Activision expects record-breaking revenues

California-based publisher reports record preliminary net revenues for its fourth quarter and fiscal year ended March 31.

After a record holiday season, publisher Activision has beaten even its own revised estimates for the January to March quarter and is now predicting $313 million coming in revenue. The company's original estimate on January 25 was $170 million, which it revised at the beginning of February to $200 million--but is now expected to be some $113 million more.

Perhaps more impressively, preliminary figures indicate net revenues for the full fiscal year reached $1.51 billion. That's slightly up over the previous year's figures of $1.47 billion, and the company's outlook of $1.40 billion. That represents the highest full-year revenue total in Activision's history, which the company attributed in part to Marvel: Ultimate Alliance, Call of Duty 3, and Tony Hawk's Project 8.

Strong Q4 figures were credited to the success of Guitar Hero II and Call of Duty 3, as well as "better-than-expected performance of the company's distribution business due to the European launch of the PlayStation 3."

However, it wasn't all positive news for Activision. The publisher also provided an update into its ongoing stock-options scandal, and said it would be redoing the books to reflect that it had given employees an additional $67 million in stock-based compensation over a 13-year period. The company expects its full fourth quarter earnings to be "significantly impacted" by expenses related to the scandal, from internal investigations to legal fees.

Activision also stated that it did not expect to report its full financial results before the end of May, by which time it hoped to complete its stock-options review and file amended financial statements. It has also been given an extension by NASDAQ to regain listing compliance, originally due on May 9.

Analyst reaction was quick--and thoroughly positive. NCPI's Todd Greenwald reiterated his "Buy" recommendation. "While expectations are high for this company, and everyone likely knew they would beat numbers, the magnitude of this beat is certainly above expectations," he commented.

Lazard Capital Markets also maintained its "Buy" recommendation. "More important than March quarter results, we believe Activision remains well positioned for strong growth in financial year 2008," analyst Colin Sebastian said in a note. "[The year will be] driven by a robust product release schedule, including [upcoming] releases Spider-Man 3 and Shrek the Third, the Xbox 360 version of Guitar Hero, and Tony Hawk's Downhill Jam on the PS2."

However, the upbeat outlook did not buoy Activision's stock. As of press time, the publisher's shares were actually trading down $0.08 at $20.77 a share on the NASDAQ.

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Discussion

42 comments
theKSMM
theKSMM

Good news for Activision, though I'm surprised that they raked in so much dough off the titles mentioned. I guess they positioned themselves just right in a transitional market.

evildraxis
evildraxis

Well of course the sods are raking in the dough. Ten bucks for eight new characters on Marvel Ultimate Alliance. Six bucks for three songs on Guitar Hero II on 360. A sub par Spider-man 3 game that everyone rushed out to buy. Their gains are the children of their loyal gamers' empty wallets and broken dreams. Melodramatic, I know, but true. They need to step up the quality next quarter.

inkwolf
inkwolf

Wow porphyrous, you are a wellspring of knowledge. Thanks for the nifty history lesson. :)

_Piranha_
_Piranha_

Call of Duty 1 - 2, Return To Castle Wolfenstein...

rokkuman09
rokkuman09

It's definitely a possiblity.. they have been releasing some good games. When you release good games (most of the time) people will buy them.

porphyrous
porphyrous

Activision wasn't just one of the first 3rd party publishers....they *were* the first. Founded in 1980 by disgruntled Atari programmers who wanted to see game designers recognized for their efforts. Atari kept the identity of their programmers secret so other companies wouldn't hire them away (and in the case of Pac-Man and E.T. for the 2600, for their own safety, no doubt ;-) ). Activision instead turned their game designers into rock stars. They had to win a lawsuit against them from Atari just to gain the right to publish their games. They won because reverse engineering wasn't illegal in those days. If they had attempted to do that today, Atari would have used the Digital Millennium Copyright Act to silence them. Food for thought. They're also notable for preserving the memory of one of the most innovative and fondly remembered companies in PC gaming, Infocom. They didn't invent the adventure game, but they made the idea feasible. Activision bought them in the late '80s and still offers all 27 Infocom text adventures on CD-ROM, I believe, called The Lost Treasures of Infocom. . The first Activision game I ever bought was Pitfall! for the Atari 2600 in 1981. I'm so happy for them that their gamble 27 years ago has led to this. Congratulations, Activision! I am eagerly awaiting the Wii version of Guitar Hero 3. :-) David V

