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Activision reports $2.9 billion net revenues for FY 2008

Thu 08 May 2008 6:55pm GMT / 2:55pm EDT / 11:55am PDT
Publishing

CEO Kotick notes that 2008 was the best year in the company's history, with Q4 the most profitable non-holiday quarter

Activision Publishing

Activision, Inc. is a leading international publisher of interactive entertainment software products....

activision.com

Activision has released its Q4 and full fiscal year 2008, reporting a record USD 2.9 billion in net revenues for the fiscal year - a 92 per cent increase over the prior fiscal year.

Net income for the fiscal year was USD 344.9 million, or USD 1.10 in earnings per diluted share. For the prior fiscal year, the company reported net income of USD 85.8 million, or USD 0.28 in earnings per diluted share.

For the forth quarter ended March 31, Activision reported net revenues of USD 602.5 million compared with net revenues of USD 312.5 for Q4 of fiscal 2007. Net income was USD 44.2 million, or USD 0.14 in earnings per diluted share.

The latest earnings mark sixteen years of consecutive revenue growth, according to the company.

"Fiscal 2008 was the best year in our history and Q4 was the largest and most profitable non-holiday quarter, even though we did not release any new titles," said Robert Kotick, chairman and CEO of Activision.

Activision's fourth quarter results were driven by the continued success of Guitar Hero III: Legends of Rock and Call of Duty 4: Modern Warfare. Both franchises passed the billion dollar mark in sales during the fiscal year.

"During the fiscal year, we were the #1 US console and handheld publisher in dollars for the first time ever, according to The NPD Group, and we grew our worldwide share of the console, handheld and PC markets year over year," he continued.

Kotick went on to say that the company had increased stockholders' equity by 38 per cent.

"We own or control some of the most successful brands in interactive entertainment, and we will continue to focus our resources on proven properties with broad global appeal," he said.

For Q1 of FY 2009, Activision plans to release Enemy Territory: Quake Wars for the Xbox 360 and PS3, Kung Fu Panda on the Xbox 360, PS3, PS2, Wii, PC and DS, Guitar Hero: On Tour for the Nintendo DS and Guitar Hero: Aerosmith for the Xbox 360, PS3, PS2 and Wii.

Activision expects net revenues of USD 2.75 billion and earnings per diluted share of USD 0.72 for fiscal 2009 on a stand-alone basis - not including Vivendi Games.

For Q1 2009, Activision expects net revenues of USD 500.0 million and earnings per diluted share of USD 0.04 on a stand-alone basis.

Update: In a conference call to investors, Kotick said he expects 15 per cent growth to the combined US and European software markets in calendar year 2008.

He also expects a 60 per cent increase in the installed bases of the current generation of hardware - estimating 3-4 million PS3 consoles, 4-5 million Xbox 360 consoles and 7 million Wii consoles will be sold.

He said that this year will see a 25 per cent increase in the number of SKUs released by the company - the largest line-up ever.

Activision said that it would be rolling out development of additional SKUs and software related to Guitar Hero to some of its other studios who have not been involved with the franchise to date.

Future calendar year games mentioned in the call include titles based upon DreamWorks' Madagascar 2 and Monsters vs. Aliens films, James Bond 007: Quantum of Solace using the Call of Duty 4 engine, Spider-man: Web of Shadows and a sequel to Marvel Ultimate Alliance.

Michael Griffith, president and CEO of Activision Publishing, addressed the recent announcement that THQ would be publishing games based upon DreamWorks Animation's Master Mind film in 2010.

"We've got a great relationship with DreamWorks. We've got a long-term deal that covers many properties, as you know - including three titles this year that we are very excited about."

"So, when we look at this, we are interested in long-term relationships with our licensed properties. Our strategy doesn't normally compel us towards single titles. So, we're focused on maximizing the current DreamWorks arrangement."

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