Industry News: Mixed News For Activision

[Spalls Hurgenson]

So, it's mixed news for Activision.

On the plus side, "Call of Duty Modern Warfare II The Reboot Redux
version 2.0" is doing gangbusters, with fairly good reviews and over 1
billion dollars US in sales after its first ten days. This makes it
the best selling game in the franchise since the 2012 release of
"Black Ops II", so that's a pleasant resurgence for the title.

On the other hand... it's looking extremely iffy if the acquisition by
Microsoft will ever go through. That's not entirely bad news for
Activision, since if Microsoft can't pull it off, Activision is due a
$3 billion USD fee. Still, Activision has been mostly in a holding
pattern for the past year - as is common for companies about to be
acquired, so as not to rock the boat prior to completion of the sale -
and getting up to speed again might be costly. Plus, all those
lawsuits against the company won't be mooted out by the sale if
Microsoft doesn't take over.

And while Activision remains profitable, its earning have been
dropping quarter by quarter. It's net revenue for the latest quarter
was "only" $1.78 billion, compared to the $2.07 billion a year ago.
Stock earnings have been similarly affected. It's just not as strong a
company as it was a year ago. Without that deal, it might be hard for
it to get back on its feet.

Plus those pesky lawsuits just aren't going away, with further
accusations of union-busting tricks and various cruelty-to-employee
habits. Plus, Kotick got caught financing the political campaign of a
US election-denier and anti-abortionist, because of course he did.
You'd think that somebody earning that much money might know not to do
anything controversial until AFTER the sale is complete, but then
maybe - just maybe - CEOs aren't really worth those giant salaries?

Well, maybe Diablo IV will bring happiness to the House of Blizz. I'm
sure news of how it will be a live-service game will be well received
by its fans. No? Hmmm.

But at least Activision has all that Call of Duty money. $1 billlion
USD of sales is sure to lead to a lot of lootbox revenue...

[Werner P.]

Frankly spoken, Activision is pretty much the publisher I care least
about even less than EA, who brings out occasionally a game which I am
interested in. Activision while sitting disney like on top of a ton of
unused IP literally has no game anymore and did not have for a long time
I have any interest in. (as I said i dont care about war shooters and
less about Diablo lootbox style, there are so many really good
alternatives even for the click and slay style, I frankly also do not
care about)


Microsoft did not only want to buy Activision for COD but because of the
IPs they wanted to revive. They know that there is a ton of names in the
portfolion beneath the COD and Diablo names which have a high potential
but are basically rotting away.

So basically Activision getting bought by someone competent would be a
good thing in this case.

Man I just wished the original activision would roam its head once in a
while, the studio which brought us Pitfall, River Raid, Little Computer
people etc...

But EA started off innovative as hell as well before they struck gold
with their sports titles. (the rockstar game designer era when they
called themselves EOA)

[Spalls Hurgenson]

On Fri, 11 Nov 2022 07:46:56 +0100, "Werner P." <we...@gmx.at> wrote:

>Frankly spoken, Activision is pretty much the publisher I care least
>about even less than EA, who brings out occasionally a game which I am
>interested in. Activision while sitting disney like on top of a ton of
>unused IP literally has no game anymore and did not have for a long time
>I have any interest in. (as I said i dont care about war shooters and
>less about Diablo lootbox style, there are so many really good
>alternatives even for the click and slay style, I frankly also do not
>care about)

Oh, ditto. I don't buy Activision games. They aren't even on my
watchlist. Another "Call of Duty"? Yawn. I have twelve already. "World
of Warcraft"? You can get the same - or better! - experience from
free-to-play MMORPGs these days. Even were their corporate behavior
not enough to drive me away, they just don't have a compelling line-up
of games anymore, at least not for me. And it doesn't look as if
that's going to change any time in the near future. I've said it
before; as much a I bemoan the quality of Indie and small-publisher
games, at least they're creating innovative and interesting products
rather than rehashing the same old pabulum from ten years ago like the
triple-A developers.

>Microsoft did not only want to buy Activision for COD but because of the
>IPs they wanted to revive. They know that there is a ton of names in the
>portfolion beneath the COD and Diablo names which have a high potential
>but are basically rotting away.

While it's hard to say exactly why Microsoft is in the deal, it's much
more likely for Activision's mobile division than anything PC or
Console related. Those are nice bonuses for Microsoft, sure, but it's
the mobile division that is the real prize. Not only is it the source
of at least half of Activision's revenue, it fills in a gap in
Microsoft's own business.

