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Activision Blizzard has solid 2010, confirms layoffs

Game publisher sees its fourth-quarter revenue slide, but its two top titles help boost annual revenue and profits. Company also announces it will lay off 7 percent of its staff.

Activision Blizzard's two strongest franchises helped the company have a stronger financial showing in 2010.

The video game publisher announced yesterday that it generated over $4.4 billion in revenue last year, up from the nearly $4.3 billion it tallied in 2009. It was able to nab a profit of $418 million last year, nearly quadrupling the $113 million profit it posted in 2009.

Even with help from the recently released Call of Duty: Black Ops and World of Warcraft: Cataclysm, the company reported that its revenue slid in the fourth quarter to $1.4 billion, compared with nearly $1.6 billion during the same period in 2009. That said, a reduction in expenses last year helped the company post a smaller loss for the quarter--$233 million--than the $286 million it lost during the same period in 2009.

Yesterday, the company said it is stopping the development of True Crime: Hong Kong. According to a transcript on Seeking Alpha, Activision CEO Eric Hirshberg said during the company's earnings call that the title "just wasn't going to be good enough" to justify continuing its investment.

Perhaps most surprisingly, Activision also announced that it has eliminated music games from its portfolio, most notably nixing development of any future Guitar Hero titles. During his company's earnings call, Hirshberg said that Activision "simply cannot make [music] games profitably based on current economics and demand."

In addition, Hirshberg announced that Activision will lay off about 7 percent of its staff, or about 500 people, to focus its efforts on its core businesses--Call of Duty and Blizzard games.

Activision Blizzard is best-known for its two top franchises: Call of Duty and World of Warcraft. Call of Duty: Black Ops became the biggest launch in entertainment history last year, tallying $650 million in its first five days of availability and over $1 billion in its first six weeks on store shelves. World of Warcraft: Cataclysm became the fastest-selling PC game of all time, selling 3.3 million copies on its first day of availability.

In its fourth-quarter report, Activision Blizzard offered up more details on those two titles. The company said 12 million gamers around the world are subscribed to World of Warcraft. In addition, through January, Call of Duty: Black Ops has 49 percent more "unique gamers" playing online than Call of Duty: Modern Warfare 2 had during its first three months of availability. The company also reported that "over 27 million people have played Call of Duty games online, logging more than 2 billion hours."

"Activision Blizzard's key franchises have larger audience bases than ever before and we continue to see significantly enhanced user activity and engagement for our expanding online communities," Activision Blizzard CEO Robert Kotick said in a statement accompanying his company's financial statements.

Looking ahead, Activision Blizzard expects revenue to be lower, reaching $3.95 billion this year.