* CEO pins high hopes on "Call of Duty" vs "Halo"
* "World of Warcraft" gets a boost from expansion pack
* Shares rise after 2012 outlook raised
By Malathi Nayak
SAN FRANCISCO, Nov 7 Activision Blizzard Inc
raised its 2012 outlook on Wednesday on expectations of
strong holiday sales of its latest title in the "Call of Duty"
franchise, despite competition from Microsoft Corp's
blockbuster "Halo 4."
Investors are keeping a close eye on action-shooter "Call of
Duty: Black Ops II," a game that hits stores next week and
advances a franchise that has broken sales records and driven
Activision's fourth-quarter performance in past years.
But this year, it will have to contend with Microsoft Corp's
just-launched sci-fi game, "Halo 4," for holiday-season
"They continue to outperform the industry," R.W Baird
analyst Colin Sebastian said. "Another beat and raise for Q4, so
management obviously feels confident with the holiday line-up
with "Skylanders" and "Call of Duty."
The world's largest video game publisher now expects
earnings per share of $1.10 in 2012, compared with 99 cents
previously. It raised its revenue estimate to $4.8 billion from
$4.63 billion. This beat Wall Street's view of $1.01 earnings
per share and revenue of $4.68 billion.
The company's stock rose 3 percent to $11.45 in after hours
trading from a close of $11.13 on Nasdaq.
"Microsoft did a very good job with Halo and fortunately
it's only on a single platform," the Xbox, Chief Executive Bobby
Kotick said in an interview.
"We raised outlook for the year as we're confident "Call Of
Duty: Black Ops II" will likely be the most successful video
game of the year," Kotick said.
Executives told analysts on an earnings call that "Black Ops
II" pre-orders are tracking ahead of the game's previous
installment, "Modern Warfare 3," but did not offer specifics.
The company reported higher earnings in the third quarter
that also beat Wall Street's expectations.
Net income was up 53 percent at $226 million, or 20 cents
per share, from $148 million, or 13 cents per share, in the
year-ago period. On a non-GAAP basis, it earned 11 cents a
share, beating the average forecast for 8 cents.
Revenue rose 12 percent to $841 million from $754 million a
year ago. Adjusted for the deferral of digital revenue and other
items, revenue rose about 20 percent to $751 million from $627
million a year ago, surpassing Wall Street's average forecast
for $709.8 million, according to Thomson Reuters I/B/E/S.
WARCRAFT BOUNCES BACK
Fantasy-action game "Diablo III" continues to sell well
since its launch in May, executives said. Its "World of
Warcraft" franchise also enjoyed a boost in sales after the
September release of its latest "Mists of Pandaria" expansion
Investors closely watch subscriber numbers for "World of
Warcraft," Activision's most profitable business and the source
of a steady stream of subscription-based revenue.
Subscribers to the seven-year-old game have dwindled in
recent quarters as users switched to free offerings. Subscribers
dropped to 9.1 million in the second quarter from 10.2 million
in the first.
But this quarter, users were back up to 10 million after
"Pandaria" sold 2.7 million units in its first week, luring
Activision, better known for hard core shooter games, is
also diversifying its revenue stream and stemming subscriber
losses from its bread-and-butter games, for instance with the
It is also expanding internationally and investing in a
variety of mobile games for Apple Inc's iPhone and other
In a bid to expand its presence in Asia, the company
released the "Mists of Pandaria" expansion pack in China in
And the company announced in July that it plans to take
"Call of Duty" to China as a free-to-play online game.
Activision has partnered with Tencent Holdings Ltd an
Internet and wireless services provider that will have an
exclusive license to operate the shooter game in China.