Activision Blizzard Inc. said Wednesday that its fourth-quarter loss widened to $286 million, despite strong revenue from its blockbuster Call of Duty: Modern Warfare 2 title along with sales of games that also have an online presence.
The Santa Monica video game publisher lost 23 cents a share for the quarter, compared with a loss of $72 million, or 5 cents a share, for the previous year's final three months. Revenue fell slightly to $1.56 billion from $1.64 billion, even though sales of its Guitar Hero titles fell 35%.
The results included deferred revenue of $938 million from the sale of games that included an online component. Activision and other major game publishers book revenue from such games over several months, even though they receive the full amount at the time of sale.
If those sales were recognized in full, Activision's quarterly sales would have been $2.5 billion, up 6.8% from a year earlier. Net income would have grown 47% to $632 million. Much of that growth came from Modern Warfare 2, which garnered sales of $550 million in the first five days after it was released on Nov. 10.
For this year, Activision forecast $4.2 billion in sales, down from $4.3 billion last year, but expects much higher earnings of 47 cents a share, up from 9 cents.
Activision executives said they expected that continued weakness this year in music titles and games for more casual players would be offset by new offerings from its Blizzard Entertainment studio, including World of Warcraft: Cataclysm and Starcraft II.
"These are expected to be very high-margin titles," said analyst Colin Sebastian at Lazard Capital Markets.
The company also said it plans to buy back $1 billion worth of its stock this year.
Its shares rose 5 cents at $10.10 in regular trading before it reported its results. Shares gained as much as 55 cents in after-hours trading.