Activision, which owns the extraordinarily successful "Call of Duty" series, said the deal will create one of the largest global entertainment networks with more than half a billion combined monthly active users in 196 countries. It also will help Activision get its games out of the living room and into the hands of potential players through smartphones and tablets, a market with seemingly unlimited growth potential. Activision said mobile gaming is expected to generate more than $36 billion in revenue by the end of 2015 and grow cumulatively by more than 50 percent from 2015 to 2019. The deal also will help Activision diversify its customer base. CEO Robert Kotick told CNBC on Tuesday that about 60 percent of King's audience is female. "Attracting women to gaming is a really important part of our strategy," he said. Still, questions remain about what the advantage will be for the two companies, and perhaps more importantly, to gamers. King has struggled to follow up on the success of its Candy Crush series, a game so pervasive that a British lawmaker was admonished after being caught playing it during a Parliamentary committee hearing. King's revenue fell 18 percent to $490 million in the second quarter, and gross bookings also dropped 13 percent, both of which the company attributed to the maturing of its Candy Crush franchise. Jefferies analysts Brian Pitz and Brian Fitzgerald said that replicating the success of Candy Crush is a daunting task. "We expect a heavy dose of skepticism from investors especially given the large deal size," the analysts wrote in a research note. Activision Blizzard Inc., based in Santa Monica, California, will pay $18 in cash for each King share, a 20 percent premium over its Friday closing price. Kotick said the deal gives his company "a very productive way" to use foreign cash that had not been earning a lot of money. U.S. tax rates prompt companies to avoid transferring money earned overseas back home to the parent. The boards of both companies have approved the deal, but King shareholders must still vote on it and regulators in Ireland must also sign off. The companies expect it to close next spring. Shares of King Digital Entertainment Plc., which went public in March 2014, jumped 15 percent, or $2.34, to $17.88 Tuesday in pre-market trading and after the deal was announced. Meanwhile, Activision slipped 12 cents to $34.35.
Blockbuster sales of "Call of Duty: Black Ops III" pushed overall sales for the franchise past 250 million copies, video game publisher Activision said Thursday in a blog post. "Thanks to the community's continued support, 'Black Ops III' was the top-selling game of 2015 worldwide," Activision communications manager Scott Lowe said in the post. Activision proclaimed "Call of Duty: Black Ops III" the top-selling title of 2015 globally "by a wide margin in both units and dollars." The game racked up more than $550 million in sales in the three days after its release on November 6, according to California-based Activision Publishing, a subsidiary of Activision Blizzard. Overall video game sales last year tallied $13.1 billion, essentially unchanged from the prior year and driven by titles tailored for new-generation PlayStation 4 and Xbox One consoles, according to figures released by NPD. Black Ops III is the 12th game in the series, testimony to its longevity and ability to reinvent itself, all the while earning it a loyal following of tens of millions of fans. The latest mission in the first-person shooter franchise sends players into a "dark and twisted future." This time the action is set in the year 2065. Climate change has spawned fierce competition over scarce resources. Highly effective anti-aircraft systems mean fighting takes place on the ground, often in covert or "black" operations. "Black Ops III" was created by Treyarch studio and published by Activision. The second-selling video game last year was Madden NFL 16, a US football-themed title published by Electronic Arts. Rounding out the top-five list by sales at stores were, in descending order, "Fallout 4," "Star Wars: Battlefront" and "Grand Theft Auto V," according to NPD. Explore further: 'Call of Duty: Black Ops' sales top one billion dollars
News Article | January 5, 2016
