(Reuters) - Activision Blizzard Inc (O:ATVI) forecast fourth-quarter adjusted revenue below estimates, as the video game publisher faces stiff competition from online, free-to-play games.
The company expects current-quarter adjusted revenue of $2.65 billion, missing analysts' average estimate of $2.75 billion, according to IBES data from Refinitiv.
The company had previously labeled 2019 a "transition year", cutting about 800 jobs and focusing on investing more in developing its game franchises like "Candy Crush" and "Overwatch" to boost its top and bottom line.
Traditional publishers of console-based, desktop games are facing stiff competition from the increasing popularity of online, free-to-play games like "PUBG", Epic Games's "Fortnite" and Electronic Arts' (O:EA) "Apex Legends".
The forecast overshadows a better-than-expected third quarter adjusted revenue, which was lifted by its recent launches "Call of Duty: Modern Warfare" and "Call of Duty: Mobile".
The mobile version of "Call of Duty" launched on Oct. 1 racked up 100 million downloads worldwide in its first week, according to industry site Sensor Tower.
Activision, behind popular franchises such as "Diablo" and "World of Warcraft", reported adjusted revenue of $1.21 billion for the third quarter ended Sept. 30. Analysts on average had expected revenue of $1.17 billion.
The company, which continues its e-sports push, is set to launch its "Call of Duty League" on Jan. 24 2020, following its highly successful "Overwatch" league.
The company's net income fell to $204 million, or 26 cents per share, in the quarter, from $260 million, or 34 cents per share, a year earlier.
Excluding items, the company earned 0.38 cents per share.