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Electronic Arts proved that an economic downturn can impact the "recession proof" videogames industry. Despite the release of the company's highly anticipated "Spore" in September, the gaming giant reported a wider-than-expected second-quarter loss on Oct. 30 and said it is cutting 6% of its workforce to reduce costs by $50 million as retail sales slowed in October.

Activision (nasdaq: ATVI - news - people ) Blizzard, EA's main rival, is expected to fair much better in its second-quarter earnings Wednesday. Analysts polled by Thomson Reuters expect Activision Blizzard, which formed last July from the merger between Activision and Vivendi-owned Blizzard Entertainment, to report second-quarter net income of $55.4 million, or 4 cents per share, on revenues of $632 million.

And there are indications that the company will have a very merry third-quarter, thanks to the holiday-timed release of updates to its core blockbuster franchises. In addition to the recently released "Guitar Hero: World Tour," updates to other hits are arriving in the next few weeks. "Call of Duty: World at War," the followup to the 2007 worldwide best-seller "Call of Duty 4," hits shelves Nov. 11. "Wrath of the Lich King," an expansion game of the massively popular "World of Warcraft, " launches on Nov. 13.

Analysts expect Activision Blizzard to provide an update on "Guitar Hero: World Tour" sales so far. "It comes down to the performance of specific titles," says Cowen & Co. analyst Doug Creutz. "That's what people are going to be focused on."

In terms of weathering the tough economy, Creutz says Activision Blizzard is better positioned than EA because it has more cash and less exposure to overseas markets.

Electronic Arts proved that an economic downturn can impact the "recession proof" videogames industry. Despite the release of the company's highly anticipated "Spore" in September, the gaming giant reported a wider-than-expected second-quarter loss on Oct. 30 and said it is cutting 6% of its workforce to reduce costs by $50 million as retail sales slowed in October.

Activision (nasdaq: ATVI - news - people ) Blizzard, EA's main rival, is expected to fair much better in its second-quarter earnings Wednesday. Analysts polled by Thomson Reuters expect Activision Blizzard, which formed last July from the merger between Activision and Vivendi-owned Blizzard Entertainment, to report second-quarter net income of $55.4 million, or 4 cents per share, on revenues of $632 million.

And there are indications that the company will have a very merry third-quarter, thanks to the holiday-timed release of updates to its core blockbuster franchises. In addition to the recently released "Guitar Hero: World Tour," updates to other hits are arriving in the next few weeks. "Call of Duty: World at War," the followup to the 2007 worldwide best-seller "Call of Duty 4," hits shelves Nov. 11. "Wrath of the Lich King," an expansion game of the massively popular "World of Warcraft, " launches on Nov. 13.

Analysts expect Activision Blizzard to provide an update on "Guitar Hero: World Tour" sales so far. "It comes down to the performance of specific titles," says Cowen & Co. analyst Doug Creutz. "That's what people are going to be focused on."

In terms of weathering the tough economy, Creutz says Activision Blizzard is better positioned than EA because it has more cash and less exposure to overseas markets.