(It reminds me of Electronic Art's acquisition of Origin. Most people
assumed it was solely for EA to gain control of Ultima, Wing
Commander, and the rest of their famous IPs... but EA was as much (or
possibly more) interested in Origin's sale team. In an era when many
games were still sold in small, single-owner game stores, a sales team
with connections to all those stores was worth their weight in gold
since they were the ones who could convince retailers to put your
games on their shelves. Too often the reason for these acquisitions
has less to do with customer-facing reasons, and more to do with
fixing business-management problems).

>So basically Activision getting bought by someone competent would be a
>good thing in this case.

That's for darn sure. Although its unlikely that we'd see immediate
change after the acquisition; it's rare and foolhardy to 'clean house'
of all the C-levels until after you have an understanding of how a
business works and have appropriate replacements in hand. And even
when Kotick and the rest are shuffled off the board, it's not like
they're leaving unrewarded. Still, seeing Kotick et al's back will be
welcome.

God, how did it ever come that we'd start seeing MICROSOFT as a savior
of PC gaming?!?

>Man I just wished the original activision would roam its head once in a
>while, the studio which brought us Pitfall, River Raid, Little Computer
>people etc...

Or even the Activision from the middle period (although many of those
IPs were acquired rather than invented in-house, I'd still like to see
their return). Games like "Heavy Gear", "Battlezone", "Zork", "Heretic
II", "Soldier of Fortune", "Gun", "Prototype" and "NASCAR".

>But EA started off innovative as hell as well before they struck gold
>with their sports titles. (the rockstar game designer era when they
>called themselves EOA)

"If it's in the game, it's in the game!" ;-)

I think EA's turning point was the hiring of Andrew Wilson, then as
Executive Producer to the FIFA games, and now the CEO of the whole
company. He almost singlehandedly championed the
microtransactions/lootboxes/etc. strategy that first took over FIFA,
then the other sport titles, and then became a prominent feature in
all of EA's games. Even under Ritocello - it's former CEO - EA was
showing some interest in diversifying its IP and creating games its
customers might like, but after Wilson took over it was all about
'online services' and sticking to tried-n-true franchises. His only
saving grace over Kotick is that he's not quite the asshole... at
least publically. Wilson - arguably - may not be as anti-employee,
anti-consumer as Kotick... but he's done little to advance the state
of the art of gamemaking, preferring instead to focus on
monetizations.

[Justisaur]

I'm thinking, what are you guys talking about? Diablo and WoW is Blizzard?!

I guess I'm 15 years behind the times, since that's how long ago they
bought Blizzard, and really explains their sharp drop into the cesspool.

> God, how did it ever come that we'd start seeing MICROSOFT as a savior
> of PC gaming?!?

It makes some sense, they want to keep people on windows. Games
are one way to do that. It is surprising they aren't screwing it up
though.

> >Man I just wished the original activision would roam its head once in a
> >while, the studio which brought us Pitfall, River Raid, Little Computer
>>people etc...

> Or even the Activision from the middle period (although many of those
> IPs were acquired rather than invented in-house, I'd still like to see
> their return). Games like "Heavy Gear", "Battlezone", "Zork", "Heretic
> II", "Soldier of Fortune", "Gun", "Prototype" and "NASCAR".

Meh to all of that too.

- Justisaur

[Spalls Hurgenson]

Heh. I sometimes forget people aren't as interested in industry
movements as I am.

I'm hesitant to blame the merger between Activision and Blizzard as
the start of their decline though. Then again, I've never put Blizzard
up on a pedestal either; I've never been the biggest fans of their
games. The original "Warcraft" was fun, but I felt they were
outclassed by the "Command & Conquer" games. I've a love-hate
relationship with "Diablo" I've often discussed here. "World of
Warcraft" left me cold. "Starcraft"? Just "Warcraft" with a sci-fi
skin, innit? None of them awful games, sure, but neither were they
anything that made me want to rush out and buy their games on Day One.

And the company very quickly started to rely on sequels and mission
packs rather than creating new stuff to boot. So - despite their
bewildering popularity - Blizzard never struck me as a significant to
moving the industry forward. They'd simply got lucky with some early
hits and were milking their good fortune since then. They were already
being criticized for this by the time the merger with Activision
occured.

Plus, a lot of the bad behavior from the C-levels and toxic behaviors
fostered amongst the lower rankers dates back to before the buy-out.
Activision is to blame for that only because they didn't stamp it out
(or consider it worthy of even investigating). But Blizzard was
problematic even before Kotick was involved.

>> God, how did it ever come that we'd start seeing MICROSOFT as a savior
>> of PC gaming?!?
>
>It makes some sense, they want to keep people on windows. Games
>are one way to do that. It is surprising they aren't screwing it up
>though.

