By Adam Satariano March 2 (Bloomberg) — Activision Blizzard Inc. said it expects two senior executives at the studio that makes its top- selling “Call of Duty: Modern Warfare 2” video-game to leave amid an internal investigation of insubordination. The probe at Infinity Ward also involves “breaches of contract,” Santa Monica, California-based Activision said yesterday in a regulatory filing . The matter is expected to result in the “departure of key personnel and litigation,” according to the filing. “Call of Duty: Modern Warfare 2” was the top-selling game in Europe and the U.S. last year, the company said. The series is Activision’s most profitable packaged video-game franchise, with more than 15 million titles sold in the past year and profit margins of up to 60 percent, according to Shawn Milne , an analyst at Janney Montgomery Scott LLC in Philadelphia. “Having the top developers leave is a new risk,” Milne said in a note today. “A greater risk would be whether or not the two heads end up taking more talent away from Activision.” Maryanne Lataif , a spokeswoman for Activision, didn’t respond to requests for comment. Activision fell 15 cents, or 1.4 percent, to $10.79 at 12:45 p.m. in Nasdaq Stock Market trading. The shares rose 29 percent last year. To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net
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Activision Says Two Developers May Leave `Call of Duty’ Studio Amid Probe
By Adam Satariano Feb. 8 (Bloomberg) — Electronic Arts Inc. , the world’s second-largest video-game publisher, tumbled in extended trading after its full-year forecast trailed some analysts’ estimates. Fiscal 2011 profit, excluding some items, will be 50 cents a share to 70 cents a share, the Redwood City, California-based company said today in a statement. That’s less than the $1 a share projection of Michael Pachter , an analyst at Wedbush Morgan Securities. Sales will be $3.5 billion to $3.7 billion, missing Pachter’s $4.5 billion estimate. The maker of “Madden NFL,” which has cut more than 2,500 jobs since 2008, missed its last two annual profit targets after disappointing holiday sales. Chief Executive Officer John Riccitiello aims to boost profit by releasing fewer titles, cutting costs and expanding online and mobile offerings. Electronic Arts fell $1.33, or 7.6 percent, to $16.16 at 4:34 p.m. after the announcement. The shares, which gained 11 percent last year, rose 23 cents to $17.49 in regular Nasdaq Stock Market trading. The company reported its third-quarter net loss narrowed to $82 million, or 25 cents a share, from a loss of $641 million, or $2 a share, a year earlier. Excluding some items, profit was 33 cents, compared with the 31-cent estimate of 23 analysts surveyed by Bloomberg. Sales fell 23 percent to $1.3 billion. Riccitiello said last month that fiscal 2010 earnings would be lower than expected because of weak holiday sales . The company expects to have a fourth-quarter profit of 2 cents to 6 cents a share after releasing new games including “Mass Effect 2.” Activision Blizzard Inc. , the world’s largest video-game publisher, reports fourth-quarter results on Feb. 10. (Electronic Arts will hold a conference call at 5 p.m. New York time. To listen, go to http://investor.ea.com .) To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net .
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Electronic Arts Falls as Game Maker’s Full-Year Forecast Trails Estimates
