Activision-Blizzard Profits $381m in Q1 2010
by Jacob Mazel, posted on 06 May 2010 / 4,430 Views
Activision-Blizzard Q1 2010 Overview
For the three months ending March 2010, Activision-Blizzard had revenues of $1.308 billion up from $981 million in the previous March quarter. Net income (profit) reached $381 million for the March 2010 quarter - up from $189 million in the previous March quarter.
Robert Kotick, CEO of Activision Blizzard, stated, "Our better-than-expected first quarter performance was driven by strong global consumer demand for Activision's Call of Duty(R) and Blizzard Entertainment's World of Warcraft(R). Activision's Call of Duty: Modern Warfare(R) 2 was the #1 title overall in the U.S. and Europe for the quarter, which illustrates the continued momentum of our catalogue. Additionally, during the quarter, Activision launched DreamWorks' How To Train Your Dragon and the Call of Duty: Modern Warfare 2 Stimulus Package, which shattered Xbox LIVE(R) records with more than one million packages downloaded in the first 24 hours."
Kotick continued, "Throughout the remainder of the year, we plan to release our strongest video game lineup ever based on some of the industry's highest quality, profitable franchises. We expect to deliver record calendar year non-GAAP net earnings and expanded non-GAAP operating margins. In addition, we continue to strengthen our franchise portfolio and development resources for the future. Our high-quality brands, industry leading operational capabilities and solid balance sheet should enable us to take full advantage of the opportunities afforded by the expanding interactive entertainment market and allow us to deliver continued superior returns to our shareholders.
"As of March 31, 2010, we have delivered compound shareholder returns of 28% compared to the S & P average of -2 % over a ten-year period. We continue to find ways to add profitable franchises that allow us to increase our operating margins. In this regard we recently announced a ten-year alliance with Bungie, one of the premier studios in our industry. This relationship will allow Activision to broaden its product portfolio with exciting new games and underscores our commitment to partnering with the best creative talent in the industry," Kotick added.
More specifically, the company noted the following highlights for the quarter.
1) For the quarter ended March 31, 2010, according to The NPD Group, Charttrack and Gfk, in the U.S. and Europe, Activision's Call of Duty was the #1 third-party franchise, and Call of Duty: Modern Warfare 2 became the #1 best-selling third-party video game of all time.
2) Additionally, in the U.S., Activision Blizzard was the #1 third-party publisher for the Nintendo Wii and Nintendo DS , according to The NPD Group.
3) Band Hero and Cabela's Big Game Hunter were amongst the top ten selling Wii games of early 2010 in the USA. Modern Warfare 2 & World of Warcraft were top ten PC titles for the quarter in the USA according to NPD.
Corporate Outlook
For the April - June 2010 quarter, Activision-Blizzard expects Shrek, Transformers, Singularity, and Blur to perform well.
For calendar year 2010, Activision Blizzard still expects GAAP net revenues of $4.2 billion and non-GAAP net revenues of $4.4 billion, which were provided on February 10, 2010.
The company is increasing its calendar year GAAP earnings per diluted share outlook to $0.49, as compared with its prior GAAP earnings per diluted share outlook of $0.47, which was provided on February 10, 2010. On a non-GAAP basis, the company now expects earnings per diluted share of $0.72, as compared to its prior non-GAAP earnings per diluted share outlook of $0.70, provided on February 10, 2010.
For the second quarter 2010, Activision Blizzard expects GAAP net revenues of $925 million, and GAAP earnings per diluted share of $0.11. On a non-GAAP basis, the company expects net revenues of $700 million and $0.04 earnings per diluted share for the second quarter.
Revenue Splits
Activision-Blizzard revenues for the March 2010 quarter were split as follows.
For the quarter Activision-Blizzard earned the most revenue on MMORPGs, followed by X360, PS3, Wii, PC & Other, DS, PS2 and PSP. The PS3 and X360 figures are up by over $350 million combined from last year - primarily because of Modern Warfare 2. DS and Wii figures also increased slightly from the previous March quarter. PSP, PS2, Distribution and MMORPG revenues dropped off though.
Update:
Activision-Blizzard has posted its powerpoint slideshow of results and expectations. The company still expects sellthrough of 12m Wiis, 9m PS3s, and 8m X360s in the USA and Europe in 2010. Handhelds are expected to hit 18m in 2010 in the USA & Europe. These figures are the same as those in the Activision-Blizzard's Q4 2009 report.
The company continues to expect Wii, PS3, and X360 software to rise slightly in 2010 in the USA & Europe, while DS, PSP and PS2 drop-off by double digit percentages. PC and Digital Sales are still forecast to rise as well.
Blizzard is forecast to have an excellent year still, as expected. The company also expects increased profitability from music games.
Lastly, Activision says "Infinity Ward remains an important studio", so it will be fascinating to see what happens in the medium and long term to the relationship between the publisher and developer.
Contact Vgchartz at jmazel@vgchartz.com
