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Activision Posts $1.4B In Quarterly Sales, Raises Forecast

Activision Posts $1.4B In Quarterly Sales, Raises Forecast

May 9, 2011 | By Kris Graft

Activision Blizzard on Monday reported better-than expected results for the January-March fiscal quarter, driven in part by strong sales of Call of Duty: Black Ops' First Strike DLC.

The company said sales for the first calendar quarter increased to $1.4 billion for the period, up from $1.3 billion year-on-year. Profits were $503 million, up from $381 million for the same quarter a year prior.

Activision Blizzard CEO Bobby Kotick said the quarterly performance "was driven by digital sales and the continued strength of Activision Publishing's Call of Duty and Blizzard Entertainment's World of Warcraft franchises."

He added, "Digital content continues to represent a significant portion of our revenues and increased by about $100 million year over year, enabling us to deliver record first-quarter operating margins and earnings per share."

For the first quarter, sales from digital channels increased 30 percent year over year, making up 30 percent of the publisher's total sales on a GAAP basis.

Digital sales saw a boost with Activision releasing the Call of Duty: Black Ops map pack First Strike in February. The pack sold 1.4 million units in its first 24 hours of availability.

Black Ops has seen players log over "1.2 billion online hours of online gameplay" since it launched last year, according to Kotick. "Interactive entertainment continues to see broader audience appeal and powerful positive trends in online gameplay and online distribution," he added.

The company said that the total number of unique online gamers playing Treyarch-developed Call of Duty: Black Ops was more than 33 percent higher than that of the Infinity Ward-created Call of Duty: Modern Warfare 2 in the games' first five months.

Sales of First Strike were also 20 percent higher than Modern Warfare 2's first DLC during the comparable period in 2010, the company said. The latest Black Ops DLC, Escalation, shipped on May 3 this year.

Activision Blizzard said it is positioning itself for growth by allocating "the majority of its resources and focus toward opportunities which it expects will afford it the greatest competitive advantages and the greatest potential for best-in-class quality, high-margin digital growth, and long-term success."

The company said these initiatives include new content for World of Warcraft, StarCraft and Diablo and "robust investment in forthcoming Call of Duty titles, including a microtransaction game for China."

Other major products from Activision include the new property from Bungie, which has an exclusive publishing agreement with Activision, and Skylander's Spyro's Adventure, an initiative that will tie together video games, toys and online.

In light of the strong performance, the company on Monday also raised its outlook for the calendar year to $4.05 billion, up from the $3.95 billion forecast given on February 9 this year. The publisher raised its earnings per share forecast to 61 cents per share, up from 56 cents per share.

For the April-June quarter, Activision said it expects $985 million in revenues and earnings per share of 19 cents.

The company added, "Since Blizzard Entertainment has not confirmed a launch date for its next global release, the company's calendar year outlook at this time does not include a new game from Blizzard in 2011."

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