Activision also announced that the company is modifying its full fiscal year 2004 and third and fourth quarter outlook. The company is raising its outlook for net revenue for the full fiscal year by $30 million to $780 million, while at the same time it is moving DOOM 3(TM) into its next fiscal year for planning purposes. However, the company is taking a one-time, pre-tax charge of approximately $23 million in the third quarter related to product cancellations including the previously announced titles Trinity(TM), Shaun Palmer's Pro Snowboarder 2(TM) and the sequel to Street Hoops(TM).

Doornink added, "The video game market is increasingly dominated by high-quality products based on recognizable franchises supported with big marketing programs. We have decided to take steps to align our business with the continuing evolution of the video game market. Specifically, we have canceled the development of 10 games, which we believe are unlikely to produce an acceptable level of return on our investment. This will enable us to focus and increase our development and marketing resources on those franchises with the greatest potential. We believe that this realignment will enhance our position to capitalize on the opportunities presented by the growing mass- market installed base of hardware platforms."

Activision's fiscal year 2005 game slate includes Spider-Man 2(TM), Shrek 2(TM), DOOM 3, Lemony Snicket's: A Series of Unfortunate Events(TM), DreamWorks' A Shark's Tale(TM), Call of Duty(TM): Finest Hour(TM), Vampire® The Masquerade - Bloodlines(TM), Rome: Total War(TM), Peter Molyneux's The Movies(TM) and X-Men(TM): Legends(TM).