Activision Blizzard, makers of the popular Call of Duty, World of Warcraft, StarCraft, and Diablo gaming franchises, has announced that it has acquired eSports organizer Major League Gaming (MLG) in hopes to become the ESPN of the growing world of eSports. The eSporting world has seen a rapid rise in the last few years, taking in $612 million in revenue in 2015 alone as more and more people become spectators of—and take part in—competitive gaming. Streaming audience numbers have been estimated to have hit 100 million in 2015, making it more popular than many professional sports leagues. That audience is expected to grow to 300 million worldwide by 2017, according to Activision. "Our acquisition of Major League Gaming’s business furthers our plans to create the ESPN of eSports," Bobby Kotick, CEO of Activision Blizzard said in a statement. "MLG’s ability to create premium content and its proven broadcast technology platform—including its live streaming capabilities—strengthens our strategic position in competitive gaming." Though Activision did not confirm the numbers, the gaming giant reportedly snapped up all of MLG’s properties, including MLG.tv, MLG Pro Circuit, and the GameBattles platforms, for $46 million. Activision confirmed it will keep all of MGL’s properties alive as it moves them in-house, allaying fears that it would be shuttering the businesses. "The acquisition of MLG’s business is an important step towards Activision Blizzard Media Networks’s broader mission to bring esports into the mainstream by creating and broadcasting premium eSports content, organizing global league play and expanding distribution with key gaming partners," Mike Sepso, MGL cofounder and now senior vice president of Activision Blizzard Media Networks, said in a statement. Though total eSports revenues combined take in well under a billion dollars globally today, Activision’s acquisition of MLG is at the relatively small price of $46 million is seen as a smart move on the company’s part, due to eSports' increasing ability to attract big-brand advertisers–-an important extra revenue stream as production costs for next generation console games like the PlayStation 4 and Xbox One continue to climb.
News Article | March 6, 2016
E3, the shorthand name for the annual Electronics Entertainment Expo, is the biggest video game industry convention in the world. Or, well, it used to be. E3 is by no means the largest in terms of attendance—Cologne, Germany's Gamescom routinely sees hundreds of thousands more people—but for over a decade it's been the place for game announcements, reveals, and showcases. Despite this, there has been talk for years that E3 was a dying beast, a relic of an old age. While the show is set to take place once again this year, numerous companies are scaling back their presence, and it looks as if E3 as we know it is finally done for. That's not to say E3 is poised to no longer exist; there's no reason to believe that this year will be the last one ever. But there's no denying that major changes are afoot, especially in light of what's unfolded so far this year and during the last week in particular. Back in January, Electronic Arts announced it would not have a booth on the floor of this year's E3. This is one of the world's largest game publishers, responsible for Battlefield, Mass Effect, Madden, and FIFA, among other franchises, choosing to forgo its usual E3 presence in favor of its own event. It's not as if this is a year in which it has nothing to show; in addition to the usual slate of sports games and other titles, EA has new Mass Effect, Battlefield, and Titanfall games due out by the end of March 2017. History would suggest a major showing for the company at E3. Instead, EA will host its own event, called EA Play, just prior to the start of E3 in Los Angeles. Rather than host its usual press conference on Monday, the day before the convention officially begins, it'll instead do so on Sunday, when it kicks off a three-day event that fans can attend to play upcoming games. By holding this the week of E3 in Los Angeles, EA gets to have an E3-like experienceon its own terms. If the people come, EA Play will likely become an annual event, and it wouldn't come as a surprise if future events move to a different point in the year, away from E3. EA isn't alone. Another of the industry's largest publishers, Activision Blizzard, followed suit this past week. In a blog post ostensibly meant to announce the company's year-round support of the Call of Duty community, it revealed it will not have a booth at this year's E3. The latest Call of Duty game will still have its traditional showcase during one of the console manufacturers' press conferences (Sony, for the second year running), but you won't see Activision on the show floor. Just like that, two of the biggest exhibitors in the Los Angeles Convention Center's South Hall are gone. EA, for one, will still take private meetings at E3, but neither of these companies will be there in their usual capacity. And in all likelihood, they won't be able to easily get back their floor space in the future, as companies are able to hold their spots from year to year. That's especially significant for EA, which had a premium spot in front of the entrance to South Hall. In short, for EA to pull out doesn't mean it just wants to skip this year, it shows a lack of faith in the show's future in general. The Activision news was then followed by word that neither