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Activision Will Beat First-Quarter Forecast

Strong retail sales prompt gaming giant Activision to raise its first-quarter outlook

Updated from 10:05 a.m. EDT

The computing gaming sector got a shot in the arm Thursday when



forecast better-than-expected first-quarter results thanks to strong performance from its

Call of Duty


Guitar Hero


Video game makers such as Activision,

Take-Two Interactive



Electronic Arts


have been



tighter consumer spending

as the


has reached gamers' wallets. Even Activision, which has largely avoided the


of the

economic downturn

, reported a $72 million loss in its fourth-quarter results, underlining the challenges facing the industry.

The Santa Monica, Calif.-based firm had

initially forecast

first-quarter revenue of $860 million and earnings of 8 cents a share, but now says that it is "tracking ahead" of its prior outlook. Excluding charges, the company had expected revenue of $550 million and 3 cents a share. Analysts had estimated revenue of $569.32 million and 4 cents a share.

"Global consumer response to the

Call of Duty


Guitar Hero

franchises and Blizzard Entertainment's

World of Warcraft

remains strong despite the challenging economic environment," said Activision CEO Robert Kotick in a statement. "We exceeded our quarterly financial goals as the video game market continues to grow and our franchises continue to perform."

Kotick added that the upswing in demand bodes well for upcoming Activision titles such as



X-Men Origins: Wolverine


Ice Age: Dawn of the Dinosaurs


Guitar Hero Smash Hits


Investors responded positively to Activision's rosier outlook. The stock was recently up 1.9% to $10.22.