Activision: Social and Casual Games Don't Make Money

[Greg Tito]

Activision: Social and Casual Games Don't Make Money

Activision CEO Bobby Kotick is not investing heavily in social games or casual markets like Apple's App Store.

Remember the halcyon days of early 2010 when social and casual games were the buzzwords on every videogame executive's lips? The 2010 Game Developers Conference had a separate conclave for social games and FarmVille developer Zynga seemed to be in every headline. While it seems that EA and other outfits like Disney Interactive Studios are still invested in social games, Activision's Bobby Kotick is pulling out. At a media summit in New York City yesterday, Kotick said that he didn't think social games offered a substantial profit for his company, as opposed to key franchises like Call of Duty.

"The place where you have the opportunities for growth is within the communities of franchises we control," Kotick said.

Also, the games that you might play on smartphones or tablets like the iPad are not huge growth markets for Activision. "We don't view the App Store as a really big opportunity for dedicated games," Kotick said.

Sure, a lot of people play these games, Kotick admitted, but he just doesn't see a way to monetize social games to adequately justify the investment. "It's a different question assessing it as a business opportunity. Right now we don't see an opportunity for us to participate in that market," he said.

There are a lot of reasons for Activision to stay out of social games, but none for them to try to break into the market. With CODBlops and WoW making money hats for Bobby Kotick and Activision Blizzard, it's clear that spending more money on developing its major franchises will net them the most profit in the end. The other option would be to buy a startup, or to shift gears into social and casual games for a much smaller profit margin. Why mess with what works?

Source: Reuters [http://ca.news.yahoo.com/s/reuters/101201/tecnology/ctech_us_media_summit_activision]

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[DazBurger]

Ehh... I am... I... I'm actually okay with this... Is there something wrong with me?

Ain't I suppose to be enraged by Kotick's comments?.. IS THERE SOMETHING WRONG WITH ME!?

 

[Megacherv]

To Bobby: For once I'm gonna disagree with you, but not because I hate you, because I just think you're wrong.

Today me and my friend saw some cards in Game that weren't disimilar to PSN cards or MS Points cards. They were cards for Farmville, Frontierville, Runescape, Mafia Wars, and cards for general facebook credits

These are sad times indeed.

 

[LavaLampBamboo]

Facebook COD perhaps?

"Steve has just quickscoped you! Would you like to swear in response?"

 

[JaredXE]

"The place where you have the opportunities for growth is within the communities of franchises we control," Kotick said.

That's not growth Bobby, that's stagnation and the ritualistic beating of a dead equine.

Casual game ARE money makers and growth opportunities, however you WON'T make as much as a triple A title will. You also won't SPEND as much as a triple A title either.

 

[Nico4]

Still won't stop him from doing a Call of Duty application or facebook game. As for not making any money on it, well they do, but given the low price, it's not a lot, so they need way better sales than all the others, something which due to the low price is possible. That's how things are now, but I wouldn't be surprised if the prices (and game quailty) increase. It's pretty popular and it can only get more popular, so I'd better come up with a plan on how to battle a future world game domination by Apple scenario.

 

[josh797]

Kotick has once again proved his idiocy. social and and casual are absolutely huge these days. did you know that angry birds for the iphone has made so much money that they are doing events this month? the iphone has more games made than any other type of app, and more are on the top money making apps list than any other app. kotick is clearly not the CEO you want running your company activision. kick his ass to the curb.

 

[Super Jamz]

Yet another insight into the money making GENIUS of Bobby Kotick.

I guess he's just been pretending the Wii hasn't existed for the past 5 years.

 

[newwiseman]

They don't need to do social games, instead invest in dev teams that will actually finish games before I need to upgrade my computer again.

Or maybe hire someone whos sole responsibility is to track a projects progress then make a release announcement for a date they know will be met, not make an announcement then move the date by 3-6 months at a time for 3+years...

 

[Ultra_Caboose]

Ehh... I am... I... I'm actually okay with this... Is there something wrong with me?

Ain't I suppose to be enraged by Kotick's comments?.. IS THERE SOMETHING WRONG WITH ME!?

This is my thoughts exactly. I'm almost always aggravated with whatever words Kotick launches out of his face, but this actually seems reasonable.

Still, it's not too much of a risk for them to at least put a couple of small teams working on casual games. Activision's making about seven or eight shitloads of money every year, so an experimental foray into casual gaming can't do any real harm...

 

[Unrulyhandbag]

Nothing really wrong with staying out of the business but it sounds like he just thinks 'casual' games will hurt his brand and are beneath him. There is money in casual gaming and several companies are proving that, the rest go bankrupt pretty sharpish but Activision can dip in at fairly low risk with their main business bank rolling it.

How about doing cheapo casual games and use them as an advertising platform for middling or Indy style games and use those to push the 'hardcore' AA games.
That way you catch every variety of gamer, make money at every level and increase interest in your big budget market.

Of course it would mean a restructure of the company and bringing in people good at working on low budgets so it's clearly better to keep the staus quo and ignore the lesser market, right/

 

[Quaidis]

This is just Kotick telling people that he has every intention of driving Activision into a realm of absolute stagnation. Which, on the by, is old news. Man will he be surprised when CODXIII is hated by all and the company takes a tail spin.

Tell Nintendo that casual and social games don't sell. They'll laugh all the way to the porcelain throne, where they'll wipe their asses with gold leaves. Then leave via ninja teleportation to join their friends at the 'giant battle robot yachts' club while printing money in their sleep.

 

[The Great JT]

Kotick, you are wrong. There is a market for casual and social games. Think of them as gateway drugs to the more hardcore stuff.

Or maybe you think that because you can't just stamp out sequels and wring money out of people like the greedy assminer you are.

 

[Sixties Spidey]

Says the man who owns the company with Call of Duty iPhone apps. Again, shut the fuck up Kotick.

 

[KEM10]

Ehh... I am... I... I'm actually okay with this... Is there something wrong with me?

Ain't I suppose to be enraged by Kotick's comments?.. IS THERE SOMETHING WRONG WITH ME!?

You didn't read the article fully. He isn't giving up on casual games because they don't make money, he's giving up on them cause HE can't make money. It is basically saying that he will stick with CoD and other "favorites" and do nothing more cause he truly is a one trick pony and doesn't like to take risks.

Ok, two trick pony. But the other is buying game companies and squeezing the life out of them.

 

[Loonerinoes]

Why mess with what works?

Because nothing lasts forever. Every franchise goes down the drain or ends someday (except perhaps Star Wars) and things like profits of social games keep you afloat until you're ready to start up the next.

 

[PhiMed]

I guess his issue with social and casual gaming is that the only games that make money are those which innovate. Activision has proven again and again that it is completely incapable of innovation.

Farmville may be shit, but it's a cash cow. There are other games that are similarly massively profitable. Thing is, though, that none of the profitable games are like the other profitable games. In other words, you can't charge someone 5 times for the same damn product. For the past decade, that's all Activision is capable of doing: Buying an existing ip and re-releasing it over and over again with a number or a subtitle.

So he's right: It doesn't fit their business model.

6 Guitar Hero games in 5 years? Okay.
4 Call of Duty games in 3 years? That works.
Farmville 2, with no substantive changes in the mechanics? I don't think so.