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Activision stock skyrockets

'Guitar Hero III,' 'Call of Duty 4' boost sales

Boffo sales for “Guitar Hero III” and “Call of Duty 4” helped Activision boost its guidance for the second time in less than a month, sending its stock skyrocketing by 14% Tuesday.

Vidgame publisher said that it is upping revenue guidance for the fiscal year ending March 31 from $2.07 billion to $2.3 billion. Most of the increase is expected to come during the current holiday season, for which Activision increased its predicted revenue from $1.05 billion to $1.22 billion.

Publisher last upped guidance earlier this month when it reported quarterly earnings.

Increase should make Activision a close No. 2 in sales for the holidays behind regular market leader Electronic Arts, which is predicting revenue of $1.32 billion-$1.58 billion for the quarter ending Dec. 31.

EA handily beat Activision in the quarter ended Sept. 30 thanks to “Madden NFL ’08” and is expected to end up well ahead for the full fiscal year ending in March, with $3.35 billion-$3.65 billion in revenue.

Activision is gaining ground, however, thanks in part to “Guitar Hero” publisher RedOctane, which it bought last year for $100 million. Driven largely by sales for “Guitar Hero II,” it was the No. 1 third-party publisher, ahead of EA, in the first half of the year.

“Guitar Hero III: Legends of Rock” appears to be the biggest reason behind its holiday gains. Game was the top U.S. title in October based on just one week of sales at the end of the month, when it grossed more than $115 million at retail. Activision didn’t update sales for November, but numerous stores sold out of the game over Thanksgiving weekend.

In its guidance update, Activision CEO Bobby Kotick also specifically mentioned “Call of Duty 4: Modern Warfare,” saying that it and “Guitar Hero III” are already “two of the biggest entertainment titles this year.”

There was no mention of whether some other Activision titles that have drawn weaker critical receptions, such as “Tony Hawk’s Proving Ground” and “Bee Movie Game,” are selling well.

Publisher also strongly hinted that a sequel to this past summer’s vidgame adaptation of the “Transformers” movie is in the works, regardless of whether and when a film sequel appears. Kotick referred to “Transformers” as one of the “new brands” in the publisher’s portfolio. Activision has a history of continuing movie franchises in the vidgame world, as it did recently with a new “Spider-Man” game.

Activision stock closed up 14% Tuesday at $21.54.

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