For the three months ended Sept 30, Activision's revenue rose 1.2 percent to $754 million. Taking into account the deferral of digital revenue from online games, its revenue fell 27 percent to $627 million.
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The revenue drop was expected by analysts, since the company released a new version of the popular game, "StarCraft" in the quarter a year ago. The revenue figure beat analysts' expectations of $558.4 million.
The company reported net income of $148 million, or 13 cents per share, which compares to $51 million or 4 cents per share a year earlier.
Adjusted for revenue from online games, it posted earnings per share of 7 cents, which compares to 12 cents per share a year earlier.
Activision now expects earnings per share of 85 cents on revenue of $4.25 billion for 2011, which would beat the average estimate by analysts of 79 cents on revenue of $4.11 billion.
It previously expected earnings per share of 77 cents on revenue of $4.05 billion.
(Reporting by Liana B. Baker, editing by Bernard Orr)