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Activision in Discussions with Global Tech Providers for Cloud Gaming Solutions

Video game publisher Activison announced that it is in talks with cloud providers for videogame streaming.

The company revealed in its latest quarterly earnings report that it’s in talks with several global tech providers over the potential to provide streaming videogames.

Chief Operating Officer Collister Johnson said during the quarterly earnings call with investors that because of the company’s interest in the up-and-coming technology, it is in discussions with “global tech platform providers and about their cloud infrastructure and potential streaming solutions.”

There was no specification on which providers the company is in talks with.

Nvidia Corp. as well as Electronic Arts have both become involved with the new technology but neither has a full-fledged product yet.

“Latency requirements mean a lot in gaming, [they are] live, measured in milliseconds and can disrupt the gaming experience in a way that, it doesn’t really matter for watching a movie or a TV show,” said Johnson on the earnings call.

“And so we feel like there’s still work to be done before the tech is ready for mainstream adoption. So we do think this will happen. Probably not in the near term and we’re well-positioned when it does.”

According to Johnson, Activision believes videogame streaming will lead to faster growth because it may expand the audience of players to people who don’t have or can’t afford expensive gaming computers. Fans will also be able to play on more devices and in more places.

Net income for the second quarter was $402 million, or 52 cents per share. This is compared to $243 million, or 32 cents per share, in the year ago quarter.

On an adjusted basis, the company reported earnings of 41 cents per share, which beat analysts’ estimates for 35 cents per share, according to data compiled by Thomson Reuters in a survey.

Adjusted revenue was $1.39 billion, which was a 2.1% decline compared to the $1.42 billion it raked in during the second quarter of fiscal 2017. Analysts were waiting for revenue of $1.38 billion.

Looking ahead, for the third quarter the company has forecast its adjusted earnings to be 47 cents per share. Wall Street is expecting 66 cents per share. The company also forecast adjusted revenue as being $1.62 billion, bellow the $1.87 billion that analysts are waiting for.

CEO Robert A. Kotick said during the call, “Our results for the Q2 exceeded our prior outlook and we delivered record first half revenues and earnings per share. Our franchises continue to entertain large audiences, drive deep engagement and attract significant audience investment. We have unique assets and capabilities.”

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