Analyst: Strong Call of Duty 4 Performance To Lift Activision Holiday

With Call of Duty 4 tracking well ahead of expectations and, in many cases, selling out at retail, Stern Agee & Leach analyst Arvind Bhatia has said the game is well poised to drive Activision sales through the holiday season. "This title was already expected to do well but our channel checks indicate this title may be tracking even ahead of the high expectations," said Bhatia in a note to investors. "Our checks indicate the game has been selling extremely well on all consoles and was sold out in the vast majority of stores we checked," he added. "At most, a few copies were available at approximately 10% of the stores. Retailers also indicated they expected to continue to sell out of the title in the near term as new shipments arrive." Bhatia also added that thus far its review average is also tracking well ahead of the previous volumes in the Call of Duty series. "We heard nothing but positive comments relating to the graphics, mechanics, and overall quality of play for this title during our retail checks," he said. Bhatia concluded, "We feel the quality of the game will continue to drive sales through the holiday season and there is potential for upside to our 3Q08 EPS estimate of $0.58." The predictions follow Activision's recently reported record second quarter of $317.7 million in sales, with executives predicting at the time that the company could see third quarter net revenues to exceed $1 billion on the success of both Guitar Hero III and Call of Duty 4: Modern Warfare.