Activision Blizzard recently posted results for its fiscal third quarter ending December 31st, and in spite of the industry crushing sales performance of the publisher’s Call of Duty: Modern Warfare 2, quarterly net loss widened from $72 million the year previous to $286 million.
Partly to blame for this performance, says Activision Blizzard, was a softer casual and music game market, but the company still claims that it beat prior expectations.
Revenue for the quarter reached $1.56 billion, which represents a 5% decline as compared to the same period during 2008, while for the calendar year of 2009, revenue hit $4.28 billion.
Activision Blizzard CEO Bobby Kotick enthused in a statement:
“We delivered better-than-expected calendar year non-GAAP financial results (Note: not the figures quoted above, which are on a GAAP basis) and our fourth quarter non-GAAP net revenues and non-GAAP earnings per share were the highest in company’s history.
“On a non-GAAP basis, our performance enabled us to deliver the most profitable year in our company’s history and record operating margin. We generated approximately $1.2 billion in operating cash flow and ended the year with approximately $3.3 billion in cash and investments.”
Looking ahead, Activision Blizzard expects Blizzard’s lineup of products, StarCraft II and World of WarCraft: Cataclysm, to be major revenue drivers, while a reorganisation of the company’s music division will result in better long-term sales performance of products from this division,
The publisher also plans to focus on a strategy of fewer SKUs (Stock Keepers Units) for its music games to service a broader audience, and will release fewer than 10 games in this genre this year, branching off of Guitar Hero and DJ Hero, all of which will release during the tail end of 2010.
Additionally, a new Band Hero for 2010 will not materialise, and further PlayStation 2 versions of Guitar Hero will not be made due to the diminishing returns Activision has been experiencing as the company continues to support the aging platform.
A new version of Tony Hawk: Ride is also on the cards, despite only selling 114 000 units across three platforms during its first month on sale, and extremely poor reviews across the board.
This new iteration is expected to release this year, and Activision’s Mike Griffith explained that “a long hardware development process” did leave much time “to develop the software,” but he still believes that “the premise of standing on a skateboard” and performing skateboard tricks realistically on a ‘real’ board “is very compelling.”
“This year, with the hardware complete, we’ll be focused on improving the software to unlock the full potential of the board,” said Griffith.
The next entry into the Call of Duty franchise was also touched upon, which is set to release later this year, as Mike Griffith once again stepped up to speak about what kind of success the publisher expects the seventh franchise entry to enjoy, which is to say, not as great as Modern Warfare 2:
“We’ve consistently grown the Call Of Duty franchise revenues year-on-year for the past seven years. We expect to continue our strategy of annualising this franchise opportunity.
“At the same time, we recognise that Modern Warfare 2 was an unprecedented success, driven in part by the game quality, our retail and marketing execution, and by the relatively friendly competitive environment [at Christmas].
“We expect to have a more difficult competitive environment this year, and therefore we’ve not planned on the same level of success [with 2010’s CoD title] as we enjoyed in 2009.
“That said, we’re still bullish on this year’s title, and we do see upside potential if we execute well by engaging the much larger set of consumers who were introduced to the Call Of Duty franchise in 2009.”
When asked about where the publisher will take the Call of Duty franchise next, CEO Bobby Kotick stepped up again and dubiously hinted at a possible subscription model for future entries:
“If you think about the success that we’ve had in other product categories on subscription, you can get a sense of the direction that we want to take that franchise,” said Kotick.
One last snippet is that the long-awaited beta test for Blizzard’s long-awaited StarCraft II will begin “later this month,” as confirmed by Blizzard’s Mike Morhaime during Activision Blizzard’s investor conference call.