Activision Blizzard warns of rocky 2nd half, shares down

SAN FRANCISCO - Video games maker Activision Blizzard Inc warned investors on Wednesday that it expects a challenging second-half and holiday quarter driven by heavy competition and uncertainty around the launch of new video game consoles.

Activision shares were down 6.3 per cent at US$14.30 (S$17.55) in after-hours trading after closing at US$15.26 on the Nasdaq.

The company, known for its "Call of Duty" and "Skylanders"games, slightly raised its 2013 revenue and earnings forecast to US$4.25 billion and 82 cents per share, compared with US$4.18 billion and 80 cents provided at the end of the last quarter ended Jan. 30.

Its 2013 outlook was below the view of Wall Street analysts, who expected the company to forecast revenue of US$4.27 billion and earnings at 85 cents per share.

Subscribers of "World of Warcraft," Activision's most profitable business and the source of a steady stream of subscription-based revenue, dropped sharply to 8.3 million last quarter from 9.6 million in the previous quarter, the company said.

The video game industry is struggling with flagging sales as players migrate from to buying packaged games for consoles to free or less-expensive offerings on mobile devices.

Moreover, consumers have held back from buying hardware and software as they await new versions of Sony Corp's PlayStation and Microsoft Corp's Xbox, which are expected later this year.

Nintendo Co Ltd's new Wii U console, which was launched in November, has disappointed investors with its lackluster sales, casting doubt on the industry's hope that new consoles could boost prospects.

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