Yesterday, some recently released numbers cemented what we already knew: Guitar Hero prints money and Activision is high on life.
On Thursday, the company's officially-announced fiscal reports showed an incredible increase of 163 percent in first-quarter earnings -- a number which gets even more ridiculous if you compare it to last year's first quarter deficit of $18.3 million. Strong sales of Spider-Man 3, Shrek the Third, Transformers : The Game and Guitar Hero buoyed up Activision's financial predictions for 2008 even higher, with revised sales estimates now standing at roughly $1.8 billion for the entire year.
CEO Robert Kotick was obviously pleased to deliver the news. His company has managed to ship more than eight million units of new games in the first half of '07, making this year "The largest and most profitable in company history".
Says Kotick: "Our focus on growing our strong franchises and next- generation console leadership position is yielding superb results. We intend to continue expanding our franchise portfolio, strengthening our development capabilities and improving our operating efficiency over the balance of the fiscal year. We believe this strategy will create strengths and capabilities that should enable us to continue growing our revenues, operating margin and earnings per share, as well as increase our return on invested capital."
An earnings update (posted on Gamasutra) gives some clue as to what the company may intend to do over the next six months to keep its forward momentum. Unsurprisingly the focus seems to be largely on guitar heroics.
The second half of '07 will see 30,000+ Guitar Hero III kiosks set up in retail locations worldwide -- more than three times as many units as were shipped when GH2 launched. In addition, they're ramping up production of those Gibson SGs and actively searching for a way to bring more "internationally relevant music" to the Guitar Hero download scene.
In case you're wondering what all the fuss is about, Kotick also mentioned in his address that the sell through rate for recently-released Guitar Hero Encore: Rocks the 80s was "the highest first day sell through in Activision history" (despite basically being a reskinned GH2 expansion). Between that and Quake Wars: Enemy Territory the company is looking at sales of about $250 million over the last 3 months alone.
Activision's announcement also references the cancellation of GTA IV, but only tangentially. An unnamed representative noted that the window of opportunity will likely make Call of Duty 4 "the number one product on the PS3" [in the fourth quarter] while also conceding that "it's a little early to figure out just yet... what this will do to our business."
The company did mention that it is considering adjusting some of its fall release dates "within a reasonable window of time" to take advantage of its sudden lucky break.