Activision Q1 revs soar 163 percent

Guitar Hero II and Spider-Man 3 spur nearly a half <i>billion</i> in sales for the publisher; PC Quake Wars reconfirmed for current quarter.

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Though it faces stiff competition from Rock Band in the fall, for the moment, the Guitar Hero franchise is a money-minting machine. Massive sales of Guitar Hero II helped propel Activision into the earnings stratosphere during its first fiscal quarter, which saw the company's quarterly income soar 163 percent.

Activision's $495.5 million April-June net revenues bested those of archrival Electronic Arts by more than $100 million, earning it $27.8 million in net income ($0.09 earnings per share). By contrast, the Santa Monica-based publisher took in just $188.1 million during the same period in 2006, posting a net loss of $18.3 million.

Besides Guitar Hero II, which was the top-selling non-handheld and non-PC game for the quarter, Activision's other big titles for the quarter were the multiplatform film tie-ins Spider-Man 3 and Shrek the Third. Despite middling reviews, the former sold more than 876,000 units on all platforms in the US according to NPD, generating in excess of $38.7 million. The latter game also overcame critical scorn to sell more than 276,000 copies domestically during the quarter, generating a $10.3 million haul.

"During the quarter, we shipped more than 8 million units of new game releases worldwide," Activision chairman and CEO Bobby Kotick said in a statement. "For the first six months of the calendar year, Activision was the number one third-party US publisher on the console and handheld platforms."

As a result of its banner 2007 performance, Activision is raising its earnings guidance for its full fiscal year, which ends on March 31, 2008. The company now believes it will take in $1.87 billion in earnings, up from $1.8 billion. Before the end of the current calendar year, the company will ship Tony Hawk's Proving Ground, Guitar Hero III: Legends of Rock, Call of Duty 4: Modern Warfare, Spider-Man: Friend or Foe, and the Bee Movie Game.

For the July-August quarter, the company is forecasting $250 million in revenues for a net loss of $0.04 per share. So far, it has released the film tie-in Transformers: The Game and the expansion Guitar Hero Encore: Rocks the 80s, to mixed reviews. Much to the delight of shooter fans, the company also reconfirmed today that it plans to release the PC edition of Quake Wars during the July-September quarter. PlayStation 3 and Xbox 360 editions of the game are currently slated to arrive later in the year.

In after-hours trading, Activision's stock had risen $0.50 (2.73 percent) from its closing price to $18.80 per share.

Discussion

54 comments
Turisman4
Turisman4

Wow, now that's a profit margin. There's probably going to be a big corporate party this week, too.

maxmax1234
maxmax1234

call of juaris is way better then gun.

Treifla
Treifla

CoD 3 was by far the best, the only game that even bothered to meantion that the canadian forces and the french resistance even contributed to the war (even though the candians were the best pilots, strongest shock troops and were the only forces to complete all of their objectives on D-day ;-) ) behind number three was finest hour, just for the multiplayer alone.

JehovaWrinkles
JehovaWrinkles

It's time like these people, where you really wish that you could somehow just win the lottery.

maxmax1234
maxmax1234

wow, yea, this definetly whas there best year, there where some asome games from them.

polsci1503
polsci1503

GH3 and CoD4 will do very well. The new Tony Hawk game will sell too. What does Activision have slated after that?

StanBlocker
StanBlocker

I an didn't contribute to any of it. I like Activision but nothing tickled my fancy. Not even GH2

lamprey263
lamprey263

For the most part, I love the Call of Duty series, except I hated the CoD3. Well, I'm glad they moved the series in another direction.

bobbarkerfan1
bobbarkerfan1

Activision is awesome!!!! EA is only good at making sports games, they should stop making all other games. The Medal of Honor series is making them look bad, those games are terrible. Go Call of Duty! I still wish that they made a call of duty game that takes place in the pacific theater.

zapper188
zapper188

Wow, Call of Duty 4 Wait until they release that, then the biggest, fattest, hugest paycheck ever will be right through the door for Activision. Plus GH111 Hell, They're going to be earning more then EA soon and bigger too.

