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 Videogame publishers are shifting to the lucrative digital business
from physical sales of games as consumers shift from consoles to
playing on smartphones and tablets.
Revenue from Activision Blizzard's digital business rose 53.3
percent in the first quarter ended March 31 from a year earlier,
helped by robust online sales of "Destiny" and its "Call of Duty"
franchise.
Last month, the company launched "Hearthstone: Heroes of Warcraft"
on iOS and Android mobile phones.
Rival Electronic Arts Inc has already made smartphone versions of
its top-selling games "Madden NFL" and "FIFA". EA reported
better-than-expected results on Tuesday, helped by strong digital
sales and the release of "Battlefield Hardline".
In May 2006, Activision Blizzard bought RedOctane Inc, the videogame
publisher behind the popular Guitar Hero franchise, which has been
played by more than 40 million gamers.
Activision Blizzard had said earlier that it planned to launch the
next generation of Guitar Hero this fall and that the game would be
available across consoles, smartphones and tablet devices.
"It's a good story," Wedbush Securities analyst Michael Pachter
said, adding that Guitar Hero would "add a lot" to the company's
slate.
Activision Blizzard, also known for its "World of Warcraft", "Skylanders"
and "Diablo" franchises, raised its full-year adjusted profit
forecast to $1.20 per share from $1.15 earlier.
Analysts were expecting a profit of $1.18 per share, according to
Thomson Reuters I/B/E/S.
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The company also raised its full-year adjusted revenue forecast to
$4.43 billion from $4.40 billion earlier.
Activision Blizzard reported adjusted revenue of $703 million in the
first quarter, beating the average analyst estimate of $655.4
million.
The company's net income rose to $394 million, or 53 cents per
share, in the first quarter, from $293 million, or 40 cents per
share, a year earlier.
On an adjusted basis, it earned 16 cents per share, well above the
average estimate of 7 cents.
Up to Wednesday's close, Activision Blizzard's shares had risen
about 15 percent this year. The stock was little changed in
after-market trading.
(Reporting by Subrat Patnaik and Anya George Tharakan in Bengaluru;
Editing by Simon Jennings)
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