I'm not sure that's so true anymore. Microsoft's long-term goal has
been changing to a software-a-service model, and Windows' dominance
has been more a tool towards achieving this than the goal itself. But
I think that Microsoft wouldn't be too upset if, ultimately, it
transferred its services to a completely digital/online experience
regardless of the underlying OS. That's not to say they're willing to
give up on Windows yet - they haven't made their online services
essential to everyone yet - but Microsoft's actions have indicated
that "Windows" isn't the company's overriding driver the way it was
ten or fifteen years ago.

>> >Man I just wished the original activision would roam its head once in a
>> >while, the studio which brought us Pitfall, River Raid, Little Computer
>>>people etc...

>> Or even the Activision from the middle period (although many of those
>> IPs were acquired rather than invented in-house, I'd still like to see
>> their return). Games like "Heavy Gear", "Battlezone", "Zork", "Heretic
>> II", "Soldier of Fortune", "Gun", "Prototype" and "NASCAR".

>Meh to all of that too.

Meh to Zork? Blasphemy! Where's my pitchfork?!?!

[Justisaur]

On Friday, November 11, 2022 at 2:57:54 PM UTC-8, Spalls Hurgenson wrote:
> On Fri, 11 Nov 2022 07:39:47 -0800 (PST), Justisaur

> >> Or even the Activision from the middle period (although many of those
> >> IPs were acquired rather than invented in-house, I'd still like to see
> >> their return). Games like "Heavy Gear", "Battlezone", "Zork", "Heretic
> >> II", "Soldier of Fortune", "Gun", "Prototype" and "NASCAR".
>
> >Meh to all of that too.
> Meh to Zork? Blasphemy! Where's my pitchfork?!?!

Yeah, never much cared for the text adventures. All I can say is that Zork
is my least hated of them. I never owned it, just played briefly at a friend's
house.

I did forget Battlezone though, that's was an awesome arcade game. Oh wait,
that was Atari.

- Justisaur

[Mike S.]

On Fri, 11 Nov 2022 17:57:37 -0500, Spalls Hurgenson
<spallsh...@gmail.com> wrote:

>Meh to Zork? Blasphemy! Where's my pitchfork?!?!

Zork 1, Zork 2, Zork 3, Beyond Zork, Zork Zero, Return to Zork... did
I miss any?

I agree with Justisaur. Meh to Zork.

[Mike S.]

On Fri, 11 Nov 2022 22:01:42 -0500, Mike S. <Mik...@nowhere.com>
wrote:

>Zork 1, Zork 2, Zork 3, Beyond Zork, Zork Zero, Return to Zork... did
>I miss any?

Yes, I did.

Zork Nemesis and Zork Grand Inquisitor.

Seriously, meh to Zork.

[Spalls Hurgenson]

On Mon, 07 Nov 2022 19:17:26 -0500, Spalls Hurgenson
<spallsh...@gmail.com> wrote:

>So, it's mixed news for Activision.

Another couple of weeks, and it looks even more unlikely that the
merger is going through. Before, the deal was under intense scrutiny
by EU regulators; now, the United States federal trade commision seems
likely to block the merger too*.

It will be interesting to see what will happen if (when) the merger is
blocked. Obviously there will be the usual rounds of suits and
counter-suits, but assuming Microsoft's acquisition of ActiBlizz is
blocked, what's next? Microsoft won't care; they're sitting pretty and
just want the deal to shortcut their way into mobile gaming. But
Activision-Blizzard has been largely in a holding pattern since the
talks began; no new IPs, really nothing fresh on the table in over a
year beyond the usual (if profitable) sequels to Call of Duty and the
like. Meanwhile, its competitors have been pushing ahead - with new
properties, new streaming and subscription services, their own
acquisitions - while Activision has been running in place.

The company won't go collapse - World of Warcraft and Call of Duty
alone will assure that - but it'll be all that much harder to stay
competitive with the likes of Ubisoft, EA, and the rest. Throw in all
the pending lawsuits - none of which might be mooted if the merger is
blocked - and Activision looks vulnerable. Perhaps they'll divest some
of their properties? Or is another merger with somebody else in the
offing?

And will nobody rid us of this troublesome Kotick?


========================
* details here:
https://www.politico.com/news/2022/11/23/exclusive-feds-likely-to-challenge-microsofts-69-billion-activision-takeover-00070787

[Ross Ridge]

Spalls Hurgenson <spallsh...@gmail.com> wrote:
>It will be interesting to see what will happen if (when) the merger is
>blocked. Obviously there will be the usual rounds of suits and
>counter-suits, but assuming Microsoft's acquisition of ActiBlizz is
>blocked, what's next?

