Activision Blizzard posts $15 million profit, revenue up $23 million

World's top publisher turns small profit on $703 million in sales; $4.05 billion 2009 outlook maintained despite concerns about holiday consumer spending.

Over the past two weeks, Sony, Microsoft, Nintendo, Konami, Capcom, THQ, Ubisoft, Namco, and Square Enix all released their most recent earnings reports.

Today, it was Activision Blizzard's turn.

Guitar Hero 5 brought in cash, in more way than one.

The world's biggest-third party publisher reported $703 million in net revenue for the July-September quarter, up from $680 million during the same period the year prior. More importantly, the company posted a quarterly profit of $15 million, way up from the $108 million the company lost in Q3 2008.

The quarter also saw Activision Blizzard's overall game software market share grow to 13.3 percent in the US. In Europe and the US combined, the company controls 12.3 percent of the software market, according to the NPD Group and Charttrack/Gfk.

In a statement accompanying the announcement, Activision Blizzard's famously outspoken CEO Bobby Kotick credited Guitar Hero 5 and Marvel: Ultimate Alliance 2 as the quarter's biggest two debut games. Also helping fill company coffers were catalog sales of Guitar Hero and Call of Duty games and ongoing income from the massively multiplayer role-playing game World of Warcraft.

Kotick also tried to soothe the fears of analysts about slowing sales of rhythm games--such as Activision's own forthcoming DJ Hero, which is reportedly seeing lower-than-expected preorders. He pointed out that when all SKUs were combined, Guitar Hero World Tour was the top-selling game in the US and Europe for the first nine months of 2009.

"Year to date through September 30, the Guitar Hero franchise was the number-one best-selling third-party franchise in North America and Europe," Kotick said in a statement. "For the month of September, sales of music games in the U.S. increased 72 percent in dollars year over year, which demonstrates the sustained interest in this new and important game category." September saw the release of both Guitar Hero 5 and rival MTV Games' The Beatles: Rock Band, with the latter outselling the former but still managing to be unprofitable.

In the official Activision earnings release, Kotick was bullish on his company's slate for the current quarter, which includes Band Hero, DJ Hero, Tony Hawk: Ride, and next week's Call of Duty: Modern Warfare 2. (The latter title is the now most preordered game in Activision and GameStop history.) However, speaking to Reuters, the executive was more candid, saying he was "very concerned" about recession-hit consumers' spending this holiday season.

Modern Warfare 2 boasts the most preorders in Activision's history.

"The question is whether the consumer will materialize, and I think there's huge risk that the consumer won't materialize," he told Reuters.

Kotick's fears aside, Activision is sticking by its full calendar year earnings guidance of $4.05 billion in net revenues and $0.26 earnings per diluted share of $0.26. It did warn, however, that the figure was subject to certain risks, such as World of Warcraft's ongoing struggle to switch localization partners in China. Earlier this week, operation of the MMORPG was threatened in the Asian nation by a dispute between two regulatory agencies of the Beijing government.

Finally, during a conference call with analysts after the report's release, Activision executives confirmed it was planning to release new installments in the Call of Duty, Guitar Hero, Tony Hawk, and Spider-Man franchises in 2010.

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Discussion

137 comments
valent1n
valent1n

@xthabeast true, is just a thing to do if you call yourself a game player, otherwise ..... oyu're not ;)

xthabeast
xthabeast

@valent1n Yes, who hasnt played Call of Duty or Guitar Hero.....

valent1n
valent1n

They could not failed, all of us have already played at least one game from them.

mehrdad1987
mehrdad1987

well i think... Guitar Hero 5 would be awesome, looks like Activision blizzard will enjoy their profit.. and we'll enjoy the game.

mbrown726
mbrown726

Gave up on Tony Hawk for Skate, Gave up on Guitar Hero when the guitar became a side kick to other instruments, Never been a Spider Man fan (Wolverine forever), So I will be waiting for COD, Heck, I would buy the American Revolutionary war version of COD.

redmachine
redmachine

Actually, barkera0, you make a damn good observation that I might have overlooked. What about some new stuff? ya, no more sequals, lets get some new damn stuff. AFtera while it changes from creativity, to a business. Thats just sad, after all, were the consumers.

Sins-of-Mosin
Sins-of-Mosin

Make WoW $5 a month and I'll come back. Also, make the next CoD from the Korean War.