R3DN1N3
R3DN1N3

......hmm...........I've played Guitar Hero 1 and 2 but I just don't see what all the fuzz is about. My friend plays the damn game all the time and I admit, it's a fun game with friends but it doesn't hold my attention very long.....

faseli
faseli

COD 3 does come in official Microsoft bundles within Europe, as does Pro Evo 6 and the latest WWE game. Though i would imagine that these stocks have run dry, as these special edition Xbox 360 premium packs were part of Microsoft's Christmas push.

pooq
pooq

Quote: bossjimbob "COD3 doesn't come with 360 bundles unless a store decides to include it. Generally, MS bundles would include a first-party game like PGR3, Kameo, or the forthcoming Forza 2. Those COD3 sales numbers are likely pure off-the-shelf sales." Guess who pays chain stores to make those packages... not Microsoft... the people who make the games. I haven't seen any of those packages (including COD3) but stores make random packages with games, just so they have more on the sales receipts. When you get a discount for buying the package however, the companies involved in the package makes up the difference to the store for pimping their product.

Korny_boy
Korny_boy

go go go, guitar hero is awsome, more games and songs

TrumpyTheDog
TrumpyTheDog

As for COD3 on PC... be thankful you didn't get it, its not like you missed the 2nd coming of Christ or anything.

arc_salvo
arc_salvo

Great, so where's COD 3 for the PC? Like GIJesse said, if they want more revenue, they should release COD 3 on the system the COD series started on!

zsc4
zsc4

Makes sense, good on them :)

Humorguy_basic
Humorguy_basic

Always want to see PC game income year on year, as when a publisher has a good year, it's always the console releases that are mentioned. Got a feeling PC game sales as a proportion of Activision's income is a darn sight smaller than 5 years ago! Sad that, verysad, for the format that started it all really.

jonnyringo_2007
jonnyringo_2007

Activision has been around forever, they we're one of the originals developers for Atari 2600 games, Pitfall I think, glad they're still around. Meanwhile EA's is devouring everyone else up.

jonnyringo_2007
jonnyringo_2007

Activision has been around forever, they were one of the original developers for Atari 2600 games, Pitfall. Interesting because they have their generic value games but still have a really good elite line as well. COD4 for the PC eh... when did they make 3 for the PC?

GizmoVirus
GizmoVirus

Hopefully this will lead to more games development

Oni
Oni

It's good to see them doing so well! Now if they can just keep up this momentum till X-mas!

axelone
axelone

[This message was deleted at the request of a moderator or administrator]

xElite_GameRx
xElite_GameRx

better revenue means a more confident team leading to better games. I can't wait to see what they will come up with for my PS360.

RaiKageRyu
RaiKageRyu

Activision seems to be doing well.

GIJesse77
GIJesse77

whats trinity ward and COH3?

IpodHero176
IpodHero176

That's good, but what songs are going to be in GH3?!!

anarchicgoth
anarchicgoth

good for them- its nice to see gaming companies on the rise :)

Makhdoom82
Makhdoom82

If they are going to break the record ..... then they won't be able to back up !!! :D

comthitnuong
comthitnuong

They currently have out a lot of good titles. They just have to keep them coming...(and lower the prices of the Guitar Hero II DLC...)

GrimGravy
GrimGravy

mehfuz trust me ya did not miss much with COH3 trinity ward is where it is at

gamenux
gamenux

OK, who gave them money? :)

Mehfuz
Mehfuz

bring COD 3 for PC, revenue will go up more than that

_Pedro_
_Pedro_

no word on quake wars..

vee36
vee36

[This message was deleted at the request of a moderator or administrator]

encognito27
encognito27

[This message was deleted at the request of a moderator or administrator]

Reetesh
Reetesh

Its good to see a shift from last years, "closing down" news for many game companies:D

Proman84
Proman84

Nice. Now how about making the games cost a little chaeper and who knows, maybe just maybe Activision will make EVEN MORE money.

bossjimbob
bossjimbob

Quote: CaptainCrazy "Great job pulling in the dough but I think it has something to do with COD3 being packaged with all the new 360 systems." COD3 doesn't come with 360 bundles unless a store decides to include it. Generally, MS bundles would include a first-party game like PGR3, Kameo, or the forthcoming Forza 2. Those COD3 sales numbers are likely pure off-the-shelf sales.

CaptainCrazy
CaptainCrazy

Just wow, how could their estimates be off by almost half the revenue? Great job pulling in the dough but I think it has something to do with COD3 being packaged with all the new 360 systems.

Lasafrog
Lasafrog

Go Activision! Wow, I'm first, for the first time. Too bad this is boring news or I'd screen capture for posterity... :)