
Activision boss details the ways in which the modern market has got consumers spending more
With increasing development costs putting upwards pressure on new releases to maximise their sales potential, Activision Blizzard boss Bobby Kotick has explained that modern releases can now make ten time the revenue that they used to.
“In the last cycle of videogames you spent $50 on a game, played it and took it back to the shop for credit,” Kotick told attendees at the Deutsche Bank Securities Technology Conference in San Francisco, as spotted by Spong.
“Today, we'll sell you for $100 a guitar. You might add a microphone or drums, you might buy two or three expansions packs, different types of music. Over the life of your ownership you'll probably buy around 25 additional song packs in digital downloads.
“So, what used to be a $50 sale is a $500 sale today.”
And harking back to yesterday’s comments about a possible console-less future for the Guitar Hero brand, Kotick also foresees a future where publishers can command a greater share of its total sales.
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“And the best of all margins – the 25 per cent operating margin business – has the potential as we can see with World of Warcraft to be a 50 per cent operating margin business.
“What used to be a low 20s return on invested capital business is now growing to a plus 40 per cent return on invested capital business.”
Comments
I hate this guy!
This guys such a douche! He definately got slapped with the ugly stick!
And Guitar Hero 5 totally something I'll wait for it to drop in the pre owned baskets before I even think about buying it! And I'll continue to use my Rockband peripherals to play it with too!
I hate this guy
Kotick doesn't give to sh*ts about the gamesindustry, all he cares for is lining his greedy pockets. He's an asshole and so is anyone who champions the turd.
Aye
Consumer peripheral fatigue is just around the corner.
Business Man Wants To Make Money Shocker!
He's a business man doing what business men do. Making as much money for his company as possible.
No matter what your opinion may be, Activision are going from strength to strength under Mr Kotick. So he's doing something right.
History repeats
That's right, Warrick just like Atari was doing something right back in the 80's, and we all know what happened there.
It was this very same level of arrogance and greed combined with an eventual state of bordom from the consumer for the same old products year in year out that led to an industry crash.
Scoff all you like, it will happen again.
Very True JB
Very True.
However EA have survived on rehashing FIFA etc. for the last couple of decades!
COD and GH have a little while to go before the consumer walks away.
But with all business, you become complacent, you go down. But I think Kotick's shrewd enough to see that coming. Therefore, walking away before the sh*t hits the fan whilst having steered the company thru massive growth. Not such a dumbass...
I aint a kotick lover, just makes me laugh when people are shocked at a money grabbing business man. By definition, that's what a business man is and should be!
History repeats?
@ 5 : I have to agree with you there, except i thought it would be the Wii that brought on the crash. High quantity / low quality software and a comsumer base that doesn't know the difference.
If it wasn't for MS and Sony, I think it would be early 80's all over again.
AAAAAAARRRRRRGGGGGGGGGGGHHHHHHHHH!!!!!!!!!
every time this guy opens his mouth it offends me and i wanna kill him. i can't get passed the rage. it's only the fact that MCV have thankfully ommitted his picture that's stopping me from going ape-shit here. that would have really set me off.
I'm doing the only thing i can to protest Activision's general bastardity and boycotting all Activision games. yes, that does mean i can't have MW2, and i accept that's probably gonna be the best game ever-ish, but i have my fricken principles.
MAG it is then :(
DAMN IT !!!
I'VE JUST SEEN HIS HIS FACE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
@ 7
I also believe that the Nintendo Wii will have a part to play. Already its clear that it's reaching saturation point and games bought for the system are constantly on the decline. There's a lot of factors that point to history repeating itself-the global recession with many companies closing down being one such factor, and while I wouldn't want to see it happen a part of me can't help it might be a good thing. The first crash eventually revitalised the industry, why can't it happen again? A few less fat cats eating all the pies can only be a good thing for the ongoing creativity of the games industry.
Problem with the Koticks of the world they can't see further than the end of their nose-or money jar in this case; people do and will get bored. EA having to re-adress their output due to declining sales on some of their biggest franchises is testement to that.
Guitar Hero, 6, 7, 8? COD 10? Peoples attention spans will only last so long and that's when it will al come crashing down.
ha ha ha
izzy wizzy kotick gets busy, turns $50 to $500 wow !!
i just hope infinity ward break off from activision and go on their own, id like to see his reaction to this move
Ben...
... has someone let Kotick off the island again?
REpeptative
the game industry relies to healiy on sequels, being a gamer since the spectrum and oric 48k that's some time ago, i have had 95% of all console and quite a few highly spec pc builds to accomodate my game playing addiction. but sadly even with the clever advancements in gamming especially since the HD console MS and sony im slowly become bored of the reharshed games and sequels. Even this xmas we have some quality games comming but when u strip away the clever gfx routines the fundamental gameplay doesnt seem to have advanced as quickly as the HD era hardware especially PC's of todays standing, somethings lacking - unless massive investment in new areas or original development studios the bubble will burst. EA had their shot for a number of years now its Activision turn but at the end of the day if we keep settling for sequel after sequel then companies will milk the cash cow. This industry needs change also some new generation of hardware that allows multiple input for players to control their virtual worlds.
Kewley
All that time using a computer and playing games, and you couldn't learn to SPELL?
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