Activision bullish on video game sector

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Activision, the number-two US video game publisher, on Wednesday predicted a return to double-digit growth for the industry, helped by a new generation of consoles and the launch of Microsoft’s Vista operating system.

The Santa Monica company raised its revenue expectations from those given in a pre-announcement less than two weeks ago, predicting sales of $200m for its fourth quarter ending in March, up from $170m.

It explained it now had better visibility on the PlayStation 3’s launch in Europe in March.

Net revenue forecasts for the fiscal year were raised to $1.40bn from $1.37bn and it adjusted its loss per share forecast from 9 cents to 8 cents for the seasonally quiet fourth quarter.

In January, Activision pre-announced it had blown away expectations in its busiest holiday-season quarter with sales in the range of $822.8m compared to a prior outlook of $600m. Earnings per share of 41 cents were up from 23 cents a year earlier.

It confirmed these expectations on Wednesday with Bobby Kotick, chief executive, declaring the third quarter “the largest and most profitable quarter in our history.”

“Fiscal 2008 will mark a new era in gaming, with double-digit growth expected to return,” he said, pointing to the launch of Vista as a powerful gaming platform and the worldwide availability of next-generation consoles.

Activision said its third quarter figures were boosted by the strength of its Call of Duty World War Two franchise, its Tony Hawk skateboarding games and two new properties – the Guitar Hero game that simulates playing the instrument and the Marvel: Ultimate Alliance superheroes game.

Guitar Hero II was the number one console and handheld game in dollars in the US in December and the company announced it would launch a version for the Xbox 360 console in the spring.

It said games linked to major movie releases – Spiderman 3, Shrek the Third and Transformers – would drive revenues at the beginning of its next fiscal year.

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