(Reuters) – Activision Blizzard Inc <ATVI.O> forecast holiday-quarter and full-year profit below Wall Street estimates on Thursday, as competition rose among big-budget videogame makers looking to tap a booming demand from stay-at-home gamers.
Shares of the company, which have risen 30% this year, fell 8% after the bell.
Activision forecast adjusted earnings of 63 cents per share for the fourth-quarter, compared with analysts’ estimate of $1.08. The company raised its full-year earnings forecast to $3.08 per share from $2.87, which came below estimates of $3.30.
The company also raised its annual adjusted sales forecast, betting on strong sales for its upcoming videogame in the blockbuster “Call of Duty” franchise.
“Call of Duty: Black Ops Cold War” is set to release on Nov. 13, following the launch of Sony Corp’s <6758.T> PlayStation 5 and Microsoft’s <MSFT.O> Xbox Series X. The launch of new consoles has traditionally boosted videogame sales.
Demand from stay-at-home players continues to boost videogame sales, as a surge in COVID-19 cases in several parts of the country has forced people to remain indoors.
Data from research firm NPD showed nearly $34 billion in videogame sales between January and September this year, up 21% compared to the same period a year earlier.
Activision raised its full-year adjusted revenue forecast to $8.10 billion from $7.63 billion, compared with analysts’ average estimate of $7.94 billion, according to IBES data from Refinitiv.
The company also topped third-quarter adjusted sales estimates on strong sales of “Call of Duty: Modern Warfare” and forecast holiday-quarter adjusted revenue of $2.73 billion, above Wall Street estimates of $2.63 billion.
“Call of Duty: Modern Warfare” has been the top-selling game so far this year across platforms, according to NPD.
(Reporting by Ayanti Bera in Bengaluru; Editing by Vinay Dwivedi)
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