Activision Blizzard Q1 revs jump 33% to $1.3 billion

Controversy-plagued publisher beats raised guidance, net profits double to $381 million for January-March quarter.


Though Activision Blizzard's ongoing Infinity Ward debacle remains a cloud on the horizon, the publisher's first-quarter results offered no indication of future uncertainty. Having raised its earnings per share and revenue guidance in April, Activision Blizzard today said that results for its January-March quarter had beaten even those revised projections.

Modern Warfare 2 continued to propel Activision Blizzard's earnings.
Modern Warfare 2 continued to propel Activision Blizzard's earnings.

For the three-month period ended March 31, Activision Blizzard reported revenue of $1.3 billion, up 33 percent from the $981 million it logged during the same period in 2009. The publisher also saw a spike in profit, which rose 101 percent to $381 million compared to a year prior, with earnings per share coming in at $0.30.

"Our better-than-expected first quarter performance was driven by strong global consumer demand for Activision's Call of Duty and Blizzard Entertainment's World of Warcraft," Activision Blizzard CEO Bobby Kotick said in a statement. "Activision's Call of Duty: Modern Warfare 2 was the number one title overall in the US and Europe for the quarter, which illustrates the continued momentum of our catalogue."

Modern Warfare 2's first map pack, the Stimulus Package, has also proven to be a boon for the company. The $15 map pack sold more than 1 million units within 24 hours upon its launch for the Xbox 360 in late March, and sales have since topped 2.5 million. As part of its post-earnings conference call today, Kotick noted that some 17 million Call of Duty map packs have been purchased through the end of the quarter--a figure that doesn't include the just-released PlayStation 3 and PC editions of the Stimulus Package.

Beyond its money-minting Call of Duty and World of Warcraft franchises, Activision Blizzard also said that it saw strong performance from Band Hero and Cabela's Big Game Hunter 2010. Those games performed especially well on the Wii, with the publisher noting that it finished as the number-one third-party publisher on Nintendo's system during the quarter.

The end of Activision Blizzard's quarter proved to be a tumultuous one. After firing Infinity Ward heads Vince Zampella and Jason West during the first week of March, the publisher was hit with a $36 million lawsuit by the two stemming from unpaid bonuses.

After mass defections of many senior-level Infinity Ward developers to West and Zampella's new studio--the Electronic Arts-backed Respawn Entertainment--the publisher was hit with a second lawsuit from current and former Infinity Ward employees, to the tune of $125 million-$650 million.

As part of its conference call today, Kotick noted that Infinity Ward will remain in operation despite the departures, after analysts feared that the publisher would shut it down. He did note that some 35 developers have now left the studio following the West-Zampella fallout, saying that Activision Blizzard expects "a few more" to leave in the near future.

News wasn't all negative out of Activision Blizzard during the quarter, however. The publisher announced a new Call of Duty business unit, one that sees Treyarch creating the just announced Black Ops, Sledgehammer making a franchise-themed action adventure, and Infinity Ward continuing with Modern Warfare 3. Activision Blizzard also plans to launch a Call of Duty-branded massively multiplayer online role-playing game in Asia.

The company also surprised many by announcing an exclusive 10-year publishing deal with Halo creator Bungie last week. The studio is currently working on a "new intellectual property" in its "next game universe," one that has been rumored to be an action role-playing game.

Activision Blizzard also announced earlier this week that Starcraft II: Wings of Liberty, the first new installment in Blizzard Entertainment's sci-fi real-time strategy franchise in more than 10 years, will arrive on July 27. The third World of Warcraft expansion, Cataclysm, is also due out by year's end. Analysts predict that the two titles will help Blizzard sell 12 million games this year alone.

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