Publisher reports 7% decline in April-June revenues as digital sales surpass retail; Hong Kong-set sequel bumped to 2011.
Activision Blizzard preempted its second-quarter earnings report with two notable achievements this week. First, the publisher said that Call of Duty franchise multiplayer map packs had now shifted more than 20 million units, and a day later announced that Blizzard Entertainment’s Starcraft II had sold 1.5 million units within 48 hours. However, the game company’s actual earnings report wasn’t uniformly positive, as the April-June period saw sinking revenues but growing profits.
For the three-month period, Activision Blizzard said total revenues came in at $967 million, down 7 percent from the $1.04 billion brought in a year before. Net income saw a significant bump during the period, however, rising to $219 million from $195 million during the year prior.
Activision Blizzard chief operating officer Thomas Tippl attributed the revenue shortfall to foreign exchange rates. He also said that Bizarre Creation’s Blur and Raven Software’s Singularity underperformed during the quarter. Of note, neither title cracked the NPD Group’s top 10 retail sales chart during their debut months of May and June, respectively.
Activision Blizzard said that earnings during the period were driven by the continued success of its stalwart Call of Duty and World of Warcraft franchises. Of the former, Activision Blizzard said Modern Warfare 2 was the No. 3 overall franchise in the US during the quarter, a ranking that rose to No. 1 in the first-person shooter space.
The publisher also used its second-quarter earnings report to reveal one change to its 2010 release schedule. Once slated for a fall 2010 release, United Front Games’ True Crime: Hong Kong is now expected to arrive in 2011. According to Activision Blizzard, the delay was necessary “in order to give the development team more time to deliver the high-quality entertainment experience they envision for the game.”
Despite the delay, Activision Blizzard maintained its outlook for its 2010 calendar year, thanks to an increase in expectations from the Call of Duty franchise during the fourth quarter. As such, the publisher still plans to pull in $4.2 billion during the year, with earnings per share expected to hit $0.49.
As part of a post-earnings conference call, Activision Blizzard CEO Robert Kotick also offered some deeper insight into the publisher’s earnings. “This is the first quarter that our sales from online channels outweighed our retail results,” Kotick said. The publisher also noted that digital online sales grew more than 20 percent year-over-year during the quarter.
During his portion of the conference call, Tippl confirmed that the Guitar Hero franchise has sold nearly 40 million units through the quarter. He also briefly touched upon the Infinity Ward situation, which saw a number of defections after studio heads Vince Zampella and Jason West were fired in March. According to Tippl, Activision has this year hired some 60 employees to work at Infinity Ward and Sledgehammer Games, which is at work on an action adventure set in the Call of Duty franchise.
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Kmart holding inventory clearance sale; Wii, 360, PSP all discounted originally appeared on Joystiq on Sun, 08 Aug 2010 11:30:00 EST. Please see our terms for use of feeds.
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