Ahead of Activision's earnings announcement this Thursday, Signal Hill Capital Group analyst Todd Greenwald (formerly of Nollenberger Capital Partners) predicted strong results for the leading publisher. Signal Hill's numbers forecast $375 million in revenue and $0.06 earnings per share, but Greenwald "expects results well above our numbers."
More interesting, however, is his view of the June quarter, which features the release of Guitar Hero: On Tour for the Nintendo DS. While many might feel tempted to simply dismiss the game as a watered-down version of the real Guitar Hero products, Greenwald still anticipates a big launch.
"We think this title, never having been released on any handheld platform, has the potential to sell several million units at launch, at a $49.99 price point. Furthermore, our retail channel checks show that big-box retailers are preparing to support the release very heavily. Wal-Mart, Target, and Best Buy should all be giving Guitar Hero: On Tour significant shelf space this summer," he said.
Guitar Hero: Aerosmith, which ships at the end of June "should also be very profitable, with a $59.99 retail price, and below average development costs associated with it."
Another big hit for Activision, according to Greenwald, will be Kung Fu Panda, based on the Dreamworks Animation movie. Greenwald believes the game, which is slated for June 6, "could be nearly as big a videogame hit as Shrek 3." Nevertheless, the June quarter is expected to be a tough comparison year-on-year, as last year at this time Activision sold over eight million units of a combined lineup of Guitar Hero II (360), Spider-Man 3, Shrek 3, and Transformers.
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