ScrawlKnight
ScrawlKnight

Ugh, why keep making sequels? Let's see some new stuff!

Zerobeam
Zerobeam

I'm not so sure they're gonna make too much from the new Tony Hawk game...:|

DawnFang
DawnFang

How exactly do so many of you want to compare FPS's to MMO.RPG's ?!? And why rag each other the whole time. So what if someone enjoys WoW. I enjoy'd it myself untill game-time became too expensive. And honestly I still need to find a RPG of this style that is as enthralling. (Hoping with DA.O) RPG for me is more focused on Lore (Story) than action. That said, I was also a Sgt. in South Africa's biggest CoD4 Clan... Loved shooting people in the head online on a regular basis... Then with CoD5 they went from "Modern-Warfare" back to WW2. What the ..... Getting back to the Article at hand, and referring to my earlier comment on this: Game Developers ARE in it for the money... Eg1 that (Some/Most) Developers are only in it for the $$$: LEAD BLIZZARD DEVELOPER Quoted saying: "Basically, and I'm speaking to the Blizzard guys in the back: we need to stop writing a **cking book in our game, because nobody wants to read it." (http://www.shacknews.com/featuredarticle.x?id=1096) Almost every person I know (Personally) that play's WOW, owns War of the Ancients. Excuse ME?!?!

tmorri603
tmorri603

@TevoxZi I understand why you hate Activision because I am sick of all the Guitar Hero stuff every year but there are some people that just hate Activision for talking about dumping the PS3. Also, Rock Band is published by MTV games but I am sick of this series as well.

Terdog
Terdog

@melty3219 you know, what. I am a PROUD OWNER of Call of Duty 2, 4, and World at War. ON PC. I don't torrent any games, I own them all. Now,as for Modern Warfare 2, a LOT of PC gamers were looking forward to it, myself included. And you dont think xbox 360 games get torrented. You should look at the sites then and tell me otherwise. Idiot

choasgod
choasgod

A mere $15 million profit is pretty awful imo -- when the break down for revenue per platform has wow at ~300 million (of which atleast 250 must be profit) it really shows how poorly the rest of activision blizzard fared. As for "music game" sales last year GH and Rock Band released in October, this year it was september - ofcourse there going to be up yoy.

L337G4M3R666
L337G4M3R666

Moriarte: Ignoring IW.net, is the PC version a direct port of the console version? Mackey-IW: No, PC has custom stuff like mouse control, text chat in game, and graphics settings.

imaidiot
imaidiot

Too bad all of the WoW nerds will never read this story, as they are in the process of continually ruining their lives and blocking everything else out and gold harvesting or whatever goes on there. I guess I complain because WoW is a life ruiner, sucks you in, and I'm afraid to be sucked in. But there have been too many stories of divorce, firings, and awesome Southpark episodes for me to join. Activision is a big company that wants to just pump out games with little improvement (ie the gh franchise now), or use a sub par developer to ensure they have a new game in the series come out each year (ie treyarch)...EA...I mean Ubisoft...I mean Activision is all about making money, and I guess they are good at it.

MattHopeKids
MattHopeKids

Also blizzard are awesome, Activision should take a leaf out of their sister company and take longer over games.

MattHopeKids
MattHopeKids

As good as their games are, Activision really need to create some new IPs. It's just getting boring with the same sequals year on year. Activision really have the biggest opportunity out of any developer to create new games instead of sequals, so I really just can't understand why they don't make any new high profile ones.

VectrexFanBoy
VectrexFanBoy

Lol activision has put out more games in the past 6 months then blizzard has for the past 15 years i bet =P

duke-nukem11
duke-nukem11

cash cow's? the idea is to earn money. more money means more game. simple maths if you ask me

da_vortexx
da_vortexx

@metalkid9 you think i dont know that? im not retarded. i was saying torrents for games hurts PC so much more than systems, mainly cause its easier to set up for PC than systems.

melty3219
melty3219

Bobby koticks goal was to make money and he made money! lots of money! all the people hating on activision need to shut up. dont like what they are doing? dont buy thier products and dont comment saying that you are going to boycott it becuase NEWS FLASH boycotts do nothing

melty3219
melty3219

pc gamers angry with MW2 either buy a console or shut the hell up you were going to torrent this game as it is!

jimmy8118
jimmy8118

I hate Activision, same repetitive games every year, copying ideas from other companies, and turning amazing developers (Infinity Ward) into cash cows for them. Activision cares more about how heavy their wallets are than satisfying their fans and customers.

