Activision profits up 75 percent

Activision profits up 75 percent
Seth Tipps

By Seth Tipps

August 2nd 2013 at 8:13AM

First quarterly report since independence shows company is cautious about the future

Activison Blizzard has released its first quarterly earnings report since going independent from Vivendi last week.

There's very little new about the report aside from a sharp rise in profits, as the company claims results beat expectations while simultaneously warning of increased competition.

Revenues were down by one percent to $1.05 billion, but profits were up 75 percent to $324 million.

Call of Duty: Black Ops II, Skylanders Giants, and World of Warcraft were the big earners, but the strong implication was that competition from Battlefield 4 and Disney Infinity could threaten the company's hold on the top two game franchise slots in North America and Europe.

As reported last week, World of Warcraft continues to lose subscribers and Blizzard is rethinking its approach to upcoming MMO Titan, and the new game is “unlikely” to be subscription based.

Despite these concerns, Skylanders continues to push sales milestone as lifetime sales have passed$1.5 billion and revenues from the franchise are still growing from last year.

Digital sales are also growing and now account for 37 percent of the publisher's total revenues at $387 million dollars in revenue for the quarter.

It should be pointed out that none of the cost of repurchasing shares from its former parent Vivendi was taken into account for this quarter, which finished before the split, or the expected full year results of $4.3 billion.

Even so, Activision's forecast is down from last year's earnings, and if proved accurate will be the first time since the 2008 merger with Vivendi and Blizzard that annual revenues have declined.