Activision Will Beat First-Quarter Forecast

Strong retail sales prompt gaming giant Activision to raise its first-quarter outlook
Author:
Publish date:

Updated from 10:05 a.m. EDT

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

Activision

(ATVI) - Get Report

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

Call of Duty

and

Guitar Hero

titles.

Video game makers such as Activision,

Take-Two Interactive

(TTWO) - Get Report

and

Electronic Arts

(EA) - Get Report

have been

struggling

with

tighter consumer spending

as the

recession

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

worst

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

and

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

Transformers

,

X-Men Origins: Wolverine

and

Ice Age: Dawn of the Dinosaurs

and

Guitar Hero Smash Hits

.

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