Activision’s first-quarter profit doubles
Activision Blizzard Inc., still cruising on momentum of the red-hot launch last year of its Call of Duty: Modern Warfare 2 game, on Thursday reported that profit doubled and revenue shot up 33% in the first quarter.
The Santa Monica game publisher posted a profit of $381 million, or 30 cents a share, on sales of $1.3 billion in the quarter ended March 31. That compares with $189 million in net income, or 14 cents a share, on $981 million in revenue a year earlier.
“The results definitely speak for themselves,” Activision Chief Executive Robert Kotick said in an interview. “Our key franchises are performing.”
Activision’s top property is Call of Duty. The latest title in the series, Modern Warfare 2, has generated an estimated $1.3 billion in sales worldwide, making it the bestselling independently produced console game of all time.
An add-on for the game, titled Modern Warfare 2 Stimulus Package, sold 1 million copies on March 30, the day it was released for download on Xbox Live. At $15 a pop, the release generated approximately $10.5 million for Activision in a single day, after a 30% cut that Microsoft Corp. typically takes for games downloaded from its Xbox Live online platform.
Management turmoil in recent weeks that led to the departure of key talent at Infinity Ward, the studio that developed Modern Warfare 2, however, raised questions about the long-term direction of the franchise. The company fired the two heads of Infinity Ward in March, who then sued Activision for allegedly withholding royalties from the sale of the game. Last week, 39 other current and former Infinity Ward employees filed a similar lawsuit against Activision.
For now, the franchise appears stable, with another installment due out this Christmas holiday. That title, Call of Duty: Black Ops, was developed by a separate studio, Treyarch.
“Activision’s game franchises are pretty healthy in spite of what’s happening with Infinity Ward,” said Colin Sebastian, an analyst with Lazard Capital Markets. “The impression was that things were falling off track, but for now Call of Duty remains strong.”
Activision’s shares fell 26 cents to $10.49 but regained the entire amount in after-hours trading after its earnings release.