May 4, 2017 / 8:12 PM / 2 years ago

Activision's 'Overwatch' fuels revenue beat; forecasts raised

(Reuters) - Activision Blizzard Inc raised its full-year adjusted profit and revenue forecasts, and reported quarterly revenue above estimates, as the videogame publisher benefited from the popularity of its “Overwatch” game.

Visitors look at a presentation at the ActiVision Blizzard exhibition stand during the Gamescom 2013 fair in Cologne August 21, 2013. REUTERS/Ina Fassbender

The company on Thursday nudged up its full-year adjusted profit to $1.88 per share from $1.85 and its adjusted revenue forecast to $6.33 billion from $6.30 billion.

Activision’s total adjusted revenue rose 31.7 percent to $1.20 billion in the first quarter ended March 31, from $908 million a year earlier.

Analysts on average had expected revenue of $1.09 billion, according to Thomson Reuters I/B/E/S.

“Among the drivers of our results was ‘Overwatch’, which now has over 30 million players globally,” Chief Executive Bobby Kotick said in a statement.

Activision, best known for its “Call of Duty” and “World of Warcraft” games, released the multi-player futuristic game “Overwatch” on May 24 last year to rave reviews.

Revenue from the company’s high-margin digital business rose 50 percent.

Activision, like rivals Electronic Arts and Take Two Interactive, has benefited in recent years as players increasingly prefer downloading games to buying physical discs.

Activision’s net income rose to $426 million, or 56 cents per share, from $363 million, or 48 cents per share in the latest quarter.

Under Kotick, Activision is looking to transform into a media entertainment giant. The company has set up a film studio, e-sports and consumer products divisions. The consumer products unit is headed by former Walt Disney executive, Tim Kilpin.

Activision bought “Candy Crush” maker King Digital for nearly $6 billion last year, looking for a bigger foothold in the highly-addictive mobile gaming space.

The company is continuing to make progress with the testing and development of its ads platform at King, Kotick said on a post-earnings conference call.

Last week, Activision released a trailer of its latest “Call of Duty”, set in World War II, as the company looks to rebound from disappointing sales of last year’s installment, “Call Of Duty: Infinite Warfare”.

Though early, initial pre-orders for “Call of Duty: WWII” are off to a very strong start, the company said.

Activision had 48 million monthly active users in the first quarter, down from a year earlier, largely due to expected softness from the “Infinite Warfare” release.

The company forecast current-quarter adjusted revenue of $1.20 billion, largely in line with analysts’ average estimate of $1.19 billion.

Videogame companies are required to defer some revenue from certain online-enabled games following a tweak to the U.S. accounting rules.

The company’s shares, already up about 47 percent this year, were down slightly in after-market trading on Thursday.

Reporting by Anya George Tharakan in Bengaluru; Editing by Sriraj Kalluvila

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