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Activision Raises Fiscal Outlook Thanks To 'Record-Breaking'  Stimulus Package
Activision Raises Fiscal Outlook Thanks To 'Record-Breaking' Stimulus Package
April 15, 2010 | By Leigh Alexander

April 15, 2010 | By Leigh Alexander

Activision Blizzard says that thanks to demand for World of Warcraft and Modern Warfare 2, it expects revenues for its current fiscal quarter to come in higher than initially forecast.

The company raised its earnings outlook for the March quarter to 49 cents per share on a GAAP basis, an increase of 2 cents over the prior forecast.

"We benefited from the record-breaking launch of the Call of Duty: Modern Warfare 2 map pack, which was previously expected to launch in the June quarter," says CEO Bobby Kotick.

The Stimulus Package map pack, priced at $15, sold 1 million units on Xbox Live on day one, and over 2.5 million in its first week, Activision has said.

Kotick also said that operating expenses shifted into the June quarter will help its revenues for the March quarter come in higher. Despite the good news, however, the CEO aimed to assure investors that the company is remaining careful.

"It is always helpful to begin a year with great momentum," said Kotick. "However, we remain cautious about the economy and consumer spending and the fact that the majority of our games are not expected to launch until the fall."

Jeff Brown, VP of corporate communications at Activision rival Electronic Arts, commented on the news in light of the high-level firings at Modern Warfare 2 developer Infinity Ward: "This is kind of like announcing: The race horse I shot last month has won the Triple Crown!"

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Well, this sucks. Figured that it was going to sell, but most of the forums we're ablaze of people saying they were not going to buy it, with me as one of them.

Guess that was in vain lol.

Does anybody else seet this becoming a trend? Ubisoft has announced free DLC for Splinter Cell: Conviction every week, specifically Thursday, so it may not become widespread.

gus one
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For all the people who posted "f$ck ATVI" type rants it's hilarious. Seems the 'haves' have voted with their wallets and left the 'have nots' behind. I am pleased this has worked. It's good to see PDLC is very much alive and kicking and even when it fragments the player base it can still be very profitable. This just demonstrates if you have a strong franchise you can leverage off it multiple times to an established customer base and make very high margins in the process. One of the first thing we learnt in sales training was that it costs a hell of a lot less to upsell/cross sell an existing customer (think PDLC) than it does to acquire a brand new one (think new expensive unproven IP). Praise be the sequel!

*Disclaimer: The author is a shareholder in ATVI

David Delanty
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Of course people in forums would voice their disapproval and boycott it. Everybody who would buy it would be playing the game, not posting comments on-oh wait, gonna stop myself before this gets too ironic.

Tyler Peters
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Hopefully it does help the stock price, it's been in the dump for quite a while.

BTW - LOL @ Jeff Brown's comment. EA is on a roll with this.

Josh Green
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The only people who care about sticking it to ATVI are developers and the hardest of hardcore fans. While developers are gamers, gamers are NOT developers. They buy what they want, oblivious to the politics of the companies who develop or publish their products.

In the short term, what's been going on at Infinity Ward and ATVI will not affect sales of MW2 or its DLC. For those of you who want to stick it to ATVI, I'd be looking to the long term when Call of Duty in general is driven into the ground.

ken sato
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What's interesting beside the forum distractions, is the first day sales of DLC to units in the wild. Consider for a moment the the DLC was released only for the Xbox 360 rather than across multiple SKUs.


(1) The number of units retained or repurchased must of been strong. (Why by DLC if you no longer own the game?)

(2) The price point for DLC is at or below what the consumer is willing spend.

(3) MS profitability per DLC can be adjusted per points bundle purchase. (i.e. think of it as MS tax, save your points or else pay for more than you can use per title. This change adjustment happened a few months ago.)

So now I am considering how this correlates to title launch, retention, and project pipeline due to longer market placement via DLC and how this will affect a project.

Weird thing is though, I've got some niggling feeling that this has some similarities to currency markets.

Benjamin Marchand
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Blizzard has introduced new paid ingame items this week.

Hang yourself : they are selling a simple mount 25 dollars. And a pet 15 dollars.

I can see the Activision shadow behind this ...

Seriously, Activision is frightening me, for real.

Bob Stevens
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Nothing frightening about it, if you don't want to pay for it no one is forcing you to buy an in-game pet or a mount. No one is forcing you to buy DLC either, but most people are getting much more than $15 value out of it given how much MW2 is played.

Selling in-game BS has been SOP for a lot of MMOs for ages now, it's not really a surprise that Blizzard is doing it now.

Michael Mucci
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WoW subscribers helped to raise $1.1 Million at $10 a pop for a decent, but ultimately decorative Pandaren Monk pet. The $1.1 Million derived from half of the profit from the pet over the months of November and December. Granted the Pandaren Monk was for a good cause (Make a Wish Foundation), just imagine the net Blizz will see for such a unique, cool looking designed mount at $25.

Matt Ross
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@gus one. you and Activision deserve each other. your remarks are everything that is wrong with the games industry.

of course gaming should be another part of life filled with the frustration an disappointment of being continually reminded that you are a 'have not' in a world (or country) of 'haves'. I remember when all you had to do was save up for a game knowing full well after you had bought it, you could play it forever, experiencing all the features it had to offer, as well as any that were added to the game by the developers. all free.

I'm not against PDLC at all, and I think it is a brilliant way to sell "expansion sets" as they were called when they came in a box. but some of the stuff they try and charge you for now... its sickening.

and let's see how good MW3 is when its made by a bunch of devs fresh out of school! seeing as how the entire senior IW dev team has jumped ship...

Christopher Wragg
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Eh, consumer spending drives price, if enough people are willing to pay for it at the price set, then it is clearly set at a reasonable price. If it was too extreme, or too pricey, then people simply would not buy it, and price would drop in response. Additionally DLC plays off the same core concept as movie merchandise. I hate to think how many Twighlight duvets, or figurines, or merely branded items like pencil cases have sold. People milk a well loved brand for everything it's worth, because it works, and fans are willing to pay for it.

It's more expensive than the norm, but it's not evil, or to the detriment of the game industry, it's merely good business.

gus one
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What I found most fascinating about this particular PDLC was that 1) it was priced high relative to other PDLC and 2) it even included old content from MW2. Reading various forums everyone was up in arms and I was really concerned that maybe ATVI had pushed the boat to far out on this one. Whilst the price increase of MW2 was accepted I wasnt too sure given the animosity on forums that the PDLC would be. I've got to hand it to ATVI's marketing team they are one class act. They've clearly researched the price points very well and worked out that they could sell the PDLC at the current price. Clearly there is a massive silent majority who just want to play the game and are loving it instead of ranting on forums (like David said). It is supply and demand afterall. I wonder if EA is watching and thinking it can increase it's PDLC prices. ATVI are the masters of marketing afterall only a fool would ignore what they do.

Michael Smith
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... OR this is just another case of a $250 iPhone game. ;)

When you combine people's relative inexperience with what to expect to pay for DLC plus the level of fanaticism that can be associated with games, customers are ripe for exploitation. That money has to come from somewhere as people's entertainment budget is finite. This is beyond reasonable compensation.