The Show Goes On • Page 2

Activision's dramatic slashing of non-performing IP makes some business sense - but the long-term impact looks grim.

Still, Activision has Call of Duty, even if the very public spat between Infinity Ward's founders and their publisher - followed by their dramatic return to Electronic Arts to set up shop and work on a new franchise - has implied worrying cracks in the blockbuster IP's foundations. The most recent instalment wasn't developed by Infinity Ward, though, and still did the kind of numbers that leave almost every other publisher in the industry green with envy. There's plenty of life in Call of Duty yet - although for how many more years the fickle public (who, let's not forget, couldn't get enough of Guitar Hero a few scant years ago) will continue to snap it up en masse every Christmas is impossible to predict.

Activision also has Blizzard - although it's always tempting to speculate about just how true that statement actually is. I have no direct insight into the personal relationships between executives at Activision and executives at Blizzard, and given the highly private nature of the latter company, I doubt many people outside its boardroom have any concept of just how Mike Morhaime and his fellow Blizzard luminaries actually regard Kotick and the rest of the Activision team. For all we know, the relationship could be entirely sunny - until we see evidence to the contrary, it's important to assume that that's the case.

Yet Blizzard has a long and cherished reputation for independence from its parent companies, and it's a goose that has laid so many golden eggs over the years that nobody seems foolish enough to try cutting it open and examining the workings. It's easy to imagine angry faces at Activision when it comes to Blizzard's refusal to lock down precise dates (or even years) for its releases, but aside from a little huff and puff, there's unlikely to be any real danger of blowing the house down.

Which begs the question - if Activision is happy to boil its catalogue down to Blizzard's games and a single FPS franchise, who is really wearing the trousers in this relationship? Kotick may be the boss of "Activision Blizzard", but his company is now a single franchise decline away from being "Blizzard (with a side-serving of Activision)". In the twilight days of Blizzard's last parent company, Vivendi Games, there was a sense among some external observers that Vivendi had become the corporate scaffolding that supported Blizzard ("they're our bank", a senior Blizzard staffer told me in a moment of candour some years ago), with the company's non-Blizzard titles being little more than glorified side-projects. Is history destined to repeat itself?

Perhaps not. After all, let's not forget that Activision's strategy doesn't actually preclude launching new franchises - and even if the company lacks the patience to nurture franchises, it certainly doesn't lack the funds or the will to buy them. The recent spate of closures and consolidations within the publisher have, in fact, led to some pretty bitter sentiments among developers who see the firm as essentially predatory - buying out studios, milking their IP and promptly getting rid of them as soon as they have served their original purpose.

It's by the success or failure of this strategy, I suspect, that Activision will stand or fall in the coming years - and on this point, I believe that there is trouble on the horizon for the industry's flag-bearer. The company's deal with Bungie, for example, is an interesting one. Bungie is an empowered, wealthy, confident developer with a world-beating franchise to its name - by no means prey for a company like Activision, which finds itself relegated to the role of publisher alone. It will reap the rewards of an alliance with Bungie, but not the kind of control of the IP it enjoyed with, for example, Infinity Ward.

Is that the character of all deals to come? No, of course not. Bungie is an exceptional case. But many other developers, watching this week's events and observing the gradual changes in the structure of the industry as a whole, will question whether they want to place themselves on the chopping block of firms like Activision. The company's millions will always make some developers waver - who doesn't want to be rich? - but there are other routes to market, other profit models and revenue streams, ways of reaching consumers and making money that simply didn't exist when Activision's business model (itself a near-direct copy of EA's former model) was at its height. On their next shopping sprees, traditional publishers may find talented studios more equipped than ever to resist the lure of the chequebook.

If you work in the games industry and want more views, and up-to-date news relevant to your business, read our sister website GamesIndustry.biz, where you can find this weekly editorial column as soon as it is posted.

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