Key publishers raise guidance as 2004 starts well for game sales

Both Activision and THQ have raised their financial projections for the current quarter as stronger than expected videogame sales throughout the first calendar quarter of 2004 made themselves known on the industry's bottom lines.

THQ lifted its quarterly outlook from income of 7 cents per share on revenues of $90 million to 12 cents per share on income of $110 million in the quarter ended March 31st, bringing its estimates back in line with its original projections before Full Spectrum Warrior slipped out of the quarter.

In effect, then, the strong performance of MX Unleashed and continued sales of the company's holiday line-up has managed to fully compensate for missing the launch date of one of the biggest titles in THQ's portfolio - an impressive feat.

Activision, meanwhile, has seen its projections for the same quarter reversed from a 1 cent per share loss on sales of $125 million up into a 1 cent per share profit on sales of $155 million, attributed also to better than expected game sales.

Unsurprisingly, both companies saw their share prices rally on the news - especially Activision, since major broker Merrill Lynch upgraded the company to "Buy" after the announcement of the revised projections - and a number of other game publishers, including EA and Take-Two, also saw their share prices climb.

Activision now expects to earn 50 cents per share on sales of $940 million for the full year, up from 48 cents on sales of $910 million. THQ meanwhile expects profits of 89 cents per share on earnings of $628 million, up from previous estimates of 84 cents on $608 million revenue.

The news is especially positive since the first quarter of the year is traditionally one of the most difficult for games sales, but in recent years the industry has seen itself moving gradually to a model which enjoys more consistent year-round sales than previously.