UPDATE 2-Activision sees strong holiday sales, lifts 2014 view, shares jump

Tue Aug 5, 2014 6:17pm EDT

(New throughout, adds full-year forecast, executive quotes and holiday lineup)

By Malathi Nayak

SAN FRANCISCO Aug 5 (Reuters) - Video game maker Activision Blizzard Inc raised its full-year 2014 forecast, citing better-than-expected second quarter results and expectations of strong sales for upcoming titles like "Call of Duty: Advanced Warfare" and "Destiny."

Shares of Activision jumped 3 percent in after-hours trading after closing at $22.36 on the Nasdaq on Tuesday.

The Santa Monica, California-based company said robust digital sales of its "Call of Duty" and "World of Warcraft" game franchises drove non-GAAP net revenue up to $658 million in the second quarter from $608 million a year earlier. It beat the $608 million expected by analysts.

"Digital revenue represented 73 percent of the total for the quarter and that's a record for us," Chief Executive Bobby Kotick said in an interview. "We had over-performance in the quarter and we feel very enthusiastic about the products we are releasing for the back-half of the year."

"'Advanced Warfare,' the new 'Call of Duty,' I would say that will be the most successful game of 2014."

Activision, also known for its "Skylanders" games, raised its 2014 non-GAAP revenue forecast to $4.7 billion and said it expects non-GAAP earnings of $1.29 per share. It had previously announced a forecast of $4.67 billion in non-GAAP revenue and $1.27 per share of non-GAAP income.

The company's second-quarter non-GAAP income, adjusted for the deferral of digital revenue and other items, was 6 cents, down 2 cents from a year ago. But it beat Wall Street's average estimate of 2 cents per share, according to Thomson Reuters I/B/E/S.

Activision's holiday lineup includes "Call of Duty: Advanced Warfare" the new installment from its hit military-action game franchise and "Skylanders Trap Team" from its billion-dollar game franchise for children.

On Sept. 9, it will release its new sci-fi shooter "Destiny," which has seen a $500 million investment from the company.

Gamers are responding well to the beta version of "Destiny" and pre-order numbers are encouraging, Kotick said without providing details.

"The audience reaction on 'Destiny' has been extraordinary." (Reporting by Malathi Nayak; Editing by David Gregorio, Steve Orlofsky and David Gregorio)

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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