Activision Blizzard's Big Brands Deliver

Activision Blizzard has proven that even if the video game industry as a whole is declining, consumers will still spend on big video game brands.


The video game maker's big brands—"Call of Duty," "StarCraft," and "World of Warcraft"—helped Activision Blizzard triple earnings-per-share from a year ago to 12 cents, a beat by three cents.

The company's non-GAAP revenue also beat expectations against last year, growing to $845 million. These numbers are particularly striking considering that video game software and equipment dropped 8 percent in September, according to NPD Group.

And as CEO Bobby Kotick predicted that next week's launch of "Call of Duty: Black Ops" will be the biggest video game launch of the year, the company raised its full-year outlook. Kotick says the company is on pace for the most profitable year in company history with its highest-ever operating margins.

In his comments on the conference call, Kotick stressed that Activision Blizzard is well positioned to cash in on the social gaming trend, with the "largest reservoir of online gaming expertise."

He's not talking about the likes of Zynga's Farmville, but World of Warcraft. This game is the company's annuity—its 12 million subscribers pay $15 per month. Kotick says the company is taking what they've learned from this massive multiplayer online game, which is part of the 'Blizzard' acquisition, and applying it across 'Activision' games.

What about the lawsuit over the California law seeking to ban ultra-violent video games from being sold to minors? The Supreme Court just heard arguments this week—upholding the law could deal a real blow to Activision. Kotick has said he believes that games are protected by the First Amendment.

I'll ask Kotick about his plans for social games, his take on the Supreme Court suit and his perspective on the American consumer when I interview him this Friday on 'The Call.' Tune in!

Questions? Comments?