Activision raises 2020 forecast as 'Call of Duty' gets lockdown boost
Millions of people stuck indoors turned to video games such as Activision Blizzard Inc's "Call of Duty" to shake off lockdown boredom in the past two months, encouraging the company to raise its revenue forecast for the year.
Shares of the company rose about 5% in extended trading on Tuesday as Activision also said it was on track to deliver the next premium release in the "Call of Duty" franchise.
Videogame sales in the United States surged in the last two months as the virus shut down the country, with sales in March hitting their highest in over a decade.
"Call of Duty: Modern Warfare" is the best-selling game of this year so far according to data from research firm NPD. The company also released a free-to-play battle-royale extension "Call of Duty: Warzone" in March, which it said had already recorded over 60 million players to date.
Activision has been pushing to increase user engagement on its big-budget titles by offering free content like new multi-player maps, hoping to boost in-game spending.
In some markets like India, Latin America and Eastern Europe - where consoles are expensive for most - the mobile version of "Call of Duty" is growing rapidly, Bobby Kotick, chief executive officer, told Reuters.
The company's mobile game unit - "Candy Crush" maker King - recorded 273 million monthly average users in the quarter, up from 249 million in the fourth quarter.
Activision raised its 2020 adjusted revenue forecast to $6.9 billion from $6.73 billion, marginally above analysts' estimate of $6.86 billion, according to IBES data from Refinitiv.
It also forecast full-year adjusted earnings of $2.62 per share, beating the average estimate of $2.48.
Activision, like other gaming companies such as Electronic Arts, has a history of guiding conservatively and upgrading steadily as the year wears on, and most analysts expect them to stick with that approach.
The company, behind popular franchises such as "Diablo" and "World of Warcraft", reported total adjusted revenue of $1.52 billion for the first quarter ended March 31. Analysts, on average, had expected revenue of $1.32 billion.
The company's quarterly net income rose to $505 million, or 65 cents per share, from $447 million, or 58 cents per share, a year earlier.
Excluding items, the company earned 76 cents per share. Analysts had expected 38 cents per share.Reuters