Activision Q3 Profits up on Guitar Hero, Call of Duty

Activision Blizzard announced a profit for the third quarter, thanks to two important events: a reduction in costs and strong sales of titles like Guitar Hero 5. Shares rose 2 percent in afternoon trading on the news. The company also predicted lower fourth quarter numbers than what Wall Street expected, despite the pending release of Call of Duty: Modern Warfare 2, which ships next Tuesday.

For the third quarter, Activision reported a net income of $15 million - 1 cent per share - compared with a net loss of $108 million - 8 cents a share, for the same period a year ago. Net revenue dipped 1 percent in Q3 to $703 million. Excluding revenue that was deferred from the sale of certain titles, the company said revenue for the period would have been right around $755 million.

In the quarter Activision Blizzard increased its U.S. and European share 1.2 points over the previous year across all platforms to 12.3 percent and had two of the top-10 best-selling titles in the U.S.: Guitar Hero 5 and Guitar Hero World Tour, according to retail sales data from NPD Group (U.S.) and Charttrack and Gfk (Europe).

The top selling games for the quarter were Guitar Hero 5, Marvel: Ultimate Alliance 2, and older versions of Guitar Hero, Call of Duty and - of course - World of Warcraft.

For the fourth quarter, Activision is predicting earnings of 43 cents a share on revenue of $2.22 billion, on a non-GAAP basis. Analysts were expecting earnings of 44 cents a share on revenue of $2.3 billion. The fourth quarter will include the release of Modern Warfare 2, Tony Hawk: Ride, DJ Hero and Band Hero.

Ed Fries advice lead to Guitar Hero

G4TV.com caught up with former Microsoft vice president Ed Fries shortly before his session at The Ayzenberg Group’s [A] List Summit. During that chat Fries shared an interesting story about how he was indirectly responsible for Guitar Hero. Apparently Harmonix CEO Alex Rigopulos pitched Microsoft on the game that would become Frequency but Fries turned it down and offered some extremely valuable advice:

“I ran into Alex Rigopulos a few years ago and he was joking with me about when we passed on his title FreQ, which was before Guitar Hero and Rock Band. He said, ‘I don’t know if you remember, but you met with me and turned us down. You said that nobody would ever buy a music-rhythm game that doesn’t have a custom piece of hardware attached to it. So I took your word and did this Guitar Hero thing and it worked out great!’ [laughs] I said, ‘Well thanks for that. Thanks for giving me some amount of credit for that. I wish we had actually signed you and done it.’ [laughs] Obviously, those games were enormous for the business.”

Read the rest of the account at G4TV.com

Guitar Hero 5 changes the game

Big changes are coming to the next iteration of Activsion’s rock and roll music game series. The big change coming to Guitar Hero 5 will - for the first time - let players decide what combination of instruments to use in-game. Want to play with two guitars and two drums, or three guitars and a microphone? Well now you can, according to Activision.

Activision also promises easy-to-use gameplay modes like Party Play and RockFest that let players tailor the experience to match personal style and interests. Party Play lets players can jump in or drop out of gameplay seamlessly, while RockFest, lets them go head-to-head in five new modes playable online or in your living room and the ability to play the entire set-list from the first time the game is turned on.

Naturally downloadable content from Guitar Hero World Tour will be compatible with the game and will automatically be updated to include all of the upgrades and enhancements of Guitar Hero 5. Guitar Hero 5 will also offer a varied set list with master tracks from 85 bands including Kings of Leon, The Rolling Stones, The White Stripes, Santana, Vampire Weekend, Tom Petty, Johnny Cash, Bob Dylan, plus more than 25 artists from a variety of music genres that will be making their music video game debut.

Guitar Hero 5 is set for release this fall. The Xbox 360 and PS3 versions of the game are being developed by Neversoft, the Wii version is being developed by Vicarious Visions and Budcat is developing Guitar Hero 5 for the PlayStation 2.

Activision Predicts Impressive Q1 Results

Activision this morning announced that it will do better in the first quarter than it had previously forecasted - thanks mostly to strong performances by Call of Duty: World at War, World of Warcraft and Guitar Hero titles. Activision had forecasted first quarter revenues of $860 million and earnings of 8 cents a share.

The company says that it is “tracking ahead” of its prior outlook. Excluding the usual charges, Activision predicts revenues of $550 million and 3 cents a share. Analysts had revenue pegged at $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. “We exceeded our quarterly financial goals as the video game market continues to grow and our franchises continue to perform.”

Kotick also had a positive outlook on upcoming games doing well later in the year. Those games include Transformers, X-Men Origins: Wolverine, Ice Age: Dawn of the Dinosaurs and Guitar Hero Smash Hits.

Call it Guitar Hero Smash Hits

Activision passed along box art, revealing a name change for its upcoming Guitar Hero product. Formerly Guitar Hero Greatest Hits, the new title for the game is apparently Guitar Hero Smash Hits. What’s the discernable difference in terms of content? None that we know of.

Guitar Hero Smash Hits promises 48 master tracks from Guitar Hero, Guitar Hero II, Guitar Hero Encore: Rocks the 80s and Guitar Hero III: Legends of Rock. Guitar Hero Smash Hits includes some of the most famous Guitar Hero songs playable with guitar or for the first time as a full band.

Check out the new box art on the left.

RedOctane’s New Boss

Activision Publishing announced this morning that Dan Rosensweig has been named President and Chief Executive Officer of RedOctane, the division behind the company’s popular Guitar Hero franchise and the upcoming DJ Hero. Rosensweig will oversee Guitar Hero’s global operations including game development, hardware manufacturing, supply chain, logistics and marketing and will report directly to Mike Griffith, President and CEO of Activision Publishing.

Kai Huang, former President and CEO of RedOctane, who along with his brother Charles Huang created Guitar Hero, will continue working at RedOctane reporting to Rosensweig. I wonder what’s up with that..

Prior to joining the company, Rosensweig was Chief Operating Officer of Yahoo! (2002 - 2006) where he oversaw the company’s worldwide operations. Prior to that he worked at Ziff Davis 18 years as president of the online and print magazine publisher.

Titmouse Animation Gets Into the Game

The minds behind Titmouse Inc., the animation studio responsible for cartoons such as Metalocalypse, Avatar: The Last Airbender, and Afro Samurai, announced this week that they are expanding their horizons and entering the video game industry with the creation of their own original game development studio, Titmouse Games. While the creation of a game development studio is new for Titmouse, the studio is no stranger to the world of gaming, having worked on the cinematics for the last four Guitar Hero games and just wrapping up work on the upcoming Guitar Hero: Metallica.

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