Activision 4Q profit soars past expectations

Activision also said Thursday it is on track to close its combination with Vivendi Games, which is expected to take place in the next few weeks. The combined company will rival to Electronic Arts the world's largest video game publisher.

For the three months ended March 31, Activision earned $44.2 million, or 14 cents per share, compared with a loss of $14.4 million, or 5 cents per share, in the same period a year earlier.

Excluding stock options costs, Activision earned $54.9 million, or 17 cents per share, far more than the 5 cents per share expected by analysts polled by Thomson Financial.

Revenue jumped 93 percent to $602.5 million from $312.5 million, beating analyst projections of $369.1 million and Activision's own guidance of $350 million.

Noting that the company had no new releases during the quarter, Chief Executive Bobby Kotick said the results emphasize the power of Activision's "Guitar Hero" and "Call of Duty" franchises. It was the company's most profitable quarter outside of the holiday season.

The video game marketplace is thriving, even as U.S. consumers are cutting back spending in other areas. Games, Kotick told the AP, "are starting to capture the hearts and minds of the broadest audiences."

The latest generation of customers, he said, expect that video games can be an important part of their leisure time. Even during an economic slump. In last year alone, Americans spent nearly $18 billion on video games.

"Video games as an entertainment medium is probably the lowest cost per hour of entertainment," Kotick said.

When the Vivendi deal closes, the French media conglomerate will own a 52-percent stake in a new public company called Activision Blizzard. The combined company will be worth $18.9 billion, and have a large footprint in Asia with "World of Warcraft," the world's most popular online game. The deal already won regulatory approval and cleared U.S. antitrust hurdles.