Activision Blizzard Sees Bigger Losses Despite Modern Warfare 2

Activision Blizzard has announced that for the third quarter of the current fiscal year, which ended on December 31, 2009, it lost 286 million dollars, which is significantly more than the 72 million in losses it posted during the same period of 2008. Revenue was also down when the comparison is made but the publisher has managed to perform better in a tough economy than many analysts had predicted.

When Generally Accepted Accounting Principles are used, Activision Blizzard reports that it has generated revenue of about 1.56 billion dollars during the final quarter of 2009 but when non GAAP principles are employed, the figure jumps quite a bit to reach 2.50 billion.

The company has not explained where the disparity comes from. For the entire 2009, the joint venture managed to get more than 4.28 billion dollars in sales and generated earnings per share of nine cents.

The losses posted by the company were linked to the falls seen in the music genre, where Guitar Hero and DJ Hero are important competitors, and in the casual games market. Call of Duty: Modern Warfare 2 from Infinity Ward was the biggest videogame release of 2009, which provided its main revenue source.

Bobby Kotick, the Chief Executive Officer of Activision Blizzard, stated that “On a non-GAAP basis, our performance enabled us to deliver the most profitable year in our company's history and record operating margin. We generated approximately $1.2 billion in operating cash flow and ended the year with approximately $3.3 billion in cash and investments.”

Looking forward to 2010, the company is getting ready to release both the first chapter of StarCraft II and the Cataclysm expansion for the World of Warcraft MMO, which are expected to be the main sources of revenue for 2010. A new Call of Duty title is also set to arrive in time for the holidays.