Activision Blizzard beats expectations in Q1 despite drop in revenue

Major publisher Activision Blizzard on Wednesday reported better than expected financial results for its fiscal first quarter, despite seeing revenues fall by more than 20 percent. For the quarter ended March 31, 2012, Activision Blizzard saw net revenues of $587 million dollars on a non-GAAP basis, which beat average analyst expectations as well as internal guidance, despite dropping from $755 million year over year. Adjusted for deferral of digital revenue and other items, the company's profits reached $67 million. One of the biggest contributors for the company's declining revenues were the decreased subscriber numbers for Blizzard's flagship MMO, World of Warcraft. The game currently boasts 10.2 million subscribers, which is the same number as last quarter, but down from more than 11 million subscribers one year ago. Other major Activision franchises, however, saw some healthy growth that helped the company exceed its expectations. The Call of Duty Elite service, in particular, has grown to 10 million registered users and 2 million paying subscribers, up from 7 million registrations and 1.5 million paid subscribers last quarter. Activision CEO Bobby Kotick added that the toy-based Skylanders franchise has also remained a huge hit following its successful holiday season. "Skylanders: Spyro's Adventure was the number 3 best-selling game overall in dollars across all platforms," Kotick said. "Based on our internal estimates, we believe that Skylanders' toys sales in the first quarter exceeded those of Star Wars, the number 1 action figure line." Looking ahead to the rest of the year, Activision Blizzard Expects to see second quarter revenues of $805 million on a non-GAAP basis, and fiscal 2012 revenues of $4.53 billion. The company expects major titles like Diablo III, World of Warcraft: Mists of Pandaria, Skylanders Giants, and Call of Duty: Black Ops II to lead its sales in the foreseeable future.