Digital focus for new-look Activision

As it attempts to adapt to the ever-changing games market, publisher Activision has pledged to realign its focus on its digital business.

The strategic move has come at the cost of key brands such as Guitar Hero, and has also resulted in the loss of some 500 jobs.

"Digital distribution continues to be the fastest-growing and most profitable part of our business," Activision Publishing CEO Eric Hirshberg stated. "We expect significant growth of more than 20 per cent in the US and Europe this year, driven by higher broadband penetration, complete consumer adoption and additional content."

A growing emphasis on digital has been on the cards for some time, with the publisher having previously expressed its desire to leverage the online potential of Call of Duty – something that is now coming to fruition.

"Since our merger with Blizzard in 2008, we have engineered a deliberate shift towards digital delivery of content and towards establishing direct ongoing relationships with our audiences," Activision Blizzard CEO Bobby Kotick stated.

"This has resulted in the development of new capabilities, the release of new and innovative products and greater audience engagement across our top franchises. We now have more predictable revenues and cash flow and derive the majority of our profit from very high-margin digital channels.

"One consequence of this focus is that this year, we’ll move away from certain initiatives that have played an important role for us in the past, but that offer limited opportunities as we move forward. This means we’re accelerating our investment into areas that offer higher growth and margin potential and better experiences for our gamers.

"Another important point is that new distribution channels have emerged that offer efficiency and convenience for audiences and better profits for us as a content creator. We believe the sustained online engagement and enjoyment of Call of Duty audiences is taking a share away from many other forms of leisure, as an example. Focusing on the delivery, digitally, of new innovative Call of Duty content and services will enable tens and millions of players around the world to continue to enjoy the experience Call of Duty offers."

It’s interesting though that unlike rivals EA, who has invested heavily in casual gaming companies, Activision’s strategy remains doggedly rooted in the core console market. On the face of it this appears to be a gamble, as does the abolition of a core brand such as Guitar Hero.

Putting all your eggs in one basket, even one as gold-plated as Call of Duty, is a gamble for any firm. There have been plenty of golden eggs over the years (Medal of Honor, SSX, Mortal Kombat, Driver, Dance Dance Revolution, PES, Turok) that have since long lost their shine.

By the end of the decease we’ll have an idea of whether the gamble has paid off.

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