Disney Interactive nor Wargaming would have booths. An alleged, likely incomplete floor plan for this year's show appeared online this weekend (via gaming forum NeoGAF), and it paints something of a grim picture. For its part, the Entertainment Software Association, the trade association that represents the games industry and organizes E3, has tried to downplay the recent announcements. "E3 is constantly evolving. For example, just three years ago there wasn't a sizable virtual reality presence at E3 and barely any mobile or handheld games," ESA senior vice president of communications Rich Taylor said in a statement shared with Motherboard. "Those companies and titles are now a significant element in the event. "The event continues to break records on the number of international attendees who come to E3 every year to participate in the global launchpad for video game news and products. 2016 will be the same, including an event with a record number of press events in the works. "In short, attendee registrations are surpassing where they were at this point last year. Interest from new exhibitors remains strong and we are in discussions with major exhibitors to take the floor space that is available. We look forward to seeing the world in Los Angeles in June." Whereas E3 has traditionally been a press- and industry-only event, last year the ESA decided to allow 4,000 to 5,000 fans to attend. That total may explain how the ESA is allowed to claim 2015 broke records; 52,200 attended the show, compared with 48,900 in 2014, when no one from the public was allowed in. Attendance is still far from what it was in the early-to-mid 2000s, however, when the ESA reported that E3 attracted 60,000 to 70,000 people each year. There's no word on who the major exhibitors the ESA refers to are. The ESA might not have any trouble filling the floor space, but it's not as if there are many EA or Activision-sized goliaths that are likely to have been waiting to get in. And that's because the industry is changing. Many of the world's biggest games—things like League of Legends, Dota 2, or Clash of Clans—aren't the sort of games companies are clamoring to show off at an event like E3. As free-to-play becomes the increasingly dominant business model for games, it makes less and less sense for many companies to come to E3 to exhibit their games. That appears to be the rationale behind Wargaming's decision. The World of Tanks maker said in a statement to GamesBeat that it's choosing to "focus a large majority of activities on events focused on our players and community. ... From a strictly business perspective, E3 just doesn't fit our current direction. It's a show that is very centralized on retail product, and as a free-to-play digital download gaming company, we've realized that while the show may be a good fit for lots of other publishers and developers, it's currently not a great fit for us." A game like Dota 2, meanwhile, doesn't need to be promoted through big events like E3. It gains international exposure throughout the year thanks to major competitive tournaments such as The International, which is held each summer and attracts millions of viewers. It's 2016. There are countless ways to showcase your game that don't require catering your schedule to an event in June that may or may not fit your timetable, but is all but guaranteed to ensure the spotlight isn't on you for long. There are dozens upon dozens of announcements during E3. It's difficult to digest everything whether you're there or following the show from afar, and really, what good is it for anyone when games invariably end up being ignored or flying under the radar because there's just so much? No one wants to be in that position. Certainly no one wants to foot the bill for an E3 presence only to have their games overshadowed by everything else. And that's nothing to sneeze at: The cost of floor space and bringing dozens of people and all sorts of equipment to Los Angeles is not cheap, nor is the food or hotels those people then need. It's not as if the only alternative for these companies is to announce games through a magazine cover story. E3 reveals are quickly becoming as antiquated as those. For years, game companies have been taking steps to circumvent the media and talk directly to fans. While companies have long had their own websites and forums, Microsoft and Sony took things further with Major Nelson's podcast and blog, and the PlayStation Blog, respectively, in the mid-to-late 2000s. Today, every game company cultivates its own fanbase through social media, livestreams, and so on. They can make announcements without relying on members of the press relaying what publishers went to great expense to show at E3. Of course, having an E3-esque event can help to attract more eyeballs to any given announcement, but it's long since been the only show in