Activision Blizzard (NASDAQ:ATVI) had a pretty shaky quarter, and it was partially due to overestimations on revenue front for Q4’15, and a reset on expectations when pertaining to core Activision Blizzard earnings, as the company plans to launch the Destiny sequel in FY 2017 as opposed to FY 2016.

Quoted from earnings conference call:

On Destiny, we expect to deliver a new expansion in 2016 but note that we no longer expect a full game Destiny release during the year. We do however expect a full game Destiny sequel to now come in 2017.

The incremental accretion from King Digital Entertainment was factored into the company’s guidance, which was why investors were partially confused by the commentary provided by management.

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Activision doesn’t anticipate margin leverage following the acquisition of King Digital? A total shocker. They plan to elaborate on their reasoning in its Q1’16 release, but my initial instinct is that the added restructuring charge from acquiring King will lead to limited margin accretion over the near-term with the consolidation of King and Activision business units to become a bigger theme in FY’17.

Source: Activision Blizzard

Activision Blizzard fell short of its own outlook as it reported non-GAAP revenue of $2.118 billion when compared to its outlook of $2.148 billion. The impact was partially due to console weakness, but mostly F/X impact. The dollar index had its strongest gains through Q4’15 as investors were fleeing emerging markets due to currency volatility and weakening macro growth assumption in China and other emerging markets (I recall economists revising macro growth assumptions across the globe in CY’15).

The net result was capital outflows in many of the emerging economies, which resulted in massive currency destabilization. The dollar index gained by 4% or so in Q4’15, which explains the 1.4% revenue miss. Last minute window dressing among portfolio managers to mask some exposure to emerging markets helps explain the currency outflow from emerging markets in Q4’15.

In my opinion, Activision had a fairly solid quarter despite excessive currency volatility and next year guidance of non-GAAP EPS of $1.75. The number wasn’t too bad but could have been much better.

Source: Activision Blizzard Stock Price Data by amigobulls.com

I think the concerns shared by buy side analysts is the long-term value of King Digital as it has experienced user base erosion over the course of FY’15. The drop off in engagement implies that King’s platform of mobile apps will generate lower earnings accretion over time unless Activision Blizzard is able to reverse the decline in engagement metrics over the next 12 to 24-month timeframe.