A pair of videogame publishers last week posted upbeat quarter financial results amid robust sales of titles tied to Hollywood blockbusters.
Hefty sales of a game version of movie hit Harry Potter and the Prisoner of Azkaban helped Electronic Arts to 32% more profit in its June quarter. And Activision said games based on Spider-Man and Shrek sequels helped that company boost net income almost threefold in the same period.
EA reported $24 million in fiscal first-quarter profit while posting a 22% improvement in revenue to $432 million.
The Prisoner of Azkaban videogame, which arrives on DVD from Warner Home Video Nov. 23 (see story, page 8), sold 2.5 million game units for EA. Other company highlights include EA Sports Fight Night 2004 and UEFA Euro 2004, which sold about 1.5 million units and 1 million units, respectively.
The company's quarterly gains in financial results came even as the company increased its research and development expense 43% over last year.
"With one quarter in, our titles look terrific," said Warren Jenson, EA's chief financial and administrative officer. "Our financial performance is on track, [and] we're exactly where we want to be."
Jenson warned of continued higher R&D spending due to heightened pressure to create games for the coming onslaught of advanced playing consoles.
Big part of what we're investing in today," said Jenson. "That investment will pressure margins this year and next. But our performance is indicative of what we'll work to accomplish."
Looking ahead, EA forecasts second quarter revenue of $680 million to $715 million, or a year-over-year increase of 28% to 35%. Results will reflect sales for EA's latest Madden NFL title, due out Aug. 9.
"This year's lineup is stronger than last," EA chairman/CEO Larry Probst said.
Activision's rosy results, also for a fiscal first quarter, rode videogame titles including Spider-Man 2 and Shrek 2 to a 33% revenue jump at $211.3 million. The two movie licenses have already shipped a combined 5 million units.
Net income totaled $12 million.
Activision raised its forecast for fiscal 2005 to 69 cents a share from a previous 64>. And the company now expects net revenue of $1.1 billion, up from a previous projection of $1.05 billion.