‘Call of Duty’ set to boost Activision

The video game industry may begin to pull out of its 2009 slump next week as Activision Blizzard, its largest publisher, launches what is expected to be the biggest game of this, or any year.

Pre-orders for Call of Duty: Modern Warfare 2, the latest in the series of “first-person shooter” games, are “higher than for any previous Activision title”, the company said on Thursday in its third-quarter earnings statement.

“We project [it] could be the largest entertainment launch of the year,” it added, implying its initial sales will beat any other video game, movie or book launch in 2009.

GameStop has gone further, predicting that Modern Warfare 2 will be the biggest launch in the retailer’s history when it goes on sale next Tuesday, based on record pre-orders for the title.

The release of Halo 3 in September 2007 holds the current record for an industry launch. It earned $300m in worldwide sales for its publisher Microsoft in its first week.

Since then, the number of owners of the Xbox 360, PlayStation 3 and Wii consoles has grown substantially and analysts at Wedbush Morgan Securities predict $500m in global sales for Modern Warfare 2 in its first week.

They say Activision could “easily sell 10m units in Q4”.

The fourth quarter, traditionally the biggest for the industry due to Christmas and the US holiday season sales, could restore publishers’ fortunes after six months of double-digit sales declines in the US between March and August. Sales grew slightly in September following cuts in console prices.

Activision claimed on Thursday it had the strongest holiday release schedule in the industry. Apart from Modern Warfare 2, it includes music-based games DJ Hero and Band Hero, Tony Hawk Ride, which has a skateboard accessory, and Bakugan Battle Brawlers, based on the popular TV show.

“The products that we’re putting in the market are the best that we’ve ever created,” said Bobby Kotick, Activision Blizzard chief executive.

“The great unknown is whether this economy results in consumers spending less money or not showing up at all,” he said in an interview with the Financial Times. “That’s going to have an impact on everybody and there’s nothing that we’ve really seen that would suggest the economy is turning round, so I think there’s risk.”

Activision reported better than expected sales in its third quarter. Revenues of $755m beat Wall Street estimates of $726m and its own guidance of $700m. Earnings of 4 cents a share were as expected.

Sales were driven by the launch of Guitar Hero 5 in September and the success of its ‘World of Warcraft’ online role-playing game.

The publisher expects sales to almost triple in the fourth quarter to $2.2bn for profits of 43 cents a share.