(Reuters) – Activision Blizzard Inc <ATVI.O> raised its annual adjusted sales forecast on Thursday, betting on strong sales for its upcoming videogame in the blockbuster “Call of Duty” franchise as demand from stay-at-home gamers continues to rise.
The company raised its full-year adjusted revenue forecast to $8.10 billion from $7.63 billion. Analysts had expected adjusted sales of $7.94 billion, according to IBES data from Refinitiv.
Shares of the company, which fell 8% immediately after the results as some analysts viewed the improved forecast as conservative, pared most of the losses and were down marginally after the bell.
“Activision has been typically conservative going into the next quarter. Many stocks are seeing automatic ‘sell the news’ on earnings reports good or bad ahead of elections. Activision caught in that too,” Elazar Advisors analyst Chaim Siegel said.
Big-budget videogame makers are preparing to tap the demand surge from stay-at-home players as next-generation consoles enter the market this holiday season. Activision is releasing “Call of Duty: Black Ops Cold War” on Nov. 13, closely following the launch of Sony Corp’s <6758.T> PlayStation 5 and Microsoft’s <MSFT.O> Xbox Series X.
Demand from players continues to boost videogame sales, as a surge in COVID-19 cases in several parts of the country has forced people to remain indoors.
Data from research firm NPD showed nearly $34 billion in videogame sales between January and September this year, up 21% compared to the same period a year earlier.
The company also topped third-quarter adjusted sales estimates on strong sales of “Call of Duty: Modern Warfare” and forecast holiday-quarter adjusted revenue of $2.73 billion, above Wall Street estimates of $2.63 billion.
(Reporting by Ayanti Bera in Bengaluru; Editing by Vinay Dwivedi)