For the past few years, Activision Blizzard (NASDAQ: ATVI) wasn't known for blowing away investors with quarterly earnings reports. The same happened this month when numerous analysts were expecting a loss after reports of Call of Duty: Ghosts underperforming.

So you can imagine the surprise of stock watchers (and shareholders like myself) when the company not only put together an impressive earnings report that sent the stock to multi-decade highs of over $19 per share, but also showed confidence that 2014 will be strong in terms of video game selection and financial performance.

CoD, Warcraft still strong
The earnings report beat expectation's thanks to not just Call of Duty, but also a surprise bump in subscriptions for the once mighty MMORPG World of Warcraft. After rising to 12 million subscribers just a few years ago, Warcraft slipped to just 7.5 million in 2012, a huge hit for a game long considered to be Activision's bread and butter. With the 300,000 subscription boost from 2013, and a fifth expansion to be released later this year, there is optimism that the game can make a comeback with new subscribers while lowering churn.

Despite initial claims that the decade-old Call of Duty franchise has run its course, it came in as the #1 franchise in North America for 2013, even though its global sales were down compared to Black Ops II and rival Take-Two Interactive's Grand Theft Auto 5. In addition, Activision reported that Skylanders, a game that involves using physical action figures as portable video game pieces, came in as the #3 franchise in North America and Europe.

The success of these two games contributed to a $78 million increase in non-GAAP revenue year over year, bringing the company's yearly haul to $860 million and an operating cash flow of $1.26 billion. Even better, Activision bought back $5.8 billion in shares from Vivendi after the two companies separated, paid out $215 million in dividends, and cleared $375 million of debt.

Increased control over company finances
These huge improvements enabled Activision to bump its dividend to $0.20 per share, but more importantly increased the company's control over its finances, enabling it to invest in its large 2014 slate of games. These include; the March 25 release of Diablo III and the Sept. 9 release of the highly anticipated open map game Destiny, made by recently-purchased Halo makers Bungie. Destiny has so much hype that Activision labeled it the company's third "billion dollar" franchise, a big statement for a company that traditionally offers "conservative" guidance in earnings releases.

Final thoughts
The newfound confidence, justified by better-than-average financial news, and a 10% jump in share price, is getting industry watchers excited. Many were surprised when Activision's price jumped to $21 per share last summer, but if the new games meet raised expectations, that estimate might be low.

Bungie's name recognition should give Destiny strong sales and good press upon its release. While the fourth quarter is traditionally the company's best quarter due to the holiday shopping season, new game releases appear to be structured so that each quarter will have a marquee release. A drop-off in earnings should be expected when the first quarter report comes out, but the latter nine months of the year could get Activision to $21 per share, if not higher.