Activision Blizzard to Close Unit in Charge of Guitar Hero

The move follows Viacom’s decision in November to sell its money-losing unit behind the Rock Band video games.
Activision’s shares tumbled after the announcement, but investors appeared more concerned with the company’s disappointing revenue forecast than the demise of the game.
“In retrospect, it was a $3 billion or more business that everybody needed to buy, so they did, but they only needed to buy it once,” said Michael Pachter, a Wedbush Morgan analyst. “It’s much like Wii Fit. Once you have it, you don’t need to buy another one.”
On a conference call, Activision said its reorganization would mean the loss of about 500 jobs in its Activision Publishing business, which has about 7,000 employees. But the company’s overall work force numbers are not going to change much because it is hiring people elsewhere.
Activision did better than expected in the fourth quarter, which ended in December, but that was already anticipated. Activision said on Wednesday it had lost $233 million, or 20 cents a share, in the latest quarter, compared with a loss of $286 million, or 23 cents a share, a year earlier. Revenue fell to $1.43 billion, from $1.56 billion.
Its adjusted earnings of 53 cents a share were better than last year’s 49 cents and beat analysts’ expectations of 51 cents, according to FactSet. For the current quarter, which ends next month, Activision forecast adjusted earnings of 7 cents a share, and adjusted revenue of $640 million. Analysts were looking for earnings of 10 cents a share on higher revenue of $771 million.
Stock in the company, which is based in Santa Monica, Calif., fell about 7 percent in after-hours trading.