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Activision CEO on making Modern Warfare 3 the biggest launch ever

Activision Blizzard hopes its new Call of Duty game will help the company break all sales records for the third year in a row, Chief Executive Bobby Kotick said in an earnings call today.

The call was related to Activision Blizzard’s decision to raise estimates for the fourth quarter as a result of stronger-than-expected results for the overall company and its new big game, Call of Duty Modern Warfare 3.

“It was the largest launch in the history of Activision,” Kotick said.

Eric Hirshberg, president of Activision Publishing subsidiary, said in the same call with analysts Call of Duty Modern Warfare 3 is on track to be the most successful Call of Duty game ever. Last year’s Call of Duty Black Ops sold more than 20 million copies, and the company also said it sold more than 20 million map packs. Those map pack sales on their own would rank as the year’s third most-popular title, Hirshberg said.

The company raised its earnings estimates for the third quarter because sales of Modern Warfare 3 were ahead of expectations, with pre-orders for the game significantly ahead of the record-setting pre-orders for Black Ops.

The game launched at midnight in more than 13,000 stores around the world. Hirshberg said the company could not be more pleased with game reviews (we ranked it at 93), with average ratings coming in at 90 out of 100 on Metacritic.com.

Kotick referred to the Facebook-like Call of Duty Elite social network that debuted yesterday as a “next step in social connectivity.” But the Elite service, which provides socialization and stat tracking for Call of Duty fans, was down because too many people signed up for it. Online multiplayer gaming functioned normally on the first day, however, Hirshberg said. More than 1 million players have registered for Call of Duty Elite (both free and paid) already, and Hirshberg said the Beachhead Studios team is working hard to keep up with all of the registrations.

Hirshberg said it took a year before Xbox Live and Netflix reached a million paying subscribers. With Call of Duty Elite (which has a free version and a paid $50 a year version), Hirshberg expects to hit that number a lot sooner than a year.

Hirshberg said that 1.5 million gamers stayed up until midnight to buy the game, but he did not disclose the total number of first-day sales.

“It shows that the fan base is more engaged than ever,” Hirshberg said.

The company didn’t say which games were coming next, though it is working on a new Call of Duty game for 2012 and it is also working on an online version of Call of Duty for China.

Hirshberg said that there are now more than 92 million owners of PlayStation 3 and Xbox 360 consoles in the U.S. and Europe. That is helping fuel demand for high-end games like Call of Duty Modern Warfare 3.

In other news, Activision Blizzard said that digital revenue was $386 million in the third quarter, a new record, and up 25 percent from a year ago. Overall, digital revenue from online games such as World of Warcraft is now about 38 percent of total revenue and more than 50 percent of operating margins.

Hirshberg also said that the Skylanders: Spyro’s Adventure toy-game hybrid has sold more than expectations. He didn’t give a number, but said that millions of toys are now in the hands of kids and that all retailers have placed reorders for the product, which is prominently displayed in interactive kiosks in retail stores. The launch has been accompanied by a huge marketing campaign with TV commercials and movie theater ads.

Activision Blizzard closed the quarter with $2.9 billion in cash.


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