Activision Blizzard Inc., one of the world’s biggest video game publishers, announced this week that it would kill its popular “Guitar Hero” franchise as the company announced disappointing fourth-quarter earnings.
Activision Blizzard (Nasdaq: ATVI), which became the biggest game publisher in North America and Europe in 2010, said that it made $4.4 billion in revenues last year, slightly more than revenue from 2009. Bottom-line profits came in at $418 million.
Helped by robust sales from its “Call of Duty” and “World of Warcraft” games, the company announced fourth-quarter revenues of $1.4 billion. However, the company’s stock declined on Thursday on disappointing 2011 outlook.
ATVI said that North American revenues increased 6 percent from 2009, while revenues from Europe declined 4 percent. Its Asian-Pacific business blossomed although it only contributed to a few percentages of its overall revenue.
“This year, we'll move away from certain initiatives that have played an important role for us in the past, but that offer limited opportunities as we move forward,” said ATVI CEO Robert Kotick in a conference call with analysts.
Specifically, ATVI will cancel all future games related to its “Guitar Hero” franchise, a well-known brand of music games.
“Given the considerable licensing and manufacturing costs associated with this genre, we simply cannot make these games profitably based on current economics and demand,” said Activision Publishing Director Eric Hirshberg in the call. “Instead, what we'll do is focus our time and energies on marketing and supporting our strong catalog of titles and downloadable content.”
Since its debut in 2005, the iconic “Guitar Hero” has generated more than $2 billion in topline revenue for ATVI, and prompted rivals to release similar titles such as “Rock Band,” which was first published by Viacom Inc.
The Santa Monica, Calif.-based ATVI faces stiff competition in the market from leading game publishers Electronic Arts Inc. and Take-Two Interactive Software Inc.
Shares of ATVI fell by around 8 percent on Thursday afternoon. ATVI ended Thursday trading at $10.76.
Activision Blizzard (Nasdaq: ATVI), which became the biggest game publisher in North America and Europe in 2010, said that it made $4.4 billion in revenues last year, slightly more than revenue from 2009. Bottom-line profits came in at $418 million.
Helped by robust sales from its “Call of Duty” and “World of Warcraft” games, the company announced fourth-quarter revenues of $1.4 billion. However, the company’s stock declined on Thursday on disappointing 2011 outlook.
ATVI said that North American revenues increased 6 percent from 2009, while revenues from Europe declined 4 percent. Its Asian-Pacific business blossomed although it only contributed to a few percentages of its overall revenue.
“This year, we'll move away from certain initiatives that have played an important role for us in the past, but that offer limited opportunities as we move forward,” said ATVI CEO Robert Kotick in a conference call with analysts.
Specifically, ATVI will cancel all future games related to its “Guitar Hero” franchise, a well-known brand of music games.
“Given the considerable licensing and manufacturing costs associated with this genre, we simply cannot make these games profitably based on current economics and demand,” said Activision Publishing Director Eric Hirshberg in the call. “Instead, what we'll do is focus our time and energies on marketing and supporting our strong catalog of titles and downloadable content.”
Since its debut in 2005, the iconic “Guitar Hero” has generated more than $2 billion in topline revenue for ATVI, and prompted rivals to release similar titles such as “Rock Band,” which was first published by Viacom Inc.
The Santa Monica, Calif.-based ATVI faces stiff competition in the market from leading game publishers Electronic Arts Inc. and Take-Two Interactive Software Inc.
Shares of ATVI fell by around 8 percent on Thursday afternoon. ATVI ended Thursday trading at $10.76.
