Kotick Pulls a FarmVille, Dislikes Platform’s Profit Margins
A few months ago the largest game company based on the Facebook platform, Zynga (makers of FarmVille, Mafia Wars and most of the other big titles) had a reported falling out over the amount of money Facebook takes away from Zynga in return for letting them use the service. The two eventually agreed to kiss and make up, but it highlighted a very interesting new aspect to gaming’s business model: the network.
Talking to the Financial Times, Activision Blizzard CEO Bobby Kotick has echoed (account only access) some remarkably similar discontent towards the lack of money coming in via Call of Duty’s main network, Xbox Live. “We’ve heard that 60 per cent of [Microsoft’s] subscribers are principally on Live because of Call of Duty [...] We don’t really participate financially in that income stream. We would really like to be able to provide much more value to those millions of players playing on Live, but it’s not our network.”
The article continues to essentially field Kotick’s complaints that whilst Activision are making the most money from the biggest games, there’s still opportunities to earn even more money. This is the mentality that has seen Activision become so financially successful over the last decade.
Slicing through the business talk (“provide much more value to” = “get more money from”) there’s a distinct repetition of Zynga’s superiority complex leaking through. Couple this with Activision’s new decade long deal with Bungie to create a new IP, their increasing interest in a Call of Duty subscription service (akin to World of Warcraft’s), Kotick’s comments last year about how the longevity of multiplayer games will help curb the lost revenue that occurs as part of the used-game market, and their MMO subscription style game plan seems almost inevitable.
I really hope Bungie has enough control over their unannounced IP so they can avoid being lumped in Activision properties if a subscription does happen. That Hammerhead made Call of Duty is probably where they’ll introduce it I’d bet.
Also they haven’t even started charging for unlocks like EA does. 320 points to get all attachments for a specific weapon for example. There are still lots of ways for Activision to generate more money before they even go to a subscription model.
I’m not entirely sure this would work. The whole appeal of COD is that all your friends have it. If you segment the community and you can no longer play with your friend because they don’t want to spend the $5 a month (or whatever) to play the COD games online, I am not exactly sure it would be so popular anymore. I think it could end up hurting the series in the long run.
Funny, there isn’t anything preventing them from providing more “value” to PC players. They’d even be happy to play online on Activision’s servers for authentication.
Kotick is suffering from a critical case of hubris if they think they can get people to sign up for a subscription on consoles on top of LIVE or PSN Plus. I’ll wager 85-90% of them play it because its the hot shooter their friends are playing, not because of loyalty to the brand.
The moment they start charging for a subscription on consoles is the moment their sales collapse. And that will be grand.
Let me get this straight:
Bobby Kotick wants you to pay more money on top of the cost of one of his company’s games, just so you can play these games online… and this is bad.
Now Microsoft wants you to pay more money on top of the cost of their consoles, as well as their games, just so you can play these games online… and that’s ok?
If a publisher/developer wants to charge a subscription fee for access to certain parts of their game, shouldn’t that be their choice? I’m no Kotick fan, but he’s just saying that he would like more freedom to do what he wants with his own products.
@ouched: Don’t lump PS+ in with that wretched Xbox LIVE.
It seems kinda stupid to me. I mean, true, people are willing to pay for stuff like World of Warcraft, but who’s going to lump the fees for live, or Playstation plus, electric, AND service for one game, or just a few, because of their friends who are foolishly doing the same thing? Oh, and he’s right. Don’t lump Live with PS+, because PS+ is just a way to do the exact same thing, but on a less social console.