Activision Slams Social Games

Activision's first foray into social gaming has a warm, friendly group-hug kinda logo, doesn't it?

The surprise isn't that someone from Activision is saying something amusing; the surprise is that it's not Bobby Kotick, for once. This time the quote comes from Eric Hirshberg, CEO of Activision Publishing, speaking at Gamescom, when asked about Activision possibly making an acquisition to get into social games:

Valuations of some of the companies in that space are out of whack, so that’s an issue when it comes to acquisitions…But don’t mistake careful, methodical planning for inaction. Any new place where people are playing games, at scale, is something that we’re interested in.


Don't mistake careful, methodical planning for inaction? Is that like when I tell my wife that I was just thinking, and she says I was snoring while I was thinking? Yeah, I think sometimes planning and inaction are difficult to distinguish except in an autopsy.

Investors may be getting a trifle weary of dismissive statements from execs about market segments they're not in; see Nintendo for how that works. Activision has floated along without too much criticism with Blizzard and Call of Duty to buoy their sales. If there's ever a hiccup in one of those, expect the criticism to become a deafening roar.

Guitar Hero Shut Down... Not Inevitable?

One of the biggest categories of game software over the past few years was music software... until it collapsed. There was an amazing amount of software and hardware sold to go with the Guitar Hero craze. It helped prop up industry sales and mask the shift of revenues to mobile and social gaming. Until it suddenly died... and perhaps it wasn't of natural causes.

This Crunchgear article makes the point that Guitar Hero was a cow that was milked to death by too-frequent new releases, and essentially getting customers to pay for new tracks at premium prices. Eventually the craze ended, or people woke up to the expense, and then Activision decides it's past hope and kills it completely.

Seems to me that with proper management such a franchise could generate revenues for a long time, if you don't abuse the customers. Shows what an obsession with quarterly profits can do, doesn't it? Activision has been busy killing franchises lately (Tony Hawk bit the dust, too), and it's not clear what's going to replace them any time soon. I suppose Blizzard's new releases over the next year will of course be hits. Activision better hope that the new Bungie title is a worthy successor to Halo.

Activision Doesn't Believe In Growth

Bobby Kotick of Activision has once again caused his PR staff to reach for the Tums bottle by opening his mouth to investors at the Reuters Global Media Summit . “The place where you have the opportunities for growth is within the communities of franchises we control,” said Kotick. “We don’t view the App Store as a really big opportunity for dedicated games. It’s a different question assessing [social games] as a business opportunity. Right now we don’t see an opportunity for us to participate in that market.”

In the meantime, EA is investing heavily in those areas.

If you find yourself puzzled by Kotick's remarks, I took the liberty of rephrasing them a bit in the time-honored fashion of PR professionals putting words in the mouths of CEOs. Try my version out below and see if it clarifies the picture for you:

"We don't believe in investing in the highest growth segments of the market," said Bobby Kotick. "We prefer to place our bets in the part of the industry that has shown negative sales growth for the past two years."

Usually you pay at least a little attention to the parts of the market that are growing the fastest. Even if you don't want to get your own dollars invested, at least license your properties to someone who's in those spaces... for brand marketing and some profit-heavy licensing revenue if nothing else. Does Bobby really think he can keep doing CoD sequels forever and sales will only grow? Shouldn't the collapse of music titles have shown him that growth is not forever?

"We're completely happy owning large dinosaurs and feel no need to invest in those pesky little mammals," said Kotick. "Oh, look at the pretty light in the sky... I wonder what that means?"

Top Spin Fails To Clear The Net

Nice try, thanks for playing. Activision's CEO attempts to spin the fact that 70% of Activision's operating profit comes from World of Warcraft as proof that their "online strategy" is working. I think it's more than a bit of a stretch to call one game a "strategy", especially when you've never been able to duplicate it. And you acquired it rather than built it. And you've never even tried to duplicate its success in any way.

Gee, perhaps it might be a good idea to have more of those sorts of things... now having a plan to do that would actually be a strategy.

The lesson here is that you shouldn't try to spin everything, because you end up looking stupid. And making the customers think you're stupid. And possibly alienating potential business partners who might think you're stupid.

Bobby Kotick just shouldn't talk to the press. He's not good at it, and it doesn't help his company or their stock price.

Engaging the Enemy

Activision finally seems to be awakening to the PR damage that's been caused with the firing of Infinity Ward leads and the subsequent dueling lawsuits. In a bold move, they have sent a blogger into enemy territory to engage the haters. Activision blogger Dan Amrich has been posting to a Facebook group set up by Activision anti-fans, attempting to calm the waters.

He may not succeed, but the effort itself will put Activision in a better light. And, as you can see by this post and others, it's bringing more publicity to Activision's attempts to not be perceived as jerks. The alternative is to turtle up and not say anything, which means other people get to define your position for you. Now, there are dangers in communication like this; you may make matters worse if you say the wrong thing in your attempts to answer jabs. You may also piss off your boss, too, as you attempt to minimize the statements the boss made. It's a tricky line to walk.

Ultimately, will this affect Activision's sales? Perhaps not; the number of people aware of anti-Activision sentiment must be a tiny percentage of their customer base. The greater danger might be to Activision's ability to attract developers or to cut deals for licenses or acquisition of development groups. At this point, you'd have to think any developer that was approached by Activision with an investment proposal would either say "No, thanks!" or ask for a lot more money. So the corporate image can be worth millions, even if doesn't matter much directly to the customers.

Bottom line: It's better to keep a good image than to try and rescue a tarnished one, but in either case the effort is worthwhile.