Activision posts $1.1 billion in revenue

Vidgame publisher down 6% from last year but exceeds expectations

With three of the bestselling games in the U.S. and Europe in the first half of 2012, Activision Blizzard, the videogame industry’s largest publisher, reported better-than-expected earnings during its second quarter.

For the quarter ended June 30, company posted nearly $1.1 billion in revenue, off 6% from the year-earlier period, and net income down nearly 45% to $224 million — significant earnings for an industry hit hard by sluggish sales. “Call of Duty: Modern Warfare 3,” “Skylanders Spyro’s Adventures” and Blizzard Entertainment’s “Diablo III” were its top hits.

Company boosted its full-year outlook based on strong sales expected from “Call of Duty: Black Ops II,” “Skylanders Giants” and the next upgrade to its subscription-based “World of Warcraft” online game, “Mists of Pandaria,” which should help Activision collect $4.3 billion by the end of the year.

“The majority of our key franchise launches are still ahead of us,” said Activision Blizzard chief Bobby Kotick. Keeping them fresh has been a concern for Activision, which has required more investment and development resources. But “this is the business we have chosen to be in,” he told Variety. “We’ve been doing them for 22 years. “You have to keep investing in franchises and deliver new content.”

Its nontraditional “Skylanders” gamble continues to pay off with the toys and accessories giving Activision the top revenue-generating console and handheld game in the first half of the year.

Digital sales of $343 million accounted for 32% of the company’s bottom line during the quarter. It recently announced an online version of “Call of Duty” for China through a deal with Tencent, and “Call of Duty: Elite” subscription service, which should put significantly more coin in the company’s coffers.

“Diablo III,” released on May 15, set an industry launch record for PC games, logging in more than 10 million players through July. As of the end of June, “Warcraft” was the No. 1 subscription-based MMORPG and had approximately 9.1 million subs.