Activision Says First-Quarter Profit Doubles on `Call of Duty,' `Warcraft'

Activision Blizzard Inc., the world’s largest video-game publisher, said first-quarter profit doubled on sales of “Call of Duty” and “World of Warcraft.”

Net income rose to $381 million, or 30 cents a share, from $189 million, or 14 cents, a year earlier, Santa Monica, California-based Activision said today in a statement. Excluding some items, profit of 9 cents beat the 4-cent average of 22 estimates compiled by Bloomberg.

Downloadable content for “Call of Duty,” along with subscriptions for the online role-play title “World of Warcraft,” helped Activision buck the 7 percent industry sales slide reported by NPD Group Inc. Activision’s first-quarter revenue gained 33 percent to $1.31 billion, led by “Call of Duty: Modern Warfare 2,’” the top game in the U.S. and Europe.

“We’re in a unique position compared to any other video game company because the majority of our profits are truly from digital revenues,” Chief Executive Officer Bobby Kotick said in an interview. Electronic Arts Inc., the second-largest game publisher, reports results on May 11.

Activision, controlled by Paris-based Vivendi SA, said on April 15 results would top prior forecasts. Excluding changes in deferred revenue, sales totaled $714 million. Full-year profit will be 72 cents a share, equal to analysts’ estimates.

‘Starcraft II’

The company, which is releasing “Starcraft II” and “Call of Duty: Black Ops” later this year, said it will have second- quarter profit of 4 cents a share, below the 9-cent average of 23 analysts’ estimates compiled by Bloomberg. Sales will total $700 million, excluding changes in deferred revenue.

Activision rose 18 cents to $10.67 in extended trading after the announcement. The stock fell 26 cents to $10.49 at 4 p.m. New York time in Nasdaq Stock Market trading and had declined 5.6 percent this year.

The results were Activision’s first since the company fired the top executives at its Infinity Ward studio, which made “Call of Duty: Modern Warfare 2.” Kotick said 35 employees have left following the departure of the two executives, Jason West and Vince Zampella.

Kotick fired the game designers for alleged insubordination in March, and the situation is now in the courts. West and Zampella are suing Activision for breach of contract, and Activision has filed a countersuit.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

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