3.    Activision

Market Share: 9% (UNCH)
2006 Position: 3 (UNCH)
Revenues: $1.5 billion (+3%)
Profits: $86 million (+112%)
Expectations: 19% revenue growth for 2008
12 Month Range: $10-$21 <ATVI.O>
Employee Count: about 2,000
Age: 28 years
SKUs in NPD Top 100: 8 (-4)
Franchises Above 80%: 4 (-2)

Activision maintains its number three spot almost entirely through the canny 2006 purchase of Red Octane. The publisher brought with it the Guitar Hero phenomenon, which promptly proceeded to explode with Guitar Hero 2 – the result of this was a nice plumping of revenues and profits for Activision. Provided the release schedule of product refreshes and digital distribution are handled well, Activision likely has a sustainable long-term cash cow on its hands.

The usual suspects filled out the rest of Activision’s lineup this year, with Tony Hawk, Call of Duty, and Marvel: Ultimate Alliance (a sequel of sorts to X-Men Legends) all performing with the expected admirable numbers. Licensed games, in a turn on conventional logic, did not provide significant financial gains for the company.

Although the company’s 2008 expectations for the year were quite positive, early Q1 performance may be cause for concern – the recent Spider-Man 3 was pummeled in reviews and, though selling respectability, did not reach the numbers of Spider-Man 2. Likewise, Shrek the Third may have been crowded out of the market by May-released children’s games like Pokemon, as it did not make top 10 sales lists for the month of its release. Similarly to last year, Activision can be expected to grow thanks to its new entries in its long-running and well-respected franchises. This year, it will be Call of Duty 4: Modern Warfare and Enemy Territory: Quake Wars that will lead the way.

Pictured:
Guitar Hero II
Call of Duty 4: Modern Warfare
Transformers: The Game
Enemy Territory: Quake Wars