World of Warcraft maker Activision Blizzard strikes record firstquarter profit

ACTIVISION Blizzard's first-quarter profit jumped 32 per cent as digital sales surged amid continuing popularity of its Call of Duty and World of Warcraft games.

The company raised its full-year outlook to an adjusted US73 cents in earnings per share on revenue of $US3.95 billion ($3.6bn), up from the February targets of US70c and $US3.9bn, respectively.

Chief executive Robert Kotick said Activision has not been materially affected by a nearly three-week outage of Sony’s PlayStation Network that has raised questions about the security and reliability of online services.

Last month, Sony took its network offline following a security breach that compromised 77 million customer accounts, leaving customers unable to play games together over the internet.

Mr Kotick said games like World of Warcraft, which require a monthly subscription payment, have created stable and growing revenue streams for Activision.

He added that Activision's investments this year will mostly focus on the company's popular franchises and higher-margin online products.

"We're still scratching the surface of the role digital delivery will play in our products and services," Mr Kotick said.

Activision's better-than-expected results stand in contrast to the broader videogame industry, which has struggled to capture customer attention as consumers embrace cheaper games made for smartphones, tablets and popular websites such as Facebook.

Activision, by comparison, has produced some of the most popular titles in the industry, attracting customers who regularly replay its games online and buy additional content packs in droves.

For the latest quarter, Activision reported a profit of $US503 million, or US42c a share, up from $US381m, or US30c a share, a year earlier. Excluding the impact of deferred sales, stock-based compensation and other impacts, adjusted earnings rose to US13c from US9c.

Total revenue jumped 11 per cent to $US1.45bn. On an adjusted basis, which excludes the impact of the change in deferred sales, revenue climbed 5.7 per cent to $US755m.

In February, the company projected adjusted earnings of about US7c a share and fully-reported revenue of $US1.28bn.

For the current quarter, the company expects earnings of US4c on revenue of $US575m, compared with the US8c and $US661m predications by analysts polled by Thomson Reuters.

Operating margin grew to 46.5 per cent from 39.1 per cent.

Product sales increased 7.6 per cent to $US1.06bn, while subscription, licensing and other revenue grew 20 per cent to $US388m.

Activision's shares were up 0.6 per cent, to $US11.61 in after-hours trades in New York, after closing up nearly 1 per cent.

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