Activision Blizzard surpassed Wall Street’s revenue estimates in the crucial holiday quarter despite poor sales of the latest Call of Duty game.

The stock jumped as much as 11 per cent after-hours as the video games publisher unveiled a $1bn share buyback plan and a 15 per cent dividend increase to 30 cents, as well as its slate of releases for 2017.

Revenues at Activision Blizzard grew 49 per cent in the December quarter to $2.01bn, boosted by its acquisition of Candy Crush maker King Digital and strong digital sales. Including deferred revenues, fourth-quarter sales of $2.45bn exceeded analysts’ estimates of $2.38bn.

King has been testing advertising in its games to accompany in-app purchases of power-ups and extra lives, which Mr Kotick said were “very promising as the basis for meaningful new revenue streams”.

Overwatch, the latest multiplayer game from Blizzard, proved a hit for the group in 2016, driving monthly active users during the year to 36m, up 37 per cent year-on-year.

Activision also confirmed that a sequel to 2014’s first-person shooter Destiny is on track for release later this year.

A poor reception to the latest Call of Duty, Infinite Warfare, did not stop a record number monthly active users and in-game revenues from the franchise, in part due to players’ ongoing spending on the previous year’s edition, Black Ops III.

Analysts at Baird have estimated that physical and digital sales of Infinite Warfare, which was set in outer space for the first time, declined around 20 per cent year on year. Activision said on Thursday that the next version would go “back to its roots”, suggesting a more traditional warfare simulation.

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