Activision Q2 revenue slips 15 percent

Number-two publisher's revenue beats guidance, but falls year-on-year; SEC stock probe prevents final profit tally.

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Last week, Electronic Arts surprised many pundits by reporting better than expected earnings for the July to September quarter. Today, its archrival Activision also reported its earnings, which were also better than expected. Net revenues for the quarter, the second of the publisher's 2007 fiscal year, were $188.2 million. The figure was a 45 percent increase over the estimate of $130.0 million Activision gave to investors in August.

That was the good news. The bad news was that Activision's earnings were $34.3 million below the $222.5 million the company pulled in during the second quarter of its 2006 fiscal year, a 15 percent decline. Net revenues for the six months ended September 30 were $376.2 million, which is $87.4 million down from the $463.6 million the company took during the same period the year prior.

"Our revenue over performance was driven by improving market conditions and the continued success of our franchises including Call of Duty, Guitar Hero, and World Series of Poker," Activision CEO Bobby Kotick told analysts at a postreport call. He also underlined the fact that the Xbox 360 Call of Duty 2 has sold more than 1 million copies in the US alone. That makes it the top title for the 360, which also generated $1 million for Activision via royalties from premium Xbox Live content--much of which was for Call of Duty 2.

However, what Kotick didn't tell analysts was what Activision's net income--aka profit--for July to September quarter was. That was because that, like several other publishers and tech companies, Activision is being investigated by the Securities and Exchange Commission for stock-option irregularities. The investigation was revealed to the public on July 31.

For the October to December quarter, Activision is now expecting revenues of approximately $600 million. The company is supporting the November 17 PlayStation 3 launch with three titles--Tony Hawk's Project 8, Call of Duty 3, and Marvel: Ultimate Alliance--and the November 19 Wii launch with five: Tony Hawk's Downhill Jam, Call of Duty 3, Marvel: Ultimate Alliance, Rapala Tournament Fishing, and World Series of Poker: Tournament of Champions. Tony Hawk's Project 8 and COD3 are also set to ship for the Xbox 360 and current-generation consoles.

Discussion

25 comments
xtiansk8
xtiansk8

dude, im friggin buyin dis friggin game dude!!!

JeTGoDLiKe
JeTGoDLiKe

WoW cod3 only on consels good becuase i h8 pc nerds that h8 us consel gamers. LoL there r only like 10million nerds that play pc games and about 100,000,000people that play on consels

Romayo83
Romayo83

COD3, cant wait! online is gunna be sick

Humorguy_basic
Humorguy_basic

Yet another video game publisher with lower profits. All so far have had double digit percentage lower profits. This is known as the calm before the storm. With poor Xmas sales looming and then the question mark over the Wii's retro angle and even more so, the PS3's $800 price point and $100 games, the poop could really hit the fan in 2007 and leave us with a very different view of video gaming as we come to this time next year.

Humorguy_basic
Humorguy_basic

[This message was deleted at the request of the original poster]

wytefang
wytefang

This is interesting news. I can't help but enjoy Activision's issue, especially in light of their insulting decision to only release COD3 on consoles. You reap what ya sow, Activision. MUHAHAHAHAHAH...

vampiredust99
vampiredust99

Activision has a great portfolio of brands, should keep it growing for a while yet. This income fall was just a blip. Wall St sucks ass, needs to examine the company's prospects a bit better (or fire some of the analysts who don't know **** about games)

dirty_scorpion
dirty_scorpion

i like Activision games :) one of my favourite game companies there is out there, keep up the good work.

cuitexcutei
cuitexcutei

Na, I disagree, Activision makes really good games like the Call of Duty franchise. They are still my most favourite first person shooters

KingofTrolls
KingofTrolls

Activision sucks. They make trash games and re-hashed trash games. I stay away from this company like the plague and I hope they fold and go belly up.

RaiKageRyu
RaiKageRyu

Don't do anything bad Activision. Play safe.

VegetaMaelstrom
VegetaMaelstrom

I wouldn't shed any tears for any Activision executives if they ended up with some jail time for their alleged stock-option irregularities (or stealing to us common folk). It's about time this industry was cleaned up a bit at the top.

pXxJoSexXp
pXxJoSexXp

can't wait for THP8 and CoD 3 :D

falcon11
falcon11

The Tony Hawk Games are getting a bit old, but CoD3 and now that they have Red Octane and Harmonix, Guitar Hero II Release tommorow will also bring in major cash! I got mine paid off!!! Cant wait!

D_Mainge
D_Mainge

That's good for Activision.

juanfraino
juanfraino

Good for them. Cant wait for CoD 3 :)

strategyking92
strategyking92

I've dreampt of the day when ea would have another big rival,software rival.

CHayes451
CHayes451

First non-double-posted comment!

cfreeleywow
cfreeleywow

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

cfreeleywow
cfreeleywow

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