'Call of Duty' steers Activision sales in tough quarter for game makers
Feb 6 (Reuters) - Videogame publisher Activision Blizzard beat Wall Street estimates for fourth-quarter adjusted sales on Monday, thanks to the success of the latest game in its "Call of Duty" franchise.
A string of launches in October and November, including "Call of Duty: Modern Warfare II", "Warzone 2.0" and "World of Warcraft: Dragonflight" from the fantastical world of "Azeroth", helped the company hold the attention of the gaming community.
As inflation squeezes budgets of American households, more gamers are expected to stick to their favorite gaming franchises, instead of experimenting with newer titles from other studios, helping companies such as Activision, analysts have said.
"Modern Warfare II" delivered the highest opening-quarter sell-through in the franchise's history and crossed the $1 billion mark within 10 days of its late-October launch, the company said.
The company expects its full-year adjusted sales to grow at least in high-single digits, bolstered by the launch of games including "Diablo IV."
Adjusted sales in the quarter ended Dec. 31 came in at $3.57 billion, compared with analysts' average estimate of $3.16 billion, according to Refinitiv data.
Activision's upbeat results follow drab showings from rival Electronics Arts and Xbox maker Microsoft.
Activision's $69-billion takeover by Microsoft is being challenged by the U.S. Federal Trade Commission and being investigated by EU authorities. Activision said the companies are continuing to engage with regulators reviewing the transaction.
The end of Blizzard's long-term partnership with China's second-biggest gaming firm NetEase will rescind gamers' access to the "World of Warcraft" game in the country until an alternative partnership is formed.
That is expected to hit the U.S. company's net bookings by $250 million in fiscal 2023, Benchmark analyst Mike Hickey wrote in a note last month.
Fourth quarter net income fell to $403 million, or 51 cents per share, from $564 million, or 72 cents per share, a year earlier. (Reporting by Chavi Mehta in Bengaluru; Editing by Anil D'Silva)