May 2 (Reuters) – Activision Blizzard Inc reported first-quarter revenue above estimates on Thursday, boosted by demand for its “Call of Duty: Black Ops 4” and “Sekiro: Shadows Die Twice” videogames, but its current-quarter profit and sales forecasts fell short of expectations.
Facing intense competition from free-to-play games such as “Fortnite” and rival Electronic Arts’ “Apex Legends”, Activision has undertaken restructuring and cost-cutting efforts to boost its top and bottom line.
Labeling 2019 a “transition year”, Activision said in February it would cut 800 jobs and focus on investing more in developing its game franchises.
Activision said on Thursday it has made progress in its efforts.
The company forecast current-quarter adjusted revenue of $1.15 billion and profit of 23 cents per share, missing analysts’ average estimate of $1.28 billion and 37 cents per share.
Activision had previously said it expects materially lower financial performance from its Blizzard segment this year as 2018 benefited from the release of “World of Warcraft: Battle for Azeroth”, whereas the company is not planning a major frontline release for Blizzard in 2019.
The company will also not generate material revenue from the “Destiny” game franchise in 2019 following the sale of publishing rights to Bungie in January.
Despite this, Activision reaffirmed its full-year guidance for adjusted profit of $2.10 per share and revenue of $6.30 billion. Analysts were expecting a profit of $2.18 per share and revenue of $6.41 billion.
The company, behind popular franchises such as “Overwatch” and “Skylanders”, reported total adjusted revenue of $1.26 billion for the first quarter.
Analysts on average had expected revenue of $1.24 billion, according to IBES data from Refinitiv.
Activision said its Sekiro videogame, launched in March, sold-through more than 2 million copies worldwide in less than 10 days.
The company’s net income fell to $447 million, or 58 cents per share, in the quarter ended March 31, from $500 million, or 65 cents per share, a year earlier.
Excluding items, the company earned 31 cents per share. (Reporting by Arjun Panchadar in Bengaluru; Editing by Maju Samuel)