town. As noted above, last year's E3 welcomed several thousand fans, but there are already numerous fan-centric events that have popped up over the years: Seattle's Penny Arcade Expo has expanded from one annual event to four throughout the United States and Australia; QuakeCon has grown from celebrating id Software to all of parent company Bethesda's titles; BlizzCon highlights Blizzard's franchises; MineCon does the same for Minecraft; and so on. There are countless other such events in the US and around the world. Now we also have EA Play, and Sony appears intent on making its hit fan event PlayStation Experience an annual tradition. Nintendo, always one to march by the beat of its own drum, doesn't have such an event, but it has established its Nintendo Direct streams as press conference alternatives that it can sprinkle throughout the year. E3 doesn't serve the vital role it once did. It started in 1995, long before YouTube and Twitch. Consoles like the PlayStation 3, Wii, and Wii U were all unveiled there, while the Xbox 360 was shown ahead of time during an MTV broadcast and then more fully detailed at E3. The most recently revealed consoles, the Xbox One and PlayStation 4, were both announced at dedicated events unrelated to E3. When Nintendo finally reveals what its new NX console is this year, it wouldn't come as a surprise if it happens outside of E3, where the company has stopped hosting press conferences anyway in lieu of supersized Nintendo Direct streams. All of this is to say that E3 as we know it—the big, loud showcase where everyone waits to make their biggest announcements—is bound to change. I've always enjoyed the show, both as something to attend and something to enjoy from the comfort of my home. It's fun to see a glimpse of what everyone is working on, build up a backlog of previews to read, and get excited that this might finally be the year some longshot dream comes true (hey, Sega, a western release of Phantasy Star Online 2 would be just great). I hope E3 continues to exist—a smaller show seems like it would be good news for everyone, save for perhaps the city of Los Angeles which could miss out on a huge influx of people eating out, riding in taxis, and staying in hotels—but one thing's for sure: It's going to be different from here on out.
Higher-placed executives killed Titan in early 2013, long before it was ready for the general public. Kaplan felt crushed. But Blizzard didn't fire him. It didn't demote him. Instead, the Los Angeles-area company put him in charge of another huge project. This one, called "Overwatch," is due for release this spring. It's an unusual new shooter game, with bright, natural settings and wide-eyed, emotive characters in a genre known more for militaristic virtual venues. It also veers from the cliched lone gunman to make team-based play integral. And if it lives up to early reviews, it could serve as a textbook case in how a strong company culture can recover from a failure while using the misfire to its advantage. Blizzard epitomizes the overused but always important proverb that "failure is learning," said John Smedley, former chief executive of Sony Corp.'s online gaming unit. "'Overwatch' is a truly revolutionary game for the first-person shooter genre, and the foundation of Titan is exactly what led them there." Reviewers of an early version of "Overwatch" like it. Wired, Forbes and Kotaku reviewers said they were "impressed," "enjoying the ride," and "as excited about a new video game" as ever. Millions of other players also are beta-testing it. "Overwatch" pits two six-player teams on a futuristic Earth in matches that resemble parts of well-known brands "Call of Duty," "League of Legends" and "Madden NFL." It's about offense and defense, strategy and camaraderie, not a race to kill the most. Mixing the right set of sly assassins, freakish hulks and other characters, given the mission and opponent, is what makes the game special. It's too early to deem "Overwatch" a success. And Titan wasn't nearly 25-year-old Blizzard's only misstep. Remember "Starcraft: Ghosts"? But no failure fell with quite the social-media-energized thud of Titan. Blizzard could swallow the cost, a fraction of nearly $600 million in operating income in the fiscal year that ended Sept. 30. What it feared was the damage to its sterling reputation. Such a big failure might have led most wary corporate executives to quadruple-guess Kaplan. But Blizzard Chief Executive Mike Morhaime and Chief Development Officer Frank Pearce instead quickly tapped him to lead "Overwatch." And they offered the perfect confidence booster. "If you build it, they will come," Morhaime told Kaplan. The famous "Field of Dreams" quote, a movie Kaplan, 43, fondly remembers watching with his dad, was "as inspirational as it could get" for the senior vice president and "Overwatch" game