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Activision’s Big Titles Keep It Warm in the Cold Recession
5-Nov-2009
Written by: Justin Key
Guitar Heroes and Tony Hawks keep the company afloat as the video game industry struggles.
Sequels over originality. Franchises over taking chances. In the spirit of 20 "Saw" movies and 18 "Halo" releases, one of the only video game companies to turn profits for this year is Activision Blizzard, Inc. And what titles should receive this credit, you ask? None other than "Guitar Hero 5," the "World of Warcraft" series, and the soon-to-be-released "Call of Duty: Modern Warfare 2," which is looking to be one of the biggest entertainment releases of the season.
The recession has hit the industry hard after a record high in 2008. The NPG Group, GfK Chart-Track Ltd., and Enterbrain Inc, all listed a 6 percent decline in the world's three largest game markets for the third quarter. The U.S. itself experienced a 9 percent decline. People just don't have the money to spend on the luxury anymore.
With lowered prices and a lineup of hit franchises, Activision has been able to make positive of the situation. Even more, the company's online subscriptions to the digital crack formerly known as "World of Warcraft" has kept revenues fairly protected.
Activision reported Thursday a net income of $15 million for the latest quarter, approximately a penny per share. However, its revenue went from a hardly noticeable $711 million to $703 million. Its adjusted sales surpassed the Wall Street expectation of $724 million to reach $755 million. During after-hours trading, the company's shares went up 2.3 percent (25 cents) to $11.12.
Despite a great lineup for the holidays (read: more rehashes, fully slated with a "Tony Hawk" game), CEO Bobby Kotick says he has no prediction of how consumers will spend this fall. That aside, both Wall Street and the company expect to end the year with $4.5 billion in adjusted revenue for the quarter.
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