Profit Sinks at Activision

Updated from 4:35 p.m. EST

The cyclical nature of the video-game market is finally catching up with Activision (ATVI Quote).

In its earnings report Monday, executives at the video-game software publisher predicted essentially flat sales this fiscal year and an outright sales decline in the coming one. Should those forecasts come to pass, they would mark a big change for a company that has prided itself on consistently growing its top line year to year for some 13 years.

That time period encompassed two different console transitions -- the periodic replacement of video-game hardware and software with updated versions. Industrywide, such transitions have typically led to slumping sales and increased costs. ...