Activision Posts Fourth Quarter Loss

Despite having the best-selling video-game franchise in the world right now, Activision Blizzard posted fourth-quarter losses of $72 million according to the Hollywood Reporter.  Strong sales from the “Guitar Hero” franchise didn’t prove to be enough to put the company in the black for the pivotal holiday sales period according to the Hollywood Reporter. 

The company recently merged with struggling competitor Vivendi and the sales figures were the first full quarter figures since the merger. 

Excluding deferred revenue and some charges, the company would have earned $429 million on net revenue of $1.64 billion. Those numbers beat Wall Street forecasts, but Activision Blizzard offered gloomy 2009 guidance, causing the stock to fall 4% in after-hours trading after rising 1% to $9.48 in the regular session.

Activision Blizzard predicted revenue this year of $4.7 billion, about $500 million shy of what analysts were estimating.

The U.S. recession, though, could provide acquisition opportunities in the near future, executives said on a conference call with analysts Wednesday. Video game stocks have been pummeled along with the rest of the market in the past six months: The biggest, Electronic Arts, is down 65%, and THQ is off 81%.

Activision Blizzard CEO Robert Kotick noted that in 2008 “we had four of the top 10 best-selling games worldwide.”

The company does have some solid products on the horizon that could help sales.

“Guitar Hero Metallica” will hit shelves later this year , as will “Monsters vs. Aliens,” based on the 3-D movie from DreamWorks Animation.  There are games tied to the films “X-Men Origins: Wolverine,” “Transformers: Revenge of the Fallen” and “Ice Age: The Meltdown.” There is also a “DJ” extension for “Guitar Hero” in the works as well as a greatest-hits version of the franchise due this year.

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