It's earnings season, and as such, a lot of companies are putting up their numbers for the quarter. Activision was one such company announcing their numbers today, and the news for them was surprisingly good. Sufficiently surprisingly, in fact, to beat Wall Street estimates.
Activision put up revenues of $841 million, which beat analyst estimates by fully $130 million dollars, and profits at $226 million. That represents a big gain over the same quarter last year, where they brought in $754 million that quarter. Digital sales stayed comparatively flat at $430 million, but retail sales saw a big jump to $357 million, or around 43 percent.
So what was it that drove Activision's hefty gains, gains sufficient to not only make Wall Street estimates look like practical jokes by comparison but also give Activision a big edge going into Christmas? The answer is major-league titles. The Call Of Duty
franchise is naturally huge for Activision, and the release of Diablo III
was a major shot of support. Moreover, the release of the Skylanders franchise, which not only represents a big-selling game but also the number one hot ticket item in the action figure line, also put a lot of punch in Activision's bottom line, with Skylanders Giants actually representing a 50 percent larger sales rate than Skylanders alone.
However, this high bar is a bit of a problem for Activision, who will now likely take some damage in stock when the next year-over-year comparisons come out--a big year this year means almost certain losses next year, unless a similar big year can be yielded, difficult by any measure--and there's more trouble in store. While there's a new Starcraft coming in early 2013--Starcraft II: Heart of the Swarm
--an expansion for Diablo III isn't likely any time soon. With new consoles likely to start making appearances in 2013, and a global economy that's still weak, it's going to make things rough for Activision over the next few months.
However, they've got plenty going for them: several major franchise titles, a big few months of gains, the upcoming holiday shopping season--Black Friday is now just over two weeks away--and that all adds up to some very big potential gains indeed for Activision, and the rest of the industry alike.