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Activision Blizzard Posts Record 3rd Qtr. Results on Back of Blockbuster ‘Destiny’ Launch

Destiny” did much of the heavy lifting for Activision Blizzard, with the successful launch of the game in September enabling the videogame publisher to post record third quarter sales.

The industry’s largest gamemaker posted $753 million in revenue, up from $691 million, with sales from digital platforms accounting for 67% of its earnings, another record. On a non-GAAP basis, the company posted a record $1.17 billion in sales, up from $657 million, with digital accounting for 43% of sales.

Activision earned $416 million from subscription, licensing and other sources, compared to $359 million, while software sales were relatively flat at $337 million during the period that ended Sept. 30. The company reported a loss of $23 million, compared to a profit of $56 million, with a majority of sales not yet collected from retailers, a typical event for publishers.

Destiny” generated $500 million in first day sales to retailers on Sept. 9, three weeks before the end of Activision’s third quarter. Produced by “Halo”-creators Bungie Studios, the game became the biggest new videogame franchise launch ever, and ranks among the top 10 largest videogame launches of all time in the U.S.

“Destiny” has more than 9.5 million registered users and gamers are playing the game an average of more than three hours per day, Activision said.

Blizzard Entertainment’s “Diablo III: Reaper of Souls – Ultimate Evil Edition,” “Hearthstone: Heroes of Warcraft” and “World of Warcraft” also sold well for the company during the third quarter. “Warcraft” remains the No. 1 subscription-based MMORPG, with more than 7.4 million subscribers, as of Sept. 30, fairly flat with the game’s second quarter subscriber count, signaling flight from the franchise is leveling off as the latest update of “World of Warcraft,” “Warlords of Draenor,” nears its release on Nov. 13.

During its fourth quarter — typically the game biz’s biggest sales period — Activision released “Skylanders: Trap Team,” has “Warlords of Draenor’ debuting and gives “Destiny” its first major expansion with “The Dark Below,” on Dec. 9. “Hearthstone” should also continue to perform, with the game having exceeded 20 million registered users during the third quarter.

Activision also released “Call of Duty: Advanced Warfare,” the latest installment of its blockbuster franchise, this week. The game is expected to become another top seller, with the “Call of Duty” franchise having earned over $9 billion to date, moving over 150 million units.

Kevin Spacey is prominently featured in the game, written by Mark Boal, as its villain, and the actor has been hitting the talkshow circuit to promote his role in “Call of Duty.” The game became perhaps the first to have a clip played during NBC’s “The Tonight Show,” as a result.

“Kevin Spacey is brilliant,” Bobby Kotick, CEO of Activision Blizzard, told Variety, adding that his commitment to bringing the role to life came through in his performance in the game. If you can’t have fun doing something in a videogame, pack it up; you’re never going to have fun.”

Hiring notable names like Berg, Boal and Spacey is key to making sure launches like “Call of Duty: Advanced Warfare” are “culturally significant entertainment events,” Kotick said. “We’re never going to abandon the big budget, big commitment marketing releases. That’s just part of how we establish them as important events from a cultural perspective.”

Activision is looking forward to 2015 as another banner year, with the launch of two potential new franchises — “Call of Duty Online,” which we expect will enter an unlimited beta test, including virtual item sales, in China during the first quarter, and Blizzard Entertainment’s “Heroes of the Storm,” Kotick said.

“Looking ahead, we have more opportunities than ever before to fuel our growth by creating great content using new platforms and business models while also expanding into new geographies,” he said. “We are embracing all of these growth opportunities with the same commitment to excellence that we have demonstrated over the past 23 years.”

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