Activision Reports Q3 Earnings Today, Signs of Health in Video Game Market?

Kris Erickson • Nov 3, 2010 • Comments ()

Video game publisher Activision Blizzard Inc. (ATVI) will report third quarter earnings later today. The company said in August that it expected earnings of 8 cents per share on revenue of $725 million, but analysts expect the publisher to post an even more robust 9 cents per share earnings on $750 million revenue today.

Activision's acquisition of Blizzard is expected to help push earnings higher for the last quarter, as the release of heavily anticipated PC title Starcraft II boosted sales, while ongoing subscription revenue for the massively multiplayer online game World of Warcraft continued to provide a stable cash flow. Watch for statements about future growth areas in the PC and console markets for Blizzard's core game franchises later today.

Console sales of Activision titles for last quarter may disappoint, as demand for music based games like Guitar Hero and the recently released DJ Hero 2 has slowed. The November 9th release of Call of Duty: Black Ops is expected to break sales records and be a major source of profit for the company this quarter. Last year's Modern Warfare 2 sold 4.2 million copies on release, making it the fastest single-day seller on record. Black Ops is expected to perform well at retail, although analyst Michael Pachter doesn't believe it will outsell last year's hit. However, orders for the Prestige and Hardened Editions of the game have surprised retailers, suggesting strong demand for the game at a premium price, despite current economic conditions in the United States.