Activision's revenue miss overshadows 'Call of Duty' success

Reuters News
Posted: Feb 11, 2016 4:22 PM

By Sai Sachin R and Anya George Tharakan

(Reuters) - Activision Blizzard Inc's revenue and profit for the holiday quarter missed market estimates, as strong sales of its latest "Call of Duty" videogame failed to offset lackluster demand for role-playing title "Skylanders: SuperChargers".

The videogame maker's shares plunged 16.4 percent to $25.50 in extended trading.

"Call of Duty: Black Ops III" was the highest-selling physical videogame in the United States for the whole of last year, according to research firm NPD, despite its launch in early November.

However, the latest "Skylanders" game, which was released in September, and music videogame "Guitar Hero Live", launched a month later, performed weaker than its expectations, the company said.

Activision said performance of "Skylanders" took a hit from rising competition in the genre.

Activision has been trying to create new sources of revenue by buying "Candy Crush" maker King Digital, and creating an e-sports division and a film and TV studio.

The King Digital acquisition, which Activision expects to close this month, gives it a bigger foothold in the highly-addictive mobile gaming space as well as a large female audience.

When the King acquisition closes, Activision Blizzard will have 500 million monthly active users, more than Snapchat and Twitter Inc combined.

Activision Blizzard has raked in significant dollars from the "Call of Duty" franchise, with the latest "Black Ops" title generating more than $550 million in global sales in the first three days of its release.

"Black Ops III" is a military first-person shooter like the earlier "Call of Duty" games and is set in a dystopian future in 2065.

The company also said it plans to launch a new "Skylanders" game in 2016.

ABC Protects Verbally Abusive Host
Jeff Crouere

Activision, also known for its "World of Warcraft" and "Hearthstone" franchises, forecast first-quarter adjusted profit of 11 cents per share on revenue of $800 million, which includes results from King.

The company's adjusted net income was 83 cents per share for the fourth quarter ended Dec 31.

Excluding items, revenue fell 4.3 percent to $2.12 billion from a year earlier, lagging the company's own forecast of $2.15 billion.

Analysts on average had expected a profit of 86 cents per share on revenue of $2.20 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Anya George Tharakan and Sai Sachin R in Bengaluru; Editing by Anil D'Silva)