* Q1 non-GAAP revenue $724 mln, beats Street view $594 mln
* Raises 2009 EPS ex-items forecast by 2 cents to 63 cents
* Shares up 2.7 pct (Adds analyst comment, details from conference call)
By Gabriel Madway
SAN FRANCISCO, May 7 (Reuters) - Activision Blizzard Inc(ATVI.O) posted quarterly results that trumped Wall Streetestimates, and raised its 2009 forecast on what the video gamepublisher called its strongest slate of upcoming titles.
The publisher of the "Guitar Hero" and "Call of Duty"franchises, whose shares rose 2.7 percent after the results,said it will continue to focus on proven big-name titles and itis planning 11 major releases in the second half of 2009.
"The base business is stable and the new business growth isoffsetting base business decline, if there is any," saidWedbush Morgan analyst Michael Pachter.
Some analysts fear growth in the hugely popular "GuitarHero" game, which passed the $2 billion sales mark in the firstquarter, will start to fade. But Pachter said those fears areoverblown, expecting "Guitar Hero" to be at minimum a $600million a year business for at least the next five years.
"They're a victim of their own success. The better they dothe farther there is to fall," he said.
Activision raised its forecast for full-year earnings pershare, excluding items, by 2 cents to 63 cents a share, andboosted its non-GAAP revenue forecast by $100 million to $4.8billion. Wall Street was expecting earnings of 64 cents pershare on revenue of $4.77 billion.
Chief Executive Robert Kotick told Reuters in an interviewhe continues to be cautiously optimistic about growth prospectsfor the video game industry.
"The confidence we have in raising our outlook for the yearis really coming from more visibility on the back-half titles,"he said. "You listen to some of our competitors and they'restill struggling with what's going to work for consumers, andwhen you look at our lineup, it's by far the best lineup we'veever had."
HIGH HOPES
Kotick said Activision has high hopes for forthcomingtitles such as "Call of Duty: Modern Warfare 2," "DJ Hero" and"Band Hero."
The company was formed through the merger of Activisionwith "World of Warcraft" developer Blizzard, the former gamesunit of France's Vivendi SA (VIV.PA), in a deal that closedlast July.
Article Source: www.reuters.com.
