Activision Blizzard CEO Bobby Kotick has been on fire this week. At the Deutsche Bank Securities Technology Conference in San Francisco he made a number of comments that seem to have been calculated to explode the heads of gamers, developers, and anyone who cares a jot about the industry. In a wide-ranging speech, Kotick – who earned $14m last year – dropped a number of bombs about Activision’s future plans, none of which were designed to make anyone happy apart from Activision shareholders.
Essentially, Kotick is in thrall to the almighty dollar to the expense of all else. Thus: “In the last cycle of videogames you spent $50 on a game, played it and took it back to the shop for credit. Today, we’ll (charge) $100 for a guitar. You might add a microphone or drums; you might buy two or three expansions packs, different types of music. Over the life of your ownership you’ll probably buy around 25 additional song packs in digital downloads. So, what used to be a $50 sale is a $500 sale today.”
This echoes a statement Kotick made last year when he explained the company’s lack of support for some new games, specifically ones that don’t lend themselves to sequels. Activision, Kotick said, has no interest in games that “don’t have the potential to be exploited every year on every platform with clear sequel potential and have the potential to become $100 million franchises.”
Talking of $100m franchises, Kotick likes the way that World of Warcraft is heading. “The best of all margins – the 25 per cent operating margin business – has the potential as we can see with World of Warcraft to be a 50 per cent operating margin business. What used to be a low 20s return on invested capital business is now growing to a plus 40 per cent return on invested capital business.”
And he’s not just setting his sights on Guitar Hero and WoW fans. Talking about upcoming and expensive Activision titles such as Modern Warfare 2, Kotick said: “if it was left to me, I would raise the prices even further.”
Having fired these encouraging salvos at the gaming community, Kotick then switched his targets to console manufacturers, who he seems intent on putting out of business by “untethering” Activision games from other-party hardware. “I think what the untethered Guitar Hero does is equal the playing field a little more and give you some leverage with first parties when it comes to downloadable content and the business model.”
Maybe the choice quotes of the event, though, came when Kotick talked about Activision’s developers; you know, the guys who actually make the stuff he gets so rich from. You’d think he’d have a bit of respect for them, right? Oh no, Kotick’s goal over the past 10 years has been – you couldn’t make this up – “to take all the fun out of making video games.” How? By instilling a culture of “scepticism, pessimism, and fear” amongst the company’s staff based around the economic depression and an incentive program that rewards “profit and nothing else”.
We’re having a hard time coming to terms with all this. While we tend to expect mega rich corporate bosses to be at least a bit evil, this flagrant display of gamer hate has left us dumbfounded. Activision is a mammoth company, with some of the biggest-selling franchises in the world under its umbrella, but at the end of the day its profits come from the pockets of gamers who don’t want to miss out on some great titles. If any other CEO exhibited as much contempt for his or her customers as Kotick has, their company would surely expect to face negative feedback or even a consumer boycott. But you just know that nothing like that will happen here. Apart from running the negligible risk of a few blogs printing pictures of him with devil horns or a Hitler moustache, Kotick knows that he’s invulnerable. The gaming “community” just doesn’t have the will or the organisation to, say, boycott Modern Warfare 2, and that – even more than Kotick’s comments – makes us truly sad.
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Note: This article was written in September 2009
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