Activision Blizzard’s ‘Destiny 2’ drives full-year forecast raise

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(Reuters) – Videogame publisher Activision Blizzard Inc on Thursday reported better-than-expected quarterly revenue and profit and raised its full-year forecasts, driven by the popularity of its sci-fi first person shooter game “Destiny 2”.

The company raised its full-year adjusted profit forecast to $2.16 per share from $2 per share and its adjusted revenue forecast to $6.85 billion from $6.58 billion.

Activision Blizzard, which is behind the popular “Call of Duty” franchise said total adjusted revenue rose to $1.90 billion from $1.63 billion in the third quarter ended Sept. 30.

The console version of “Destiny”, which was released on Sept. 6, was recognized as the best-selling console game of 2017 in the United States to date, with less than one month of sales, according to research firm NPD Group.

However, the company forecast adjusted revenue of $2.34 billion and profit of 82 cents per share for the all-important holiday quarter. The forecast was below analysts’ average estimates of $2.43 billion and 89 cents, according to Thomson Reuters I/B/E/S.

Rival Electronic Arts Inc also forecast revenue for the holiday quarter below estimates.

Activision Blizzard, which released the PC version of its smash hit “Destiny 2”, on Oct. 24, is also slated to launch “Call of Duty: WWII” during the holiday season.

These titles are set to compete with EA’s “Star Wars Battlefront II” and “Need for Speed” for gamer dollars during the quarter.

Activision shares, which fell 3.7 percent after the earnings report, reversed course to trade up nearly 2 percent in after-hours trading.

“The market took a bit of time to understand what’s going on. Given that this year’s ”Call of Duty“ should be stronger than last year’s and given the launch of ”Destiny 2“ on PC last week, odds are that revenues will be up year-over-year and earnings will be higher than last year,” Wedbush Securities analyst Michael Pachter said.

The pre-order momentum has been strong for the latest “Call Of Duty” franchise, with more pre-orders on the digital offering than prior titles, Activision said.

Total adjusted revenue rose to $1.90 billion in the quarter ended Sept. 30, from $1.63 billion a year earlier, beating analysts’ estimate of $1.74 billion.

Excluding items, it earned 60 cents per share, blowing past expectations of 49 cents.

The company’s net income fell to $188 million, or 25 cents per share in the quarter, from $199 million or 26 cents per share, a year earlier.