I don't think it's likely that the merger will fail, at least not on
it's merits. The assumption of a lot people in the video game world is
that it will, but they're not really looking at from the perspective of a
competition regulator. Regulators are evalutating what effect this deal
will have on competition in their own domestic markets. For example,
they don't really care if a Japanese company is hurt by the merger.
So long as it's not a fatal blow to Sony, say if it causes Microsoft and
Sony to switch places in the console sales rankings, it's not going to
have a big effect on consumers.

What is looking is more likely to kill the deal is the US FTC filing an
injuction against the merger, putting it on hold until a case can be heard
in their own administrative court. That case likely won't be over by
the contractual deadline for closing the merger, and so would scuttle it
without the court actually coming to a decision. Potentially Microsoft
and Activision could come to an agreement to extend the deadline, but
it would essentially mean renogiating the deal from scratch.

The only real question about Activision Blizard's future if the merger
does fail is what happens to Bobby Kotick. He was planning to leave
the company after the merger, perhaps either to retire or to start a new
venture, and may still want to. He wouldn't get the same generous terms
if he voluntary resigns as he would've gotten if the merger went through,
but maybe he could engineer his own ouster.

The company itself will just continue on. I can't see anyone in a
position to acquire Activision being able to pass the regulatory hurdles
if Microsoft can't. Microsoft was one of the few companies in the
video game business that could acquire Activision in a all-cash deal.
Sony and Tencent presumably could also do this, but would have an
even harder time getting regulatory approval. A merger with another
similarily large video game publisher (Embracer or Electronic Arts?),
paid with a much less attractive stock-swap, would have an even bigger
and more obvious negative effect on competition.

Activsion is very profitable and is not even close to being "vulnerable".
That's just another assumption of people in the video game communitiy
because of all the bad news the company has received. The lawsuits will
be dealt with in one way or another and even they go badly won't have big
effect on the company's bottom line. Activision doesn't need a saviour,
and that isn't what the deal with Microsoft is about. It's just about
Microsoft finally becoming a major video game publisher and having to
pay Activision Blizzard sharesholders a ton of money to do so.

--
l/ // Ross Ridge -- The Great HTMU
[oo][oo] rri...@csclub.uwaterloo.ca
-()-/()/ http://www.csclub.uwaterloo.ca:11068/
db //

[Spalls Hurgenson]

On Fri, 2 Dec 2022 17:33:51 -0000 (UTC), rri...@csclub.uwaterloo.ca
(Ross Ridge) wrote:


>Activsion is very profitable and is not even close to being "vulnerable".
>That's just another assumption of people in the video game communitiy
>because of all the bad news the company has received. The lawsuits will
>be dealt with in one way or another and even they go badly won't have big
>effect on the company's bottom line. Activision doesn't need a saviour,
>and that isn't what the deal with Microsoft is about. It's just about
>Microsoft finally becoming a major video game publisher and having to
>pay Activision Blizzard sharesholders a ton of money to do so.

I agree; Activision isn't vulnerable in the sense that it will
disappear, or that it needs a merger to survive. But it has been
treading water for over a year, as is common with companies awaiting a
potential merger (you don't want to disrupt the status quo with risky
moves that significantly alter - or are perceived to alter - the value
of the company).

If the acquisition does not go through, it will have to jumpstart its
operations, pushing new IPs and operations that have been on hold for
the past twelve months. And until those new ventures come into
fruition, the company will not be falling behind its more active
competitors. This adds risk that will hamper its ability to take on
new investors or loans. Again, it won't kill the company but it could
well push the company out from the forefront of the industry.

(if the acquisition does go through, Microsoft will also have to
jumpstart its new property, but that's less of an issue for the
Seattle behemoth, especially since it's mostly interested in using
Activision for its mobile gaming assets

And its looming lawsuits and labor problems are an issue, even if they
don't directly affect revenue. They affect stock value, they make
investors nervous, they affect employee morale, they affect customer
trust, they attract further government scrutiny. The downsides of
these have - so far - been largely minimized because it was assumed
that many of these problems would be mooted by the new ownership, but
if the acquisition falls through, Activision will have to finally face
up to them.

Whether the regulators allow the sale to go through or not - and
between the FTC and EU looking askance at the deal, it is looking
increasingly uncertain - Activision isn't going to disappear. But
until there is an answer to that question, the company is in a sort of
limbo where it can't really resolve any of its issues.

[JAB]

Activision make new IP's?