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Candy Crush owner forecasts upbeat quarterly revenue even as gaming slows down

Candy Crush owner forecasts upbeat quarterly revenue even as gaming slows down

FILE PHOTO: The Activision booth is shown at the E3 2017 Electronic Entertainment Expo in Los Angeles, California, U.S. June 13, 2017. REUTERS/ Mike Blake

Activision Blizzard on Tuesday (Aug 3) forecast current-quarter adjusted revenue above estimates, as it expects demand for its popular franchises Call of Duty and Candy Crush to remain strong, sending its shares 4 per cent higher in extended trading.

This comes after peer Take-Two Interactive Software, creator of Grand Theft Auto, forecast its second-quarter adjusted sales below estimates on Monday.

Activision Blizzard said it expects robust performance from Candy Crush and World of Warcraft in the third quarter, complemented by the launch of the Diablo II: Resurrected.

It forecast quarterly adjusted revenue at US$1.85 billion, compared with analysts' estimates of US$1.81 billion.

Video game publishers saw a jump in consumer spending as the COVID-19 pandemic last year forced people to stay hunkered down at home, but with the easing of restrictions due to vaccine roll-outs gamers are cutting their console time for outdoor activities.

"As competitor and peer Take-Two and its guidance indicate, with the world opening up, despite the Delta variant, there are challenges," Third Bridge analyst Scott Kessler said.

Last week, Microsoft said its fourth-quarter revenue for Xbox content and services fell.

Activision Blizzard's raised full-year adjusted revenue forecast of US$8.65 billion came in below estimates of US$8.77 billion, according to IBES data from Refinitiv.

Earlier on Tuesday, the company said J Allen Brack, president of Blizzard Entertainment, would leave after nearly three years in the role.

The departure comes weeks after the California Department of Fair Employment and Housing filed a lawsuit against Activision over equal pay violations, sex discrimination, and sexual harassment.

"We are committed to doing everything possible to ensure our company has a welcoming, supportive and safe environment," Chief Executive Officer Bobby Kotick said on Tuesday.

The company reported adjusted revenue of US$1.92 billion for the second quarter ended Jun 30, slightly above expectations of US$1.90 billion.

Source: Reuters/jt

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