UPDATE 1-Activision raises outlook on holiday demand

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NEW YORK, Dec 19 (Reuters) - Video game publisher Activision Inc (ATVI.O) raised its outlook for revenue and earnings in the third quarter on Wednesday, citing a strong consumer response to its holiday slate.

Activision, riding the popularity of its "Guitar Hero" and "Call of Duty" games, had already raised its forecast just last month after the start of the holiday season. It said on Wednesday that the holiday slate now looked even stronger than previously forecast.

Shares of the Santa Monica, California-based company were up 3 percent in aftermarket trade following its latest financial forecast.

The company said it boosted its market share for the 11-month period to a record 16.8 percent, a 7.9 percent increase over the same period last year.

Activision is now forecasting net revenues of $1.375 billion and earnings per diluted share of 76 cents, up from its previous outlook for net revenues of $1.225 billion and earnings of 66 cents per diluted share.

Excluding the impact of equity-based compensation expense, it forecast earnings per share for the third quarter of 80 cents.

It also raised its full fiscal-year 2008 forecast, saying it expects net revenues of $2.45 billion and earnings per diluted share of 85 cents, or 80 cents excluding items. (Reporting by Paul Thomasch; Editing by Gary Hill)