Activision Blizzard turns to internet sales for future

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How much does the Internet influence the way games are made and sold? The answer is a lot.

On Wednesday, in the first-quarter fiscal earning reports, Activision Blizzard – the company behind the popular military shooter franchise, Call of Duty, and the fantasy game, World of Warcraft – said despite drop in both sales and profits, they are following a plan to shift sales to the Internet. Which in effect may bring them in more money, since for every $4 made, $3 were made on Internet sales.

“The transition to digital continues to drive our business,” said Activision CEO Bobby Kotick during a conference call Wednesday.

Destiny, a space-age shooting game, and Hearthstone: Heroes of Warcraft—a digital card game based off the popular MMORPG World of Warcraft – have accumulated more than 50 million registered users and are now responsible for more than 1 billion dollars in sales, says Activision of its new games.

Hearthstone, playable on tablets as well as smartphones, is offered as a free download but makes its money by charging for upgrades and additional items over time. Destiny, by design, gets players to spend money over the next ten years of its development by offering additional storylines and other items. On average, Destiny’s player base clocks in around three hours of playtime a day.

The 11-year-old World of Warcraft game is one of Activision’s best-known and longest-running active games. Of course, the executives have seen the value in creating titles of all varieties, which operate less like simple copies of games burned onto discs and have short play value, but rather transitioned to living titles that allow expansions to be regular and updated over time.

Thus far, it seems it has been the right choice and is paying off heavily. Activision said 76 percent, or $538 million, of its total revenue has come from sales over the Internet of full-game downloads and add-ons that can be purchased in-game.

Of course Activision has taken a dramatic shift and followed in the footsteps of an industry trend, like other large game makers: Electronic Arts and Take-Two Interactives (both of whom have seen consistent boosts in salves over the Internet in recent quarters). Companies who make the shift are beginning to see the widespread success that is less of a matter of selling more units than your competitor sells, but rather how to get a player to play a single title for longer – and how to get them to spend both virtual world money and real money.

Activision is also applying what it has learned about the Internet to help sales for those games which are stretched out over a length of time, such as Call of Duty. Being released last fall, Call of Duty: Advanced Warfare continues to the best-selling game for the newer generation of game console hardware. Although, that doesn’t scream an achievement for a Call of Duty game. More importantly, Activision says, is a double-digit percent jump in sales for the title when you count in the Advanced Warfare’s new payment system that allows players to spend small sums of money for in-game items.

Having already announced its next Call of Duty game, Black Ops 3, Activision is planning a new title Overwatch, which will open up to players in an early beta format this fall (hopefully). This new title will incorporate elements from the previously cancelled World of Warcraft successor, codenamed project Titan.

Despite still having 7 million paying subscribers, World of Warcraft has seen a steady fall in its player base over the years, thus Activision is in need of a new hit multiplayer game that can sustain itself for a decade – or more.

Looking towards the future, Activision is planning to revive the once-popular Guitar Hero franchise. (I hear a mixture of groans and cheers). With Guitar Hero Live, Activision is looking to revive a genre that rose to the top of pop culture prominence seemingly overnight nearly a decade ago, before crashing around 2009.

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Loren Mc Clain
Loren Mc Clain 47 posts

Heroes are out; villains have taken over. Lifetime member of E.V.I.L. -- if you don't understand that reference, shame on you --

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