Activision Blizzard Reports 'Better-Than-Expected' Q3 2010 Results; Posts $51M in Profits

by Xav de Matos, Nov 04, 2010 6:00pm PDT
Related Topics – Activision Blizzard, earnings

Activision Blizzard released its Q3 2010 report, revealing the company had exceeded its prior outlook by $145 million.

Thanks in large part to franchises like Call of Duty, Blizzard's unstoppable MMO World of Warcraft, and the performance of StarCraft 2: Wings of Liberty, Activision Blizzard recorded net revenues of $745 million for the period--which ended on September 30--versus a previous revenue outlook of $600 million.

In the report, the publishing giant reported profits of $51 million for the quarter. During the same period last year, Activision Blizzard recorded net revenues of $703 million with a profit of $15 million.

Although impressive, the third quarter doesn't even consider two of Activision Blizzard's biggest titles of the year: Call of Duty: Black Ops and the upcoming World of Warcraft expansion, Cataclysm--both of which launch in the company's fourth quarter. In fact, as stated during an earnings call earlier today, it was noted that "100%" of its Q4 calendar is made up of "established" franchises. That means sequels.

During the call, and in the earnings announcement release, Activision Blizzard CEO Bobby Kotick said that he expects the fiscal 2010 to be the "most profitable year in [Activision/Activision Blizzard's] history with record operating margins." Activision Blizzard increased its outlook of net revenues from $4.18 billion to $4.28 billion.

For 2011, Activision Blizzard appears to have its focus on more from its biggest brands, announcing it will be "investing heavily" in the Call of Duty brand in the new year. Mentioned on multiple occasions was a new "first-person shooter, action title" in the Call of Duty universe, which we presume is the announced debut title from Sledgehammer. The publisher also noted that it will be pushing the Call of Duty franchise to new markets, around the world.

StarCraft 2: Wings of Liberty was given high praise during the earnings call, where it was noted that the sequel "almost sold more in its first month than World of Warcraft did in its first year." Activision Blizzard briefly discussed the game's commercial progress in Korea stating that the sequel is "slowly gaining in popularity" in the region and "transition" from the original game to the recently released sequel is expected over time.

But the real focus was reminding everyone that Call of Duty: Black Ops would hit stores next week. "[Call of Duty: Black Ops] is likely to be the biggest entertainment launch of all time," Kotick proclaimed during the call. He might not be wrong, this time.




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