Activision Blizzard loses $72m in Q4 '08; outlook misses '09 expectations

by Ben Gilbert { Feb 11th 2009 at 6:35PM }

Bobby Kotick and co. got together for the Activision Blizzard earnings report this afternoon and dropped a few numbers on their investors, aside from confirming a mess of games that still haven't officially been announced yet. After reconfirming what we told you a few weeks ago regarding the $1 billion in sales of Guitar Hero III, Kotick went on to note, "In North America, Activision Blizzard was the #1 third-party console and handheld software publisher in dollars for the calendar year, according to The NPD Group."

And how did the company fare during the holiday season? As you might expect, due to releases like Call of Duty: World at War, Guitar Hero: World Tour (which outsold Rock Band 2 at 2:1 in 2008) and a little expansion you may have heard of called Wrath of the Lich King, "Activision Blizzard was the #1 console, handheld and PC publisher in the U.S. and Europe, according to The NPD Group, Charttrack and Gfk." Unfortunately, during a recession like this, even being "the #1 console, handheld and PC publisher in the U.S. and Europe" wasn't enough, with the company losing $72 million in Q4, or 5 cents a share, and announcing a 2009 outlook that falls shy of Wall Street's expectations. Sometimes it's tough being the king.

Tags: activision, activision-blizzard, call-of-duty-world-at-war, earnings, guitar-hero, guitar-hero-3, guitar-hero-world-tour, James-Bond, pc, world-of-warcraft, wrath-of-the-lich-king

Reader Comments (Page 1 of 1)

Mr Khan @ Feb 11th 2009 6:40PM

It seems that the only ones who turned a profit in that quarter were Nintendo and Sony (oddly enough, and despite it's large annual overall loss)

Anyone else?

ice~ @ Feb 11th 2009 6:49PM

I 'm no expert but "the #1 console, handheld and PC publisher in the U.S. and Europe" isn't quite a catchy phrase...

Jerkamie @ Feb 11th 2009 6:57PM

Maybe this is the reason why cod4&5 are now $69.99 + tax in Canada. Too bad it's just going to drive more people away from their games.

top.slacker @ Feb 11th 2009 7:00PM

Sweet sweet justice?

Nathan @ Feb 11th 2009 7:03PM

The loss is due to "deferred revenue". Meaning they earned a lot more, but have deferred some revenue to the next accounting period. If they had not deferred the revenue they would have made $429 million profit.

http://investor.activision.com/releasedetail.cfm?ReleaseID=364788

Baby J Penn (PSN johnnynumber5) @ Feb 11th 2009 7:32PM

Thanks for putting that into perspective. Send it through the tip portal so they can update the article.

I guess they wanted to pad their next financial quarter in anticipation of losses.

Nytemare @ Feb 11th 2009 7:05PM

I'm sure they aren't hurting for money with that big cash cow(WoW).

Unless they refuse to spread the wealth between sections.

Sean Aaron @ Feb 11th 2009 7:10PM

Makes their announcement of a slew of minigames for the Wii in 2009-2010 a real questionable strategy...

why not the LS2LS7? @ Feb 11th 2009 7:13PM

Holy crap. If Activision/Blizzard can't make money, the industry is in deep s**t.

-.- @ Feb 11th 2009 9:48PM

*free-radical *cough*

Premature ejaculation man @ Feb 11th 2009 7:24PM

EXPLOIT FASTER!

Baby J Penn (PSN johnnynumber5) @ Feb 11th 2009 7:25PM

Didn't the 2:1 sales advantage only take into account Rock Band 2 bundles vs GH:WT bundles?

It would make more sense to compare the total number of Rock band 1 & 2 bundles vs the number of GH:WT bundles to me. Honestly, we still have our RB 1 bundle and just bought both games. We prefer the interface of RB to GH:WT if it means anything. We also got a chance to try the GH:WT instruments and the drums felt very cheap compared to Rock Band. The guitar was adequate but we still prefer the Rock band guitars because they don't have what we found to be the less accurate touch panel for solos. In fact, we bought another guitar and chose the standalone RB 2 guitar.

Mr Khan @ Feb 11th 2009 7:37PM

Still possible. Guitar Hero is heavily favored on Wii, mostly due to Harmonix's sloppy original and incredibly late second

linebeginstoblur @ Feb 11th 2009 7:34PM

I can not think of a single property that Activision Blizzard currently owns that I really like. When it comes to the huge third-party publishers, lately, I've much preferred Electronic Arts. They take what Activision didn't deserve and made it better. They took Harmonix to make Rock Band. They took Double Fine so that Brutal Legend can actually be released.

They took Valve's The Orange Box and released the PS3 version that they refused to put any effort into. They took a chance and released games like Mirror's Edge. They gave Criterion Games the freedom to make Burnout Paradise the best game this gen when it comes to DLC support without forcing them to charge.

Now, with games like Madden and Spore, I don't think EA is perfect and far superior to Activision Blizzard, but still, it seems like all Activizzard has to offer anymore is Call of Duty, Guitar Hero, and World of Warcraft. It's the epitome of being able to release anything and still be #1 just because they have series that are popular enough to sell well based on name recognition alone.

tyetheczar @ Feb 11th 2009 7:41PM

[Insert Nelson's "HA-HA!" image here]

AaronD @ Feb 11th 2009 7:46PM

The deferring of 1/2 billion and the increased operating costs still occurring because of the merger made the loss happen. They did well in Q4. Not as well as everyone excepted but they made money, the books are just hiding it.

The concerning thing is their outlook. They must be expecting '09 to be bad. Otherwise they wouldn't have deferred so much.

Being king isn't that hard, it just sucks being the king's accountant :p