Activision-Blizzard doubles annual profits to $1.1 billion

Activision-Blizzard more than doubled its annual net profit to $1.1 billion in another record year for the company.

For calendar year 2011, the company posted revenues of $4.76 billion, up from $4.45 billion the previous year, and almost $800 million higher than its outlook. Net profit rose from $418 million in 2010 to just over $1.08 billion.

The company's digital business was also at an all-time high of $1.6 billion, or around 34 per cent of total sales.

The company plans to buy back a further $1 billion worth of shares from its parent company, Vivendi, in 2012.

Key to that success, in both physical and digital retail, was the Call of Duty franchise, which enjoyed its eighth consecutive year of revenue growth.

That Modern Warfare 3 was the best selling game (in dollars) of 2011 is by now widely known, but its predecessors also sold strongly. Black Ops was the fifth best-selling game, and CEO Eric Hirschberg claimed that Modern Warfare 2 and World at War had combined sales "in the millions."

Modern Warfare 3, Black Ops and Modern Warfare 2 occupied the top three slots in the most played games on Xbox Live

The franchise also saw record engagement, with Modern Warfare 3, Black Ops and Modern Warfare 2 occupying the top three slots in the most played games on Xbox Live. Across the entire franchise, Call of Duty now has 40 million MAUs.

As of January 31 this year, Call of Duty Elite had 7 million subscribers, with 1.5 million people signing up for a premium annual membership - priced at $49.99 a year. Activision-Blizzard claims that Elite is now the third biggest game subscription service behind Xbox Live and World of Warcraft.

The company's major new IP launch of the year, Skylanders, also performed beyond expectations. It was the number one "kids game" of the calendar year, and sold 20 million toys and accessories.

Skylanders and Call of Duty Elite were repeatedly cited as two of the company's main "vectors for growth" in 2012. However, that could change drastically depending the number of products Blizzard chooses to release.

World of Warcraft finished the year with 10.2 million subscribers, with Mike Morhaime noting that there was a minimal difference over the prior quarter. In addition, the WoW Annual Pass announced at Blizzcon 2011 gathered more than 1 million registrations.

However, Bobby Kotick confirmed that, including Diablo III, Blizzard would release "at least two" products in 2012. Blizzard DoTA is likely to fill the other slot, but its still unannounced MMO featured heavily in the investor presentation's slides.

Another key area for growth in 2012 is the free-to-play, micro-transaction funded version of Call of Duty being developed for the Chinese market, which CEO Eric Hirschberg expects to "over-deliver" on gamer expectations in the region

Activision-Blizzard's full year results and its tentative 2012 release schedule will go some way toward addressing those who doubted the company's strategy of concentrating on an ever decreasing stable of IP.

Despite the company's financial success, its IP portfolio has slimmed considerably since it announced last year's results.

Activision closed racing specialist Bizarre Creations In January 2011, before choosing to shelve the Guitar Hero franchise and axe United Front's True Crime: Hong Kong shortly after its Q4 results the following month

By that point, the firm's other major IP, Tony Hawk's Skateboarding, had already stalled, with its last iteration, Shred, selling just 3000 copies in its first week on-sale in the US.

Activision-Blizzard also posted its fourth-quarter results. For the three month period ending December 31, the company generated net profits of $99 million on revenues of $1.41 billion, versus a loss of $233 million on revenues of $1.43 billion in Q4 2010.