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'Little risk of failure': Analysts predict SWTOR will turn a healthy profit

Justin Olivetti — Thu, 01 Dec 2011 10:30:00 EST

Filed under: Sci-fi, MMO industry, Star Wars: The Old Republic

Worried that Bobby Kotick has the right of things and that Star Wars: The Old Republic won't make bank for Electronic Arts? Market analyst Michael Pachter disagrees, saying that he not only predicts that EA will cover the costs of SWTOR's development, but come out just fine even with LucasArts taking its share.

Pachter says that LucasArts will claim 35% of SWTOR's revenue: "The revenue split is around 35 percent to LucasArts after EA earns back their investment. That means EA keeps most of the revenue from disc sales (they have marketing expenses and need to staff up the server farms), so they should earn a nice profit there. Keep in mind that EA expensed the development cost when incurred, so much of the disc sales revenue will be profit."

Pachter's predictions for the title are sizable yet reasonable; he thinks that SWTOR will get 1.5 million subscribers. This translates to $270 million per year in revenue, $80 million of which will be pure profit for EA after LucasArts and operating costs take their share. Even if SWTOR only draws in -- or sustains -- merely 500,000 subscribers, Pachter says the game will be sitting pretty.

Other market analysts, such as EEDAR VP Jesse Divnich, support the notion of SWTOR's profitability. "Based upon user commentary and consumer surveys, the profit potential for The Old Republic is high. We see little risk of failure for The Old Republic," Divnich stated.

'Little risk of failure': Analysts predict SWTOR will turn a healthy profit originally appeared on Massively on Thu, 01 Dec 2011 10:30:00 EST. Please see our terms for use of feeds.

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Kotick questions how SWTOR will benefit EA

Jef Reahard — Tue, 29 Nov 2011 11:30:00 EST

Filed under: Sci-fi, MMO industry, New titles, News items, Star Wars: The Old Republic

Count Activision CEO Bobby Kotick among the doubters when it comes to the financial viability of Star Wars: The Old Republic. The controversial executive mentioned the upcoming MMO in a speech at yesterday's Reuters Media Summit talk, during which he said he's unclear what publisher Electronic Arts stands to gain from the game.

"Lucas is going to be the principal beneficiary of the success of Star Wars," Kotick posited. "We've been in business with Lucas for a long time and the economics will always accrue to the benefit of Lucas, so I don't really understand how the economics work for Electronic Arts."

Kotick went on to say that the odds are stacked against new investors in the massively multiplayer market. "If you look at the history of the people investing in an MMO and achieving success, it's a small number," he said.

Kotick questions how SWTOR will benefit EA originally appeared on Massively on Tue, 29 Nov 2011 11:30:00 EST. Please see our terms for use of feeds.

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Activision Blizzard loses 1.1 million WoW players since May, triples profits

Justin Olivetti — Tue, 08 Nov 2011 17:40:00 EST

Filed under: World of Warcraft, Fantasy, Economy, MMO industry, Miscellaneous

Today's investor call with Activision Blizzard was a rollercoaster of news for MMO fans, with both good and bad news coming forth.

Starting with the bad -- everyone asks to start with the bad news, don't they? -- World of Warcraft's subscriber numbers are much lower than they were this past May. The company reports that subscriptions have dropped from 11.4 million in May to 11.1 million in June to 10.3 million, representing a loss of 10% of the playerbase. These numbers represent the total worldwide, and Blizzard CEO Mike Morhaime said that most of the losses were suffered in the eastern market. No matter where the losses come from, this continues the downward trend of the title during the past year. Blizzard declined to provide a subscriber forecast for the next quarter.

The good news is that the company has whooped expectations by nearly tripling its profit for the quarter over this time last year. During this past quarter, Activision Blizzard raked in $627 million worth of sales, of which $148 million is pure profit. A majority of the revenue -- 62% -- comes from its digital sales.

The company expects 2012 to be even better, with titles like Diablo III and another Call of Duty in the works. CEO Bobby Kotick is nothing if not confident in the company's future: "I believe our unyielding commitment to excellence and our creative talent around the globe will continue to position Activision Blizzard as the leader in interactive entertainment."

Activision Blizzard loses 1.1 million WoW players since May, triples profits originally appeared on Massively on Tue, 08 Nov 2011 17:40:00 EST. Please see our terms for use of feeds.

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GamersFirst welcomes World of Warcraft to 'the free-to-play revolution'

Justin Olivetti — Wed, 29 Jun 2011 10:30:00 EST

Filed under: World of Warcraft, Fallen Earth, News items, Free-to-play, All Points Bulletin, Miscellaneous

Sarcastic, genuine, or merely self-promoting? An open letter from GamersFirst's Joshua Hong to Activision-Blizzard's Bobby Kotick following World of Warcraft's surprise move to an indefinite free trial could be all three. "I wanted to congratulate you on taking your first big step to join the Free2Play(R) revolution," Hong writes.

