Activision Blizzard, the largest U.S. video publisher, raised its earnings outlook due to strong demand for its top shooter game, Call of Duty: Modern Warfare 3, which hit stores Tuesday.

Activision Blizzard shares rose 2.2 percent in after-hours trading. The shares touched a 52-week high during the regular session on Tuesday.

The company raised its earnings per share forecast for the year by 10 percent because it now expects the latest version of Call of Duty, to perform better than it had planned. The game went on sale at midnight on Tuesday and stores such as GameStop and Wal-Mart stayed opened late so the game's fans could buy it early.

It's on track to be the most successful 'Call of Duty' game ever, said Chief Executive Bobby Kotick in an interview. He added on the conference call with analysts that pre-orders of the game were higher than last year's.

The last edition of Call of Duty generated $1 billion in revenue in less than two months in 2010, which broke an industry record.

Analysts were surprised that Activision raised its earnings outlook on Tuesday so soon after its latest game came out.

The Street wasn't expecting this but the game launched last night so Activision must have a pretty good feel for how things are going, said Sterne Agee analyst Arvind Bhatia.

Activision now expects earnings per share of 85 cents on revenue of $4.25 billion for 2011. This beat even the highest analyst estimate of 82 cents per share, according to Thomson Reuters I/B/E/S..

It previously expected earnings per share of 77 cents on revenue of $4.05 billion.

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.

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.

Adjusted for revenue from online games, it posted earnings per share of 7 cents, which beat Wall Street's expectations of 2 cents per share.

Shares were trading 31 cents higher at $14.34 in after-hours trading.

(Reporting by Liana B. Baker, editing by Bernard Orr)

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