) initially traded higher on Thursday following a solid earnings report. Unfortunately for investors, the gains were short lived, as the stock sold off later on in the session, in line with the broader market's decline. Activision reported third quarter earnings per share of $0.15, significantly higher than the $0.08 that was estimated. Revenue came in at $751 million -- also an impressive beat of a $709.8 million estimate. On top of that, Activision projected a strong future, guiding fourth quarter EPS at $0.70, more than the $0.67 consensus estimate. The company expects fourth quarter sales to come in at $2.41 billion, more than the $2.34 billion that was estimated. Activision's performance stands in stark contrast to earnings reports from other video game developers. THQ (NASDAQ:

) beat expectations when it reported October 30, but gave poor guidance for the upcoming quarter. Activision's hopeful guidance for the next quarter was primarily due to the upcoming release of the next installment in its Call of Duty franchise, Call of Duty: Black Ops II. The company also spoke positively about its existing games, stating that Diablo III -- which came out in May -- continues to sell well. Activision's popular online, subscription-based RPG World of Warcraft also did well, due to the launch of a new expansion. World of Warcraft has been a cash cow for the company for quite some time, but speculation has risen about the game's declining subscribers (it was first released in 2004). But, perhaps most significant, was the strong success of the company's Skylanders, which Activision said it has generated at least $500 million from. Still, there are other areas investors might be concerned about. Activision admitted that 2013 would be a difficult year for the video game industry as a whole. There is also the fact that Call of Duty will be facing a significant challenger this holiday season -- Microsoft's (NASDAQ:

) Halo 4. There's also the issue of Vivendi's involvement. The French company owns over 60 percent of Activision, and it has been widely speculated for quite some time that Vivendi is looking to sell its stake. At any rate, Activision is intriguing for its business model, which is a bit different from other game developers. Rather than focusing on just achieving pure sales, most of Activision's big games carry the potential for a steady stream of revenue. World of Warcraft is most explicit with its monthly subscription cost, but the rest of Activision's games also have some component of this as well: Skylanders encourages players to buy additional toys; Diablo III has an in-game trading system which Activision taxes; Call of Duty has an optional subscription plan and players are encouraged to buy the new version every November. Is Activision the best video game developer around? Perhaps. But won't matter if the whole industry is struggling. Shares of Activision traded at $11 on Thursday, down a little over 1 percent.