VolcanoMan001
VolcanoMan001

So, this explains the EA aquisition of Rock Band. If someone is making money then EA is sure to steal it.

Reetesh
Reetesh

Thats cool! They are now a BIG competition for EA

1PSman
1PSman

CALL OF DUTY $ is going to be so awsome it was E3 2007 best show by g4 nuff said

comthitnuong
comthitnuong

Maybe with all of this money, they can lower the price on downloadable tracks?

okassar
okassar

Yep,it's Guitar Hero 2....Red Octane shoulda' kept it,cash money!

jorranvv
jorranvv

thats a lot of money!(all because guitar hero)

SidV101
SidV101

if theyre revenue raised 163% with just GH2, shrek, and spiderman, imagine what's gonna happen when they also have Call of Duty 4, Guitar Hero 3, and Tony Hawk Proving Grounds out.

pete_merlin
pete_merlin

jumping? hmmmm no theres loads of other great games coming out this year. although gta4 was the game i wanted most and i have had it preordered since may2006 after it was announced from play.com but i can wait some more :D

jacob-goodlich
jacob-goodlich

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

Delongman
Delongman

COD 4!!! I'm certain they'll make big cash there!

ketsuatama
ketsuatama

Good sales of S3 and Shrek shows the power of hype in driving consumer decisions. On the other hand, maybe a lot of people want to play relatively "good clean fun" type of games!

Nexeus
Nexeus

Spider-man 3 sucked.... but hey nicley done activison, why not use some of that money to MAKE ANOTHER ULTIMATE ALLIANCE!!!! and another ultimate destruction

azizrulez
azizrulez

someone sure has picked up their game after disappointing last year, although i still cant digest why so many people bought a crappy game like Spider-Man 3

DJSMITH007
DJSMITH007

Activision has some really good games coming out in Q4 such as Quake Wars.

ToxicMold
ToxicMold

Pretty soon everyone will start hating Activision just like they did Electronic Arts.

lilmp89
lilmp89

WOW Great news for them. Not surprising with all the GH games.

bradly_2795
bradly_2795

If Activision keeps this up I think they will overtake EA as the best publisher in the US. EA's games aren't as good as they once were. Activision has created a new powerful market with the GH franchise. Good job Activision. Keep it up and learn from EA's mistakes

Sacred-Snow
Sacred-Snow

Good job activision... just try to make the next guitar hero encore a little more meaty for the money...

Makhdoom82
Makhdoom82

This all shows that you don't need mass production of titles but few well placed and solid titles can make all the difference !!! Way to go Activision !!!

Gruug
Gruug

As far as I can see Activision is becoming what EA once was....a power house gaming supplier. Now, if they can maintain a tight reign on those that would cut things like QA to improve bottom line they should continue to do well. Hopefully, they will learn from EA's mistakes.

shortster1
shortster1

for rockband 200$ is a pretty good deal because look at guitar hero it's a 100$ and it comes with one guitar and rockband comes with everything imperial agent? still a bad deal?

Agreb91
Agreb91

Activision did more in June than EA, wow.

nilemonitor
nilemonitor

Quake Wars in Q3? I’ll believe that when I see it. Guitar Hero sux especially for real guitar players. It feels like a Fisher Price toy.

yian
yian

You mean when they came out with Dark Reign 2? Yeah, it was a rough time.

RiseFM
RiseFM

anyone remember when activision sucked?

Zuul13
Zuul13

Rock band is going to smother Guitar Hero III

lancezmfa
lancezmfa

Guitar Hero III vs. Rockband should prove to be interesting, I wonder who will come on top for sales?

yian
yian

Good games = happy gamers. Good news for both ends.

brokengammer
brokengammer

all right activision! you guys are badass with a heart of gold your games are awesome!!

abdito
abdito

activision make good games good games more mony

lamprey263
lamprey263

Activision has a well rounded strategy. They make crap movie-go-games that people will buy like Transformers, Spider-Man 3, and Shrek the Third. They make trendy franchise games like Guitar Hero. Then they make awesome games for the hardcore gamer. And they port these games to multiple systems. Very smart.