He certainly isn't shy in expressing what he sees as GamersFirst's great accomplishments in the market: "Having created this market in the western hemisphere, it's very encouraging for us to see the last bastion of the subscription-only online gaming business joining the Free2Play movement... Given our recent success in reviving APB Reloaded, which launched as a subscription-based game we transitioned to Free2Play, we know that the first steps are often the hardest. But the proof is in the metrics, as APB now has more than three times the active player base than when it initially launched as a subscription product. We also plan to repeat this success with Fallen Earth."

Hong continues the letter by "extending [his] friendship and support" to Blizzard, inviting Kotick to the free-to-play party at Gamescom, and hoping that the company's entire library will be made free in the future.

GamersFirst welcomes World of Warcraft to 'the free-to-play revolution' originally appeared on Massively on Wed, 29 Jun 2011 10:30:00 EST. Please see our terms for use of feeds.

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Bobby Kotick muses about a Call of Duty MMO

Justin Olivetti — Tue, 22 Jun 2010 11:30:00 EST

Filed under: MMOFPS, Rumors

Activision Blizzard owns one of the most profitable gaming franchises in the world with Call of Duty, and Bobby Kotick knows it. In a recent interview with the Wall Street Journal, Kotick was open about his ambitions with the series, saying that he wishes that they would create an online subscriber version. It's not a new sentiment from Kotick, as he's been saying as such for years, although it certainly is pretty straight-forward.

Kotick threw a few logs onto the fire of speculation: "I would have Call of Duty be an online subscription service tomorrow. I think our audiences are clamouring for it. If you look at what they're playing on Xbox Live today, we've had 1.7 billion hours of multiplayer play on Live. I think we could do a lot more to really satisfy the interests of the customers. I think we could create so many things, and make the game even more fun to play."

No stranger to controversial statements, it's hard to tell if Activision Blizzard's CEO was just shooting the breeze or hinting at an upcoming title from the publisher. In any case, a Call of Duty MMO would be major news indeed if it happened, so we'll be sure to keep our eyes on Activision -- and our ears on Kotick for any possible confirmation.

[Via Eurogamer]

Bobby Kotick muses about a Call of Duty MMO originally appeared on Massively on Tue, 22 Jun 2010 11:30:00 EST. Please see our terms for use of feeds.

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Acti-Blizz restructuring, assigns new executive to Blizzard

Jef Reahard — Wed, 31 Mar 2010 17:30:00 EST

Filed under: World of Warcraft, Fantasy, MMO industry, News items

The Los Angeles Times reports that Activision-Blizzard has undergone a significant internal reorganization and elected not to notify investors or the public. The changes were circulated in an inter-company memo obtained by the newspaper and later confirmed by a company spokesperson.

The new company map features one business unit focused squarely on the Call of Duty franchise, another overseeing Activision-owned brands such as Tony Hawk and Guitar Hero, and a third unit to handle licensed properties. Blizzard Entertainment rounds out the fourth unit but interestingly, Blizzard's Mike Morhaime now reports directly to newly appointed chief operating officer Thomas Tippl, who in turn reports to Activision CEO Bobby Kotick.

"This is an important change as it will allow me, with Thomas, to become more deeply involved in areas of the business where I believe we can capture great potential and opportunity," Kotick said in the employee memo.

Check out the original article from the L.A. Times.

[Correction: Activision-Blizzard has two primary divisions, Activision Publishing and Blizzard Entertainment. The Activision Publishing arm has reorganized into three separate business units.]

Acti-Blizz restructuring, assigns new executive to Blizzard originally appeared on Massively on Wed, 31 Mar 2010 17:30:00 EST. Please see our terms for use of feeds.

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Activision Blizzard's CEO is a funpire

Kyle Horner — Thu, 17 Sep 2009 09:30:00 EST

Filed under: World of Warcraft, MMO industry, News items

Bobby Kotick isn't just the CEO of Activision Blizzard. He's also the CEO of Activision Blizzard who recently said, "You have studio heads who five years ago didn't know the difference between a balance sheet and a bed sheet who are now arguing allocations in our CFO's office pretty regularly," Then again, as Ars Technica has pointed out, his incentive program that, "rewards profit and nothing else." may have something to do with that.

That's not all Bobby Kotick recently said, however. He's also known for this uplifting little diddy, "We have a real culture of thrift. The goal that I had in bringing a lot of the packaged goods folks into Activision about 10 years ago was to take all the fun out of making video games." Now that quote may be out of context, but what kind of context can make that look... well, good or even mildly acceptable?