TevoxZi
TevoxZi

@tmorri603 It's not just that, it's that they're starting to milk games for money. Guitar Hero, DJ Hero, Rock Band.. Don't we have enough of those already?

tmorri603
tmorri603

I have never seen such hate for Activision. Could a lot of this hate come from Activitsion saying they might be pulling support of the PS3 if the sales don't improve? I think it is crazy to hate a company just for a business move they may make to help make they company as profitable as can be. That is what all companies do.

jjjrrr11211
jjjrrr11211

i hope everybody sees what happends when u make great games

mugupo
mugupo

Blizzard is addict with WOW, come one release diablo 3 and SC2 aleady. Damn you greed bastard.

solomn6rundy
solomn6rundy

@ jshaas i agree with you completely, though

chtgamer
chtgamer

Wow, so many Activision haters here! Probably they are The Sims fans :) P.S. I prefer Diablo, Starcraft and other good games.

great_rulo
great_rulo

Mergatroyder, WoW is kind of a "lil" more than a nice paycheck to AB.

great_rulo
great_rulo

Go Warcraft, Diablo and Starcraft!

jshaas
jshaas

@solomn6rundy... You are correct sir... my mistake.

solomn6rundy
solomn6rundy

@jshaas Bungie had nothing to do with halo wars. It was ensemble studios last game.

jshaas
jshaas

I love how all the haters are like... "Activision isn't getting any money from me... until ______ comes out." WTF people? You can't boycott a company on a part-time basis. I think it's safe to say that Activision is probably the biggest publisher in the industry, next to EA... why would IW want to leave them? Being with Activision allows IW to have access to that massive amount of capital... which in turn helps them make great games like COD4 and the upcoming MW2. We've all seen what happened to Halo after Bungie moved out of MS's gaming house... ODST=not so great, Halo Wars=I don't know anyone that bought this.

MERGATROYDER
MERGATROYDER

Can't wait for the day when Infinity Ward packs up and leaves Activision. Guitar Hero may sell well, and WoW may be a nice paycheck, but they know CoD is what brings the money home and they will fight for that contract. Self distribution on the next title IW?

melty3219
melty3219

haha cry more pc gamers you were gonna torrent the game as it is! i am glad that MW2 is complete crap on PC next time buy the game you brought this on yourself

StephenBassford
StephenBassford

Holy Crap! You see that? Thousands of Rythym games are drowning out there! Quick, through them a Warcraft lifejacket. Whew.

Rottenwood
Rottenwood

Pretty small profits, all things considered. This is the company behind World of WarCraft, which must have brought in well over $15 million this year. Where's all the surplus going? Then again, it must be expensive to procure all of that orphan blood for Kotick to roll around in.

muzik_mafia
muzik_mafia

Activision is like the druggie brother of Blizzard and cousin of IW. Drags them both down

fps_d0minat0r
fps_d0minat0r

i would never buy an activision game........except the modern warfare series. i hope infinity ward leaves them, then i wont have to deal with them.

Jarltheafro
Jarltheafro

''Finally, during a conference call with analysts after the report's release, Activision executives confirmed it was planning to release new installments in the Call of Duty, Guitar Hero, Tony Hawk, and Spider-Man franchises in 2010.'' Blizzard, is a studio of activision blizzard, (orly?) therefore I will be disappointed if starcraft 2 doesn't get added to this list!

svaubel
svaubel

Big surprise. Activision stating they are going to keep milking their franchises. Expect Guitar Hero 7, 8, 9, 10 next year. The death of the music game genre will be caused by Kotick. Acti is never getting my money again, accept when WoW: Cata comes out.

zomglolcats
zomglolcats

Activision sucks. MW2 on PC is going to be absolutely terrible.

Jawehawk-DK
Jawehawk-DK

Activision is the worst and most money hungry company EVER. They suck.

enoslives7
enoslives7

Kotick is a piece of a crap. However, it's nice to see American game companies dominating the competition.

LosDaddie
LosDaddie

Great news. Activision is an amazing developer & publisher :)

Quique85
Quique85

i hate that fat dude willing to do whatever it takes to take more money out of your purchase

Rickiej
Rickiej

I don't like Bill Kotick. He's a fat pig who steals your soul.