Activision Blizzard Inc., the video game publisher behind "World of Warcraft" and "Call of Duty," reports fourth-quarter results after the market closes Wednesday.
WHAT TO WATCH FOR: Activision has fared a bit better than its peers in weathering the recession. The company's "Call of Duty: Modern Warfare 2" broke entertainment records last fall when it made $550 million in worldwide sales during its first five days. By January, it crossed the $1 billion mark.
The question is whether stellar "Call of Duty" sales will be enough to make up for weakness elsewhere.
"Although Modern Warfare 2 was clearly a monster hit, we believe virtually everything else came in below the company's forecasts," said Broadpoint AmTech analyst in a note to investors.
The music game genre, especially, has been faltering, so investors will be listening to plans for its revival. Activision, which is majority-owned by French conglomerate Vivendi SA, publishes "Guitar Hero" and offshoots like "DJ Hero."
WHY IT MATTERS: Activision sells some of the world's best-known video games, which have become mainstream entertainment on par with movies and music. How well its games do reflect consumer sentiment across a broad swath of demographics — from hardcore gamers playing "World of Warcraft" to 30-something fathers playing "Call of Duty" to tweens picking up "Band Hero."
WHAT'S EXPECTED: Analysts, on average, are expecting a profit of 43 cents per share on sales of $2.23 billion, according to a poll by Thomson Reuters.
LAST YEAR'S QUARTER: The company posted a loss of $72 million, or 5 cents per share, weighed by charges from its combination with Vivendi. Adjusted earnings were 31 cents per share.
Revenue totaled $1.6 billion and adjusted revenue was $2.3 billion. The adjusted sales figure excluded changes in deferred revenue and results from businesses that Activision was exiting.
