinuing its investment in the Destiny franchise - which was developed in partnership with a third-party studio - as well as beefing up its game development staff by 20%. In response to the abrupt slowdown in player investment, management is calling 2019 a transitional year. Digital revenue made from in-game purchases is Activision Blizzard's largest revenue stream, comprising about 57% of total revenue in 2017. Weak in-game spending is why non-GAAP revenue of $2.835 billion in the fourth quarter came in below management's guidance for $3.048 billion. Regardless, management wasn't pleased with in-game spending, which was particularly weak in Destiny, Overwatch, and Hearthstone. Also, monthly active users increased by 11 million in the quarter to 356 million, breaking a multiquarter slide in this important measure of audience reach and engagement. On the surface, the fourth-quarter results looked solid, with revenue up 16.5% year over year to $2.381 billion, and earnings per share up 84% year over year to $0.90.
CEO Bobby Kotick said, "We didn't execute as well as we hoped to in 2018, and our current outlook for 2019 falls below what is possible in an industry filled with growth opportunities." While the company delivered record revenue and earnings for the full year, fourth-quarter revenue was below management's expectations.
A young man playing a video game on a PC with a large audience in the background
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