Activision: Game Industry Becoming Blockbuster or Bust

During today’s Activision earnings call, the largest third party publisher in North America and Europe dropped a number of bombshells, including the death-like coma of the Guitar Hero franchise, the cancellation of True Crime: Hong Kong, and the likely no-show of a new Blizzard title this year. However, between these larger stories Activision made a number of other announcements as well as some observations on the larger state of the game publishing industry.

Activision sees the Xbox 360 and PS3 posting big numbers this year.

Activision-Blizzard’s earnings forecast for this year factor in a more than 20 percent increase in “online-enabled console” install bases for the year, which they expect will in turn result in increased Call of Duty sales when the expected Modern Warfare 3 — developed in conjunction with Infinity Ward, Sledgehammer Games, and Raven — launches this fall. There was no mention as to whether this is because of price drops on existing hardware or increased demand due to products like Kinect or Move.

Peripheral based games were not profitable for Activision in 2010.

In a somewhat unsurprising statement given the earlier announcement of Guitar Hero’s end, Activision nonetheless emphasized that not only did series such as Tony Hawk and Guitar Hero fail to meet expectations in 2010, they did not reach profitability. This would explain why Activision took such drastic measures in ending both series rather than trying to radically reinvent them, the route they’ve tried over the last two years with Tony Hawk: Ride and Shred, and Guitar Hero 5 and Warriors of Rock and the more casual friendly Band Hero.

Retail is still king for World of Warcraft.

While digital portals like Steam are rapidly becoming the destination of choice for PC game purchases, and Blizzard launched their WoW expansion Cataclysm simultaneously through their store and at retail, most WoW players still buy the game and its add-ons at brick and mortar retailers. Blizzard president Mike Morhaime refused to provide specific percentages, but stated that stores constitute “the lion’s share of our sales.”

There will be another Spider-Man game from Activision this year.

While the Spider-Man film franchise reboot won’t hit theaters until next year, Activision will nonetheless put out another Spider-Man game this year. This is in spite of the weak sales of last year’s well-reviewed Spider-Man: Shattered Dimensions.

The games market is becoming blockbuster or bust.

Mirroring comments made by Take-Two Interactive’s (the parent company of 2K Studios) Strauss Zelnick last year, Activision bemoaned the plight of lower profile games. “Sales of mid-tier titles are being squeezed out,” according to the publisher, as non-triple A and non-hardcore titles significantly underperformed sales expectations. This is likely in reference to a number of sales duds published by Activision last year, including Bizarre Creation’s Blur, Raven Software’s Singularity, and High Moon’s Transformers: War for Cybertron, among others.

via: IGN

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