Video games maker Activision Blizzard warned investors on Wednesday that it expects a challenging second-half and holiday quarter driven by heavy competition and uncertainty around the launch of new video game consoles.
"While we have had a solid start to the year, we now believe that the risks and uncertainties in the back half of 2013 are more challenging than our earlier view, especially in the holiday quarter," CEO Bobby Kotick said in a statement.
He said that shift in release dates of competing products, the disappointing launch of the Wii U and subscriber declines in the World of Warcraft business contributes to concerns.
Subscribers of "World of Warcraft," Activision's most profitable business and the source of a steady stream of subscription-based revenue, dropped sharply to 8.3 million last quarter from 9.6 million in the previous quarter, the company said.
The game publisher's warning overshadowed strong first-quarter results.
The company's earnings excluding items jumped more than 1.8 times to 17 cents a share, from 6 cents a share in the year-earlier period. Revenue rose 68 percent to $990 million.
Analysts had expected the company to report earnings of 11 cents a share on $705 million in revenue, according to a consensus estimate from Thomson Reuters.
For the second quarter, the company projects earnings of 5 cents a share on $980 million in revenue. Analysts currently expect 5 cents a share earnings on $603 million in revenue.
After the earnings announcement, the company's shares lost in extended-hours trading. (Click here to get latest quote.)
—Reuters contributed to this report