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Activision profits rise with ‘Black Ops’

First-quarter profits climb to $503 million

“Call of Duty: Black Ops” is staying on mission to capture more coin for the industry’s largest gamemaker, Activision Blizzard.

The military actioner, the top-selling title of 2010, continued as the bestselling game in the U.S. and Europe during the first three months of the year.

Game bowed Nov. 9, and next installment, “Call of Duty: Modern Warfare 3,” will be released around the same time this fall.

“Black Ops” topped 12 million units sold last year, more than twice as many as the second best-selling title of the year, Electronic Arts’ “Madden NFL ’11,” according to NPD Group, earning it more than $1 billion.

Continued success of “Black Ops” helped Activision Blizzard earn $1.4 billion during the quarter that ended March 31, up 11% over the same period last year. Profits rose 32% to $503 million.

On a non-GAAP basis, which excludes deferred revenue for titles, stock-based compensation and other impacts, sales came in at $755 million, up from $714 million.

Results marked Activision’s “best first quarter in the company’s history,” said Activision Blizzard CEO Robert Kotick.

Activision saw considerable gains in its digital biz, up 30% during the quarter. Digital sales, through paid subscriptions and downloadable content, now account for 50% of net revenues.

“Digital content continues to represent a significant portion of our revenues and increased by about $100 million year over year, enabling us to deliver record first-quarter operating margins and earnings per share,” Kotick said.

Gains came from sales of the “Call of Duty: Black Ops First Strike” content pack, which surpassed more than 1.4 million downloads in its first 24 hours alone, and Blizzard’s growing Battle.net service. The “Black Ops Escalation” pack was just released for the Xbox 360.

To date, “Call of Duty: Black Ops” players have logged more than 1.2 billion online hours of gameplay, the company said. Players have spent an average of 58 minutes per day playing “First Strike” since Feb. 1.

“World of Warcraft” also chalked up strong earnings, helping post a record first quarter for the online fantasy game. Title helped Activision collect $395 million from online subs, up 27% over the same period a year ago.

Moving forward, Activision said it will continue to invest heavily in its “Call of Duty” franchise to keep gamers playing with new installments, content packs and versions for Facebook and other platforms.

“Our success has been driven by making sure that we’re continuously giving back to our audiences,” Kotick said.

Company is also keen in growing the franchise in foreign territories like China and Korea, which Activision hadn’t gone after as aggressively in the past or was present five years ago.Activision will also add new content to its online and PC franchises “World of Warcraft,” “StarCraft” and “Diablo,” a new yet-to-be revealed property from Bungie (behind “Halo”); and Skylander’s “Spyro’s Adventure,” that will bring toys, videogames and the Internet together.

This quarter, Activision releases a game tied to Paramount’s summer actioner “Transformers: Dark of the Moon,” and “Wipeout in the Zone,” based on the ABC series.

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