Activision Blizzard posts Q4 loss but full-year profit

Activision Blizzard is reporting Q4 losses of USD72m despite its Guitar Hero World Tour title selling globally more than any other game. The company says the loss is due to costs incurred in the USD19bn merger between Santa Monica-based Activision and Blizzard Entertainment, the gaming arm of French firm Vivendi.

The world’s largest computer games developer Activision is reporting record revenues and profits for the last year as a whole, proving it is weathering the economic downturn far better than its competitors.

Choosing to focus on whole-year results, Activision CEO Robert Kotick says that the company has done far better than predicted.

?Activision Blizzard has finished the calendar year as the largest and most profitable third-party publisher with more than USD5bn of net revenues. These results exceeded the 2009 financial goals that we outlined over a year ago,? says Kotick

Kotick says the 2008 profits validate the company’s focus on established franchises instead of developing new titles.

But he predicts tough times ahead for the industry. Activision says it expects to do worse than analysts are predicting. Activision’s shares lost value despite the record profits, down 3.7% immediately following the announcement.

The gaming industry is thought to be most recession-resilient. However, most developers are suffering during the downturn. Activision has lost 50% of its share value since the summer but is still doing far better than its near rivals such as Electronic Arts (EA), whose shares are down 69% over the same period. EA announced disappointing Q4 results last week and is planning to cut 1,100 jobs in an attempt to save USD500m.

Kotick called on games console makers to begin discounting their products to increase consumption. Activision Blizzard can lay claim to producing some of the most successful computer games of the last few years, including first-person shooter Call of Duty and massive multiplayer online role-playing game World of Warcraft. The company used the conference to talk up the planned Q4 2009 release of Call of Duty: Modern Warfare 2, the follow up to one of its most critically praised titles.