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Last updated: February 12, 2009 5:55 am
Activision Blizzard, the largest video game publisher, reported recession-resistant results on Wednesday, with record revenues and profits, in sharp contrast to the fortunes of rivals.
However, its shares fell as much as 9 per cent in after-hours trading to $8.60 as forecasts for its March quarter of $550m in sales fell short of analyst expectations of $628m. The publisher of best-selling franchises Call of Duty, Guitar Hero and World of Warcraft said it had surpassed profits and sales targets a year ahead of plan for the merger of Activision and Vivendi’s games division, which was completed last July.
For the busy December quarter, it reported $2.3bn in revenues and a profit of $429m or 31 cents a share on a non-GAAP basis. It exceeded $5bn in revenues for 2008, after forecasting that it would achieve $4.3bn in revenues only in 2009.
Bobby Kotick, chief executive, told the Financial Times that Activision was forecasting revenue growth and margin expansion this year on a constant currency basis. “The market is growing for people who have the very highest quality, most-appealing properties and products and, in our case, we have a collection of franchises that are the most in demand,” he said.
Electronic Arts, Activision’s closest rival, reported December quarter results below its expectations, significantly reduced its outlook and announced 1,100 jobs cuts – 11 per cent of its workforce. THQ also disappointed with its results and said it was cutting almost a quarter of its workforce.
Software unit sales grew 15 per cent in the US last year, according to the NPD research firm, as the industry appeared to be a stand-out in bucking the recession. But Nintendo, helped by in-house titles for its best-selling Wii and DS consoles, and Activision Blizzard have been the chief beneficiaries.
Mr Kotick said the company had no plans to make large cuts like its rivals. “We’re fortunate that all of the merger restructuring and right-sizing of the business is behind us,” he said.
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