Guitar Hero and Call of Duty 4 Drive Activision Forward

The strong sales of hit video games such as Guitar Hero 3 and Call of Duty 4 have certainly made Activision really happy, since these were the reasons for a higher than expected quarterly profit for the giants. And with a net profit almost 50 percent bigger than last year, it seems that cash keeps going into the publisher's pockets.

Activision also predicts that the revenue in their fourth quarter will be somewhere around $350 million, about 25% higher than the average forecast of Wall Street analysts on Reuters Estimates. Of course, a more aggressive roll-out of GH3 in Europe is a necessity to sustain the current growth.

"What's yet to be demonstrated is whether demand for 'Guitar Hero' will be as robust throughout Europe as a whole as it has in the North American market," said Ed Williams, an analyst with BMO Capital Markets..

But Activision has no fears. The company is also banking on games tied to upcoming films such as "Kung Fu Panda" from DreamWorks or the next James Bond Title from Sony. Even though these products, as well as the other will be important for the profit's growth, Activision CEO Bobby Kotick told Reuters that Guitar Hero 3 is "probably the most important". And we thought that GH4 was coming...

"We are making progress (in Europe) on the inventory front, on getting local content. We are definitely a year behind in Europe versus what we did in North America," Kotick said. "All the products will be important this year but 'Guitar Hero 3' will probably be the most important."

Activision posted a third-quarter net profit of $272.2 million, or 86 cents per share, compared with $142.8 million, or 46 cents per share, a year earlier. Excluding special items such as stock-based compensation, Activision earned 90 cents per share, beating the average Wall Street target of 81 cents.