director. To the bosses, releasing a dud of a game would have been true failure and more costly. Having programmed games for much of their careers, Morhaime and Pearce respect the creative process more than "guys in suits" preoccupied by financial projections, Kaplan said. Their sympathy meant no one would be kicked to the curb. Legacy then became a motivator too. Blizzard, a division of Activision Blizzard Inc., has a long record of producing blockbuster games, including "Starcraft II," "World of Warcraft" and "Hearthstone." Proud legacy has its downsides. When the Titan project was launched in 2007, "World of Warcraft" was near peak popularity with more than 10 million paying subscribers, and a cocky Kaplan and his colleagues dismissed the challenges of recreating phenomenal success. Confidence became overconfidence, even arrogance. But Blizzard raises a new flag outside headquarters for each game launch. Not doing so for Titan gut-checked Kaplan. With "Overwatch," a humbler approach was called for. "The goal was to redeem ourselves amongst our studio, among our peers," Kaplan said. This time, he kept the team small. Titan numbered 150 workers. "Overwatch" has 80. Kaplan counts no magical number. Rather, he stayed tightknit enough to minimize bureaucracy and maximize individual creativity. "You don't want to create an army," he said. Another Titan lesson: Unshackle the team. The Titan crew was suffused with tension because of frustrating constraints, including most vividly a ban on virtual "flying cars." Kaplan's cheeky "Overwatch" response is the project's lone arbitrary rule: Every car must fly. That's not to say there's no regimen. All 80 people meet three times a week. To strengthen their common purpose, everyone plays "Overwatch" twice daily - in the morning and about 6 p.m. before going home. The next day, they regroup in small teams in their areas of expertise. Kaplan said high engagement is necessary to have people spot issues firsthand and inspire quick fixes. Smedley, the former Sony executive, said any organization could perfect their wares by matching Blizzard's early-testing discipline. Blizzard has lots of people "just like me and their other customers seeing this is fun and this isn't," Smedley said. "By the time we see it, it's polished as heck." Support even came from way up top. When Kaplan first pitched "Overwatch" to Activision Blizzard Chief Executive Bobby Kotick, he whizzed through slides depicting characters. He figured that Kotick, who had left game development for the C-suite early in his career, cared more for business-related elements. But Kotick slowed him down, asking to again see images of Torbjorn, a thick-bearded Swedish engineer who forges hammers. Kotick was floored: "These are the most compelling characters I've ever seen," Kaplan recalled him saying. Since that day, Kotick has talked up the game and driven to Irvine to play it. To him, the past is the past. The widespread corporate involvement builds on Blizzard's long-employed "strike team," a cross-section of employees who are top-notch players and get to test products. They remain important because they lack an emotional attachment to features. Outside the game, Blizzard is creating social media posts, graphic novels and short animated videos to develop the "Overwatch" back story. Naturally, the title jumped from game to multimedia franchise. In addition, Kaplan could leverage other departments while keeping his corps small. The video production team, for one, has produced game ideas "just as much as" his team, he said. He lends developers to other projects and other directors return the favor. Feedback also has come from new sources. "Overwatch" is the first game for which Blizzard created an internal online forum, allowing the entire studio to collaborate. The collegial spirit has spread. Blizzard's quality assurance testers focus on certain games but constitute a separate department. Kaplan, though, included the 14 "Overwatch" testers in his team meetings to the point where there was little separation. So when quality assurance managers gave "Overwatch" testers cash to party, the testers organized an internal tournament for the game for the entire development team, buying pizza and beers for the championship. The small act had big consequences. The tournament revealed design flaws and proved the game would be great for competitions. And Kaplan came away encouraged that the testers took on the culture of doing more with less. Chris Metzen, Blizzard's senior vice president for story and franchise development, said that the "Overwatch" approach re-instilled companywide "appreciation" for smaller projects. That's a good thought to help Blizzard save face after Titan, but the 22-year Blizzard veteran insisted that there's been remarkable "geeking out." "It's the coolest time to be at this place," Metzen said.