Activision-Blizzard has a quarter gamers expected

If you’re a gamer, you probably wouldn’t be surprised that Activision-Blizzard announced, today, they had a “better-than-expected second quarter” for 2012. If you’re a Wall Street suit just looking at the company’s charts and balance sheets, you might have been surprised.

Is there a single gamer who wouldn’t have expected Diablo III (D3) and Call of Duty: Modern Warfare 3 to boost Activision-Blizzard’s quarter? Both these games were huge, plus Activision added what could be another much needed franchise to its offerings with Skylanders Spyro’s Adventure.

But Activision-Blizzard played it cool, saying,  they had a “better-than-expected second quarter”. Really? They knew they were going to have a good quarter the moment they saw the sales numbers for D3 (See the highlights, below.).

Here are some of the highlights from their “better-than-expected second quarter”:

-> Net revenues were $1.075 billion, down from the previous year’s $1.146 billion, but exceeding expectations of $950 million. Earnings per share for the second quarter were $0.16 versus expectations of $.013.

-> “Skylanders Spyro’s Adventure was the #1 best-selling console and hand-held game overall in dollars for the first six months of 2012.”

-> “Blizzard Entertainment’s Diablo III, released on May 15, 2012, set a new industry launch record for PC games and was the #1 best-selling PC game for the first six months of 2012. Through July, more than 10 million players have entered the world of Sanctuary.”

-> “As of June 30, 2012, Blizzard Entertainment’s World of Warcraft remains the #1 subscription-based MMORPG and had approximately 9.1 million subscribers.”

So not only is Activision-Blizzard kicking butt with their new game releases, but they appear to have kept their WoW subscriber base intact, though they did see a decline of about 1 million subscribers. That’s good news going into next quarter when they’ll release World of Warcraft: Mists of Pandaria on September 25, 2012.

Activision-Blizzard expects their 3rd quarter of 2012 to be a bit tougher, projecting revenues of $740 million and an EPS of $0.06. However, they remain “cautious given economic uncertainty…” Something that could be said every quarter. Is anyone ever certain about the economy?

But this is a little game smart corporations play with Wall Street: Lower expectations means less pressure to perform and a good company like Activision-Blizzard can go about their business – making great games.

It was a nice second quarter by Activision-Blizzard, one possibly unexpected on Wall Street, but not so unexpected by gamers.

(Full disclosure: I do own Activision-Blizzard stock. This is in no way a recommendation to purchase Activision-Blizzard stock. If you’ve read some of my other blog entries, you’ll notice I’m quite harsh on them, sometimes.)