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

By Tor Thorsen, GameSpotPosted Nov 5, 2009 2:08 pm PT

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.

137 Comments

  • valent1n

    Posted Nov 23, 2009 1:19 am PT

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

  • xthabeast

    Posted Nov 22, 2009 2:10 am PT

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

  • valent1n

    Posted Nov 11, 2009 1:10 am PT

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

  • mehrdad1987

    Posted Nov 8, 2009 3:16 am PT

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

  • mbrown726

    Posted Nov 7, 2009 8:35 pm PT

    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

    Posted Nov 7, 2009 8:05 pm PT

    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

    Posted Nov 7, 2009 6:54 pm PT

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

  • barkera0

    Posted Nov 7, 2009 4:23 pm PT

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

  • Zerobeam

    Posted Nov 7, 2009 2:15 pm PT

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

  • Petercairns

    Posted Nov 7, 2009 6:23 am PT

    Keep pumpin the plastic!!

  • DawnFang

    Posted Nov 7, 2009 12:58 am PT

    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

    Posted Nov 6, 2009 6:18 pm PT

    @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

    Posted Nov 6, 2009 3:49 pm PT

    @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

    Posted Nov 6, 2009 3:36 pm PT

    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

    Posted Nov 6, 2009 3:25 pm PT

    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

    Posted Nov 6, 2009 3:00 pm PT

    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

    Posted Nov 6, 2009 2:43 pm PT

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

  • MattHopeKids

    Posted Nov 6, 2009 2:42 pm PT

    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

    Posted Nov 6, 2009 1:51 pm PT

    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

    Posted Nov 6, 2009 1:14 pm PT

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

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