"As you know, we were somewhat disappointed with the launch of the Wii U," Kotick said. "And I think it's a challenging environment this year, and one of the things we are concerned about is what the install base of hardware will be like for 6-11 year olds. But we have a lot of confidence in the franchise in the long term. I think we're delivering another great product this year."
Surprisingly, Skylanders ended up being the best selling toy series in 2012, eclipsing Transformers and Star Wars combined. The challenge this year, however, is in dealing with new consoles that may see a limited user base at first.
"While we had a strong 2012, we recognize that 2013 is a transition year as we enter the ninth year of the current generation of console video game systems," Kotick added. "We encounter new threats from unproven business models, and we compete against new category entrants. We aren't immune to unfavorable market dynamics, but we have navigated these transitions many times before, and we are prepared to do so again."
Both Microsoft and Sony are expected to refresh their respective console lines this year, and of course Nintendo already did with its Wii U system introduced last year.