Warcraft Developer Posts Huge Earnings: $981M in Q1

Dennis Faas's picture

Just a day after it was revealed popular developer 3D Realms (Duke Nukem 3D's creator) was closing its doors for good, there's now word that Activision Blizzard, the company responsible for Guitar Hero and World of Warcraft, has posted huge profits for the first quarter.

It seems not every game company is struggling in this economic climate.

Yesterday's news on 3D Realms seemed to be a pretty strong indicator that the gaming industry, like just about every other business, was taking its knocks. In addition to Duke Nukem's untimely (or timely?) death, Microsoft revealed it would lay off a significant portion of its in-game advertising staff, while industry leaders THQ and even goliath publisher Electronic Arts reported losses.

How surprising then that Activision Blizzard has announced staggering earnings for the period January to March. The company has reported that it exceeded its $860 million earnings target, taking in a whopping $981 million it net revenues. That's nearly a billion bucks in an industry that sometimes appears on the verge of collapse.

What makes Activision Blizzard so profitable?

Simply put, the company is responsible for an all-star gaming line-up. Its titles, including the Call of Duty franchise (Call of Duty 5: World at War being the most recent release), Guitar Hero, and World of Warcraft are all soaring in popularity.

According to statistics group NPD, Guitar Hero: World Tour, the game that recreates the band experience right in one's own living room, was the number one best-selling third-party title in the United States across every platform. (Source: gamespot.com)

For its part, the phenomenon that is World of Warcraft is also a best-seller. World of Warcraft: Wrath of the Lich King was the top selling title on the PC charts for the quarter, and the game, due to its unique online multiplayer billing system, is extremely profitable. Players pay each month to keep playing with millions of others online, meaning Activision Blizzard makes over $100 million every month from that title alone.

So, it seems Activision Blizzard has solved the economic crisis by -- gasp! -- building games a lot of people really want to play. It's no surprise, then, that the company has announced three new games for release this fall, including Guitar Hero 5, DJ Hero, and Band Hero. (Source: latimes.com)

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