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ActiBlizz reports better-than-expected financial results for Q3 2010


Activision Blizzard has released its financial report for the third quarter of 2010, and announces the results were better-than-expected with net revenues of $745 million,  compared to the  same quarter last year when it  reported $703 million - beating its outlook of $600 million.

Profits hit $51 million, compared to $15 million for the same quarter last year. For the quarter ended September 30, product sales came in at $397 million, with subscription, licensing and other revenues coming in at $348 million, which is a 15 percent growth for digital over the prior year.

"For the third quarter, we exceeded our net revenues and earnings per share outlook and delivered strong year-over-year growth," said CEO Bobby Kotick.  "Our better-than-expected results are due to our leadership in online entertainment, including strong performance from Activision Publishing's Call of Duty franchise, and Blizzard Entertainment's World of Warcraft and StarCraft  II: Wings of Liberty . For the nine months ending September 30, 2010, our digital offerings contributed close to half of our total non-GAAP net revenues and our digital revenues have increased more than 15 percent over the prior year.

"Most importantly, we continue to deliver some of the world's best games.

"Activision Publishing is about to introduce what is likely to be the biggest entertainment launch of the year with Call of Duty: Black Ops, followed by Blizzard Entertainment's World of Warcraft: Cataclysm, which we believe will deliver an incredible breadth of new content to the world's largest massively multiplayer online role playing game community. As a result of our over-performance, we are raising our calendar year 2010 net revenue and earnings outlook. We expect to deliver the most profitable year in our history with record operating margins."

Eric Hirshberg, CEO of Activision's publishing arm, called to attention the 242 million consoles present in US homes and Activision has seen a major increase in PS3 and Xbox 360 game by 39 percent over the prior year.

Hirshberg also attributed the stellar sales for the quarter to Spider-Man: Shattered Dimensions and Warriors of Rock, which "helped pad the quarter and we expect them to sell more through the holidays". He also said that nine out of ten of the top games sold during the holiday season are "based on established franchises", and Activision's holiday releases are based on this principal: DJ Hero 2, Toby Hawk: Shred, and Call of Duty: Black Ops - stating  the latter  is "likely to be the biggest entertainment launch of all time.".

Activision mentioned opportunities for long-term growth with the Call of Duty franchise, and expect more growth in 2011 due to sales of Black Ops and the expected extra digital content, leading up to the back-half of 2011's release of a new FPS Call of Duty title.

"We are excited about the franchise," said Hirshberg, "and we plan to expand the franchise in Asia and more plans on this will be explained soon."

The call to investors is currently ongoing. We'll be sure to update you with information as it happens.

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