Speaking at an investor meeting, Activision CEO Bobby Kotick has said that he thinks it would take an investment of half a billion to a billion dollars to take on World of Warcraft - and even then, success isn't guaranteed.
"We don't think that even if we made the USD 500 million or billion-dollar investment to get a product out [to compete with WOW] that we would even be successful doing it," he said.
If you can't beat them, join them - hence the recent merger of Activision and WOW owners Vivendi, creating Activision Blizzard.
"When we first started looking at it, it appeared to us like a game in an insurmountable product category... EA, Microsoft, Sony and scores of venture capital investments had been put to work unsuccessfully in trying to develop massively multiplayer games as a product opportunity," Kotick said.
"When you... Look at all the money that's already gone to these businesses that have failed, there didn't seem a likelihood that even a well-managed company like Activision would have the prospect for profit any time soon in this category."
Kotick also paid tribute to the talent at WOW developers Blizzard. "They have a model that is very well-developed, they have a very keen understanding of their audiences, and they're just scratching the surface of opportunity in a lot of areas... These guys are among the best in the world of game development."
Kotick was speaking at the Goldman Sachs Technology Investment Symposium 2008 Conference on Tuesday this week.