Analyst: Activision rocking harder than expected

Wedbush Morgan Securities' Michael Pachter says Guitar Hero publisher's sales estimates are too conservative.

Activision won't announce its results for its second fiscal quarter until November 5, but the publisher has said it expects to net $250 million in sales for the three months ended September 30.

That projection suggests a spike in revenues from the same period the year before of almost 33 percent. That's not bad by any stretch of the imagination, but Wedbush Morgan Securities analyst Michael Pachter today told investors he expects the actual results to be significantly better in a note subtitled "Encore: Activision Rocks the Quarter, Again."

Relatively few new releases will count toward the publisher's second quarter of sales, with the biggest being Guitar Hero Encore: Rocks the '80s and Enemy Territory: Quake Wars. However, the company's numbers for the three-month stretch may have benefited from the late-first-quarter release of Transformers: The Game and still-strong sales of Guitar Hero II for the Xbox 360. According to NPD figures, as of the end of August, US lifetime sales for the PlayStation 2 and Xbox 360 versions of Guitar Hero II had surpassed 3.5 million copies, generating nearly $270.5 million at retail.

Noting that Activision's US sell-through was up 122 percent for the quarter, Pachter revised his own revenue projections for the company's Q2 from $260 million to an even $300 million. That new figure would represent a second-quarter revenue surge of 59 percent year-over-year, and Pachter suggests even that figure may be conservative. As a result, Pachter believes Activision's second-quarter results will cause the publisher to revise its full-year estimates upward.

"We think guidance is extremely conservative and recommend that investors opportunistically add to positions," Pachter wrote.

23 Comments

  • MasterChief725

    Posted Oct 26, 2007 2:22 pm PT

    Best Publisher of 2007: Activision
    Best 3rd Party game of 2007: Call of Duty 4
    2nd Best: Guitar Hero III
    3rd best: Enemy Territory: Quake Wars
    4th best: Soldier of Fortune: Payback
    5th best: Guitar Hero II

    oh man...what a great year for activision, keep churning out the great games and crushing EA activision!

  • dorohala

    Posted Oct 25, 2007 2:45 pm PT

    Keep on bringing more decent games!!!

  • langer25

    Posted Oct 25, 2007 10:53 am PT

    nice!

  • kori911

    Posted Oct 25, 2007 10:44 am PT

    Hopefully more money equals more good games!

  • RebornJeremiah

    Posted Oct 25, 2007 8:40 am PT

    vass86:

    I bought GH2 too and even after beating the game and practicing to get good and such, the game never bores me. In fact I am getting GH3 soon so I can use both guitars to play Co-op. It will be double the fun!

  • vass86

    Posted Oct 25, 2007 8:24 am PT

    i bought guitar hero 2 and at first it was enjoyable but after a short time it becomes obvious how shallow the game is. you practice to get good and then you can play the songs good. then thats about all you do...

  • JAREDJR

    Posted Oct 25, 2007 8:07 am PT

    I know I'll be buying Guitar Hero 3 for Wii next week. My first game of the series, so I'm looking forward to it.

  • Humorguy_basic

    Posted Oct 25, 2007 4:22 am PT

    Just wish we got a bit more PC game reporting. Always worried we only get the console side. I think people might be shocked if all of a sudden the media and publishers started giving the PC numbers. I think they are a highly guarded secret and not reported anywhere because they're really not good numbers at all!

  • ablance82

    Posted Oct 25, 2007 12:22 am PT

    well i think rock band is a good deal as u dont need to hav 4 people to play it u could paly it by yourself
    and anyway it is value for money cos the bundled rock band is $169 , but rock band is like buying guitar hero=$100, singstar $60 and if it is made drum heroes probaly$100 .so it is a better deel .i am from the uk so i would hav done it in pounds but games get more expensive wen they cum over here and my pounds button doesnt work

  • XanderZane

    Posted Oct 24, 2007 10:48 pm PT

    I'm getting Guitar Hero III as well. Besides my song I don't have 3 other people who would want to sing, play drums and another guitar. Rock Band is definitely cool if you really have a Rock Band or a bunch of friends who wanted to rock together in a band. The experience is no where near as good as the real thing I'm sure. At least withg Guitar Hero III you can play along or with friends and not have to pay $150. That's nuts.

  • jdknight21

    Posted Oct 24, 2007 10:31 pm PT

    Average Joe doesn't know Rock Band was made by the same people that made Guitar Hero. Average Joe becomes less and less everyday with the internet, but they still exist. Rock Band, with its price and song list is probably going to regret that price and casual track list. Even though it is one of the best concepts to come around in awhile, it just fell into the wrong hands. Meanwhile, redundant GH3, that adds nothing but a new track list (and really good one) wll probably reap the benefits, since the Fox show that has the same font as Rock Band and was probably going to push it isn't doing so hot right now.

  • rockstar_88

    Posted Oct 24, 2007 9:22 pm PT

    How about a Piano Hero, Activision?

  • munsoned

    Posted Oct 24, 2007 8:09 pm PT

    they better be careful releasing new Guitar hero game every 6 months.because a fresh new game is on its way called rock band. so its gonna take longer then 6 months if they wanna stay on top.

  • fatty5xl

    Posted Oct 24, 2007 8:04 pm PT

    sunday 9am when i get gh3 .

  • mastertimx

    Posted Oct 24, 2007 6:43 pm PT

    who cares i'm still getting guitar hero 3 for my ps3. it's gonna be great

  • matt_dangelo

    Posted Oct 24, 2007 6:23 pm PT

    i would say..cod4 has something to do with this?

  • dumb_person1

    Posted Oct 24, 2007 5:56 pm PT

    interesting news.

  • Mush_Mouth

    Posted Oct 24, 2007 5:46 pm PT

    How about a medieval version of Guitar Hero called Lute Hero? Dress your minstrel in a large assortment of tunics and greaves, and watch as they turn it up to 11 to avoid being beheaded for bad performances!

    C'mon, it's kind of funny.

  • Jared_Vegeta

    Posted Oct 24, 2007 5:36 pm PT

    I really loved the demo. I was scared for GH after hearing Harmonix had moved on, but its looking pretty good. They definitly have the gameplay nailed. We'll just have to see how the songs hold up.

  • fireblazerx

    Posted Oct 24, 2007 5:16 pm PT

    That's great for Activision. I've always seen Activision's games as strong and very good. Glad to see them have the money rolling in.

  • Pete5506

    Posted Oct 24, 2007 5:16 pm PT

    ya ok

  • ZOnikJJ

    Posted Oct 24, 2007 5:15 pm PT

    Kewl!!!!!!

  • Lone_Wolff

    Posted Oct 24, 2007 5:08 pm PT

    That better be one kickass song list for GHIII or else they ain't making that revenue T_T

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