Kung Fu Panda, Guitar Hero Drive Record Activision Quarter

Following the release of its preliminary results, Activision has announced that its final pre-merger quarter saw record sales up 32 percent to $654 million and profits more than doubled to $59.0 million. Sales were up from $495.5 million a year prior, while profits were up from $27.8 million, primarily due to the launch of its Kung Fu Panda games based on the DreamWorks film, as well as its Guitar Hero line-up with Aerosmith and portable On Tour. The company notes that the Guitar Hero franchise as a whole was the #1 best-selling franchise in dollars for the first half of the calendar year, and On Tour was the #1 franchise in dollars for the DS, while Kung Fu Panda was the #2 title in dollar terms for the quarter. Looking forward, Activision says it expects the merged Activision Blizzard to bring in sales of $636 million in its forthcoming quarter, $620 without sales of the former Vivendi Games business. Said CEO Robert Kotick, "Activision's June quarter stand-alone results were the highest ever for a non-holiday quarter... Our record performance highlights the continued strength of our business. We are well positioned to continue to capitalize on our strong product portfolio and the positive trends in our industry." On its merger, Activision Publishing president and CEO Mike Griffith added, "We are very excited to add Vivendi Games' multi-million unit selling properties Crash Bandicoot, Ice Age and Spyro, as well as two new intellectual properties -- Prototype and an as yet unannounced title." [UPDATE: In its call with investors, company executives spent much of their time stressing the importance of franchise content as the core of Activision Blizzard's business, as recently laid out with regard to Vivendi's various ongoing projects and studios. Griffith again stated that, with regard to "all other Vivendi Games products and operations" - while they housed "very talented people" they would not play a "strategic role" in the future of Activision Blizzard's business. For the remainder of 2008, Activision Blizzard said it expected the following hardware unit increases: PlayStation 2 up 4-5 million, PlayStation 3 up 8 million, Xbox 360 up 6-7 million, the Wii up 15 million, and both the DS and PSP combined up more than 24 million. Blizzard's Mike Morhaime joined the call and, while staying far away from making more specific forecasts on future Blizzard products, did introduce the business to investors. In talking about the competitiveness of the business, Morhaime did admit that when Funcom's Age of Conan launched it saw some of its audience leave, but said that 40 percent so far have returned, and Blizzard expects more when its Lich King expansion launches later this year. Specifically on that expansion, while Blizzard stuck to its habit of refusing to give specific launch dates, Morhaime did say, in response to an analyst question, that the title would be out before the end of the year, but not during the July to September quarter.]