Something smacks of bad omens here. Sure, things are going good right now for the company that puts out Blizzard games and Call of Duty, but when a company's Chief Executive Officer is saying things like, "We are very good at keeping people focused on the deep depression," it may be time to double-check your neck for bite marks and then get the hell out of Irvine.

Activision Blizzard's CEO is a funpire originally appeared on Massively on Thu, 17 Sep 2009 09:30:00 EST. Please see our terms for use of feeds.

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Activision CEO: Blizzard merger best way to enter industry

Samuel Axon — Thu, 29 May 2008 21:30:00 EST

Filed under: World of Warcraft, Fantasy, Interviews, MMO industry, News items

Activision CEO Bobby Kotick told Gamasutra that his company explored avenues by which it might enter the MMO industry, but decided that the only sure way to succeed was to join forces with Blizzard.

That reality was a driving force behind the merger. "We kept looking at it, and realizing that even if we put hundreds of millions of dollars of capital towards it, and had the very best intellectual property, we still would very likely be unsuccessful," he said. "So the merger was really our mechanism to get access to Blizzard's talent, Blizzard's capability, their infrastructure."

Kotick has already said in the past that taking on World of Warcraft directly would be next-to-impossible even with virtually unlimited coffers. But others, such as EA Mythic's Mark jacobs, believe there's room for more than one 800 pound gorilla in the market. Perhaps the problem isn't so much competition as it is the fact that the production values bar has been set so high that MMOs have become too risky. They cost more to produce than most other games, and their success rate is uninspiring.

Activision CEO: Blizzard merger best way to enter industry originally appeared on Massively on Thu, 29 May 2008 21:30:00 EST. Please see our terms for use of feeds.

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Activision exec discusses Call of Duty MMO

Chris Chester — Wed, 05 Mar 2008 10:00:00 EST

Filed under: Business models, Interviews, MMO industry, New titles, War, MMOFPS

In a discussion with investors yesterday, Actvision CEO Bobby Kotick mentioned how the soon-to-be-formalized merger with Vivendi Universal would give the new company the ability to leverage their properties in ways that were never before possible. Specifically, he mentioned how Activision could conceivably tap into the technical and creative expertise of Blizzard in developing the Call of Duty franchise into an MMO. This follows on the heels of another recent comment he made in public recently about Activision's research into the MMO space, and their perception of the considerably monetary barriers to entry.

While nothing about Kotick's comments seemed to indicate that a Call of Duty MMO was actually in development, it's still an interesting prospect to think about. Call of Duty 4, which is currently the most actively played game on Xbox Live, actually contains a number of gameplay elements reminiscent of an online RPG. There are classes, various skills and challenges to grind, and a persistent experience gain. It really wouldn't be much of a stretch to imagine Call of Duty in an MMO context, or at the very least, containing even more elements from the genre to grab players and keep them coming back. But the very prospect of a collaboration between Infinity Ward and Blizzard is almost simply too much for my geek brain to handle, so for my sanity I'm just going to have to assume this was all executive-speak, and such a game will never happen.

Activision exec discusses Call of Duty MMO originally appeared on Massively on Wed, 05 Mar 2008 10:00:00 EST. Please see our terms for use of feeds.

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Investment of $1 billion+ wouldn't dethrone WoW, exec says

Chris Chester — Thu, 28 Feb 2008 13:30:00 EST

Filed under: World of Warcraft, Business models, MMO industry

We all know that World of Warcraft is the big daddy on the MMO block. Hell, with the amount of money Blizzard is raking in, World of Warcraft is the big daddy on the gaming block. And what's more, it's still growing. According a report, Activision CEO Bobby Kotick stated in an investor meeting that his company had done extensive research on the MMO category, and came to the conclusion that even a game bolstered by an initial investment of $500 million to $1 billion would still probably have a hell of a time competing in the same space as the Blizzard juggernaut. This likely came as part of their research prior to the massive merger with Vivendi Universal late last year.

Kotick points to the relative failures of big companies like Microsoft in trying to develop a competitive product as proof in the pudding. Even companies with decades-long track records of extracting money from lose-lose situations don't stand to gain much from trying to directly compete in the same space. For his part, Kotick believes it's the ingenuity of the guys at Blizzard that is really the deciding factor. Since no amount of money is liable to recreate the success of Blizzard, they simply found the prospect of buying them out more amenable. If you're wondering why it seems like so many MMO development houses are scaling down their products to make them more niche oriented, this is why. Throwing money, even a billion dollars, into a competition with World of Warcraft is only likely to end in tears.

Investment of $1 billion+ wouldn't dethrone WoW, exec says originally appeared on Massively on Thu, 28 Feb 2008 13:30:00 EST. Please see our terms for use of feeds.

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