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Rating the publishers: Activision Blizzard

The second in a series of publisher report cards I've penned, reprinted here for those interested. This time around Activision Blizzard's 2009 is broken down and examined, as well as the factors influencing its fortunes in 2010.

Justin Kranzl, Blogger

January 1, 2010

7 Min Read

What a difference six months can make. At the E3 expo, Activision Blizzard were the talk of the town. If it wasn't the stunning coup they pulled off with their DJ Hero event - which featured DJ AM vs Travis Barker, Jay-Z and Eminem playing live before a crowd littered with celebrities - it was the queue of punters lined up to get a look at Modern Warfare 2 in action. Even the crusty Tony Hawk brand looked in for a big shakeup with a motion sensing peripheral and a new visual look.

The future, it seemed was plastic and fantastic. But if Acti loses their top dog spot on the gaming pile any time soon, we reckon 2009 will be pinpointed as the pivotal year where the company's soaring fortunes started levelling off. Here's our reasoning.

Overall: C-
With an all-star lineup, plenty of cash, and a tough, recession-minded boss Activision seemed to be in the box seat in 2009. But a second half of the year where little seemed to go right has left a 2010 with plenty of questions to answer.

Lineup: C+
Modern Warfare 2 should automatically get you an A+ in this category you'd think. The game smashed sales records and received abundant critical acclaim - at least on console. It needed to do spectacularly well however - estimates put the cost of making the game at 40-50 million US, with a further 150 million spent in distribution and marketing. That's a lot of copies that need to be sold.

However the real problem has come from other titles in Activision's lineup. Guitar Hero 5 was sent to die as an almost simultaneous release to The Beatles: Rock Band (which we noted previously failed to sell in great volume as well). DJ Hero has managed dismal sales despite a BIG investment by Activision in marketing, talent and production. Then there's Tony Hawk RIDE - flayed by critics, and also currently flopping at a store near you.

Activision's investment on plastic peripherals and music gaming bit them in the backside this year. And while we're sure the company's number crunchers expected the market to soften up considerably, we doubt they anticipated it happening this fast, this soon.

Then there was Wolfenstein, released before Modern Warfare 2 to so-so sales. It managed the perplexing feat of giving a fanbase keen for Wolf multiplayer a good single player game and a forgettable online experience. And when you have a marketing budget the likes of which Activision has, letting a top quality title like Prototype get released and be promptly forgotten is a cardinal error.

Strategic: C
This is what hurt Activision so profoundly this year on a number of levels. Starting at the top, we've admired CEO Bobby Kotick's ability to articulate a vision and his hard nosed attitude to running a business in a recession. He's not afraid of attention, either. This year alone, Kotick sold off millions of dollars worth of Activision stock, publicly issued a (empty) threat to abandon Sony's PlayStation 3 platform, and bragged of creating a culture of "skepticism, pessimism and fear". That's when he wasn't beating up the music industry and suggesting they should pay him to be in Guitar Hero.

The trouble with being a hardass is it's got a short shelf life. People have long memories, and when the financial meltdown is in the rearvision mirror, it will be interesting to see if Kotick can retain the stunning stable of developer talent he's got at present.

The cracks are already showing. Activision bade farewell to id Software after a long and mutually profitable association. id, chafing at playing second banana to current hotness Infinity Ward, sold themselves to Zenimax Media and now sit alongside Bethesda Softworks as a powerful rival. The relationship between star developer Infinity Ward and Activision is anything but healthy, with the developer's community manager even coming out and publicly abusing Activision staff and mocking Kotick. IW co-founder Vince Zampella got in the action as well, telling press the developer had to fight Activision for the right to even make the super lucrative Modern Warfare, and that the publisher regarded them as a "PC developer". Managing developer talent was something Activision were past masters at, but possibly the hands-off approach that worked so well in the past has a hefty downside too.

Then there was Activision's scheduling and release nightmares. One example: at one stage Activision were set to release three first person shooters in the same rough timeframe: Wolfenstein, Singularity, and Modern Warfare 2. Singularity got pushed to next year, where it will struggle to find prominence amongst a field of exceptional titles. Wolfenstein as we noted made it out the door but was a pyhrric victory at best. And all the time more music games are being churned out. Guitar Hero Van Halen was being given away with Guitar Hero 5 in the USA. That sends a message in itself.

We're not even going to touch the ongoing litigation the company is fighting - partially because plenty of it is not really avoidable for a company this size, and partially because we'd be here all day.

2010 Outlook: C
Any year you have to follow on from Modern Warfare 2 is going to be a financial downer. Activision pretty much put the shiv into developer Raven's dream game Singularity by bumping it into a 2010 release window absolutely chock full of AAA titles. If music gaming sales don't suddenly soar, Activision will be facing a dilemma as to how much investment they can afford to pour into the genre.

DLC will make the company some easy cash, especially from Modern Warfare 2 but with 2010 being Treyarch's "turn" to make a Call of Duty game, the acid test will be to see what direction the franchise heads. Ironically, for a company whose recent moves have placed it at odds with PC, a fair amount of their fortunes will rest on...

The X-Factor: B+
It's on you, Blizzard. Speak to any Blizzard employee - and we mean any - and they will call themselves a "Blizzard" staffer. Not "Activision Blizzard". The company makes a point of enforcing a degree of separation from the parent company, with the basic message being "let us do our own thing - we'll make great games, and you'll make loads of money".

Coupled with Activision's less-than-stern rep for dealing with star developers, and it seems like a winning combination. However some friction must be building between Blizzard management, lead by genial Kevin Kline-lookalike Mike Morhaime and fiery Activision head Bobby Kotick. StarCraft II's delay would have sent Kotick's blood pressure soaring we'd imagine. If the developer sticks to a estimated six month beta period for the first SCII instalment, you're going to see SCII out very close to the World of Warcraft expansion, Cataclysm. And whether you personally believe there is much audience crossover between the two, Blizzard's moves with Battle.net are all about linking communities who play Blizzard games closer together. It's in everybody's interest to have punters not only buy both - but play both - and not split up the pie.

Activision is crying out for a sure-fire PC hit in the first half of 2010. If (somehow) Blizzard gets StarCraft II out before June, it will be a huge boost for Activision and will give some breathing room for the expected October release of Cataclysm. There's no doubt both titles will be monster hits - but timing their release is the big X factor for Activision in a year which could see their music game range drop further and no real cross platform mega hit in the mould of MW2 on the way.

Originally posted at http://www.gamearena.com.au/news/read.php/5047695

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