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Kotick: Vivendi Titles Dropped Due To Lack Of Sequel Potential
Kotick: Vivendi Titles Dropped Due To Lack Of Sequel Potential Exclusive
November 6, 2008 | By David Jenkins

November 6, 2008 | By David Jenkins
More: Console/PC, Exclusive

A lack of cross-platform sequel potential is apparently the reason Activision Blizzard let go of Vivendi Games titles such as Ghostbusters, The Chronicles of Riddick: Assault on Dark Athena, 50 Cent: Blood on the Sand and Brütal Legend.

CEO Bobby Kotick spoke on the subject for the first time in the company’s earning call, following the publishing of its third quarter results yesterday.

Although no titles were referred to by name, he was asked why he had "de-emphasised" some Vivendi Games brands following the merger.

"With respect to the franchises that don’t have the potential to be exploited every year across every platform, with clear sequel potential that can meet our objectives of, over time, becoming $100 million-plus franchises, that’s a strategy that has worked very well for us," Kotick said in the Gamasutra-attended call later transcribed by Seeking Alpha.

"It’s something that we have been very disciplined about. So, while there are lots of promise for a lot of these products that we had in the portfolio, I think, generally, our strategy has been to focus -- especially given the increase in development expenditures on the products that have those attributes and characteristics that we know if we release today, we’ll be working on 10 years from now."

Ghostbusters and The Chronicles of Riddick have since reportedly been picked up by Atari, while THQ has confirmed that it will publish the new 50 Cent game. Double Fine Production’s Brütal Legend is the only game from the group of orphaned titles currently without a publisher.

Titles from Vivendi Games which Activision Blizzard did choose to retain include Crash Bandicoot, Spyro the Dragon, Prototype, and an unannounced title.

Added Kotick, "'Narrow and deep' has been essential to our strategy of how you expand operating margins. The difficulty in establishing new franchises or unproven franchises, as we have seen over the last 20 years -- that is one of the great challenges of the business, and I think that you have a less-than-accepting and tolerant retail environment.”

He continued: "It’s harder to attract development talent to projects that are more speculative in the long run, and so what we found is that if you have a [need] for innovation in existing franchises, that’s a recipe for margin expansion."

"You still need to have production of new original intellectual property, but you need to do it very, very selectively. And if you look at the number of new original intellectual properties successfully launched in the market each year over the last five or ten years, it’s a small, single-digit number."

The Activision CEO concluded: "We happen to have a number [of these original IPs] in development ourselves, but the focus is... at retail, and generally for the consumer... to continue to be on the big, narrow and deep, high-profile release strategy."

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Jake Romigh
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"With respect to the franchises that don’t have the potential to be exploited every year across every platform, with clear sequel potential that can meet our objectives of, over time, becoming $100 million-plus franchises, that’s a strategy that has worked very well for us," Kotick said.

I'm so glad that exploitation is working out for you Activision. What a wonderful company you are.

I just hope to God someone with enough brains and respect for good, creative games picks up the likes of Ghostbusters and Brütal Legend.

Jacque Choi
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I kinda agree and disagree with you Jake.

As a gamer I absolutely LOVE playing brand new innovative games. I love new characters, new stories, new game designs and such.

Unfortunately if Amazing/New/Innovative games SOLD nearly as much as established IPs, then it wouldn't be a problem.

The Problem is, they DON'T sell very well, and this is a very high risk/high reward type business. The vast majority of consumers aren't willing to take that risk, and speak with their wallets.

Established IPs reduce the risk, with equal the reward.

sean lindskog
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Ghostbusters was dropped by Activision-Blizzard?

Alas! Thus we witness the death of creativity on our industry.

Jake Romigh
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I agree with you Jacque, the facts are there that original IPs are a gamble. I do not believe this is the case for some of these games, though. Where most original IPs are purely the result of some creative designer with no basis outside of the designer's ideas, games such as Ghostbusters, Brütal Legend and 50 Cent: Blood on the Sand already have things going for them. Ghsotbusters has the vastly popular movie titles, Brütal Legend has the talents of Jack Black playing a metal fan (which should sound familiar, i.e. Tenacious D, School of Rock) and 50 Cent has... well, 50 Cent and GTA4 to rip-off.

These games could do very well with the correct PR "exploiting" the links to the already popular media these games are connected to.

Maurício Gomes
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At least maybe we are saved of another stupid game based on movie >.

[User Banned]
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This user violated Gamasutra’s Comment Guidelines and has been banned.

Logan Foster
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This type of attitude from Mr. Kotick exemplifies exactly what is wrong with games today. The corporate executives of most of these big game studios have no clue that games are supposed to be entertaining and most importantly fun, instead they are recycling a failed movie studio approach of building sequels and maximizing profit any which way that they can. Yet to do so they need to spend countless dollars on a fool's approach to game development where its all about having a pissing match with companies like EA about who can spend more on adding useless "icing on the cake" features that do not do anything to make for a better game experiance.

As long as the big publishers keep this assinine development mentality of needing $100 million in game sales to green light a project they will continue to provide us with the same old recycled drivel that we have seen for the past six or more years. Yet all the while the real games that are providing us with the entertainment and fun that we seek are coming from studios that don't completely buy into this "hollywood greed" logic.

Travis Jones
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First, I'd make 2 points on the "sequel potential" of the above-mentioned titles: 1) It really speaks to Kotick's lack of respect for the creativity and imagination upon which this industry and our greatest games are founded. 2) Each one of those games listed *is* a sequel, the exception being Brutal Legend, which doesn't really mean much, as it's a highly anticipated Tim Schafer title. Instead of being branded by series title, it's branded by creator.

Moreover, though, I predict that as we move into the future, emphasis on a "narrow and deep" outlook is going to hit a wall of diminishing returns. It's likely that sequels will continue to sell better than original and experimental IP, but as with anything, it's good to diversify. Digital distribution channels and an increased emphasis on smaller scale-developed titles is likely to erode the profitability of sequels.

I'm thinking that in 10 years time, the only part of Activision Blizzard that will be worth its salt will be Blizzard, and that only would be because they seem to have more control over their properties than the Activision half. Guitar Hero, Call of Duty, Spyro, and Crash Bandicoot are all going to become Tomb Raiders.

Tom Newman
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It seems like Activision Blizzard should be one of the companies who are willing to take a risk on a game without "sequel potential". The industry would not be where it is without these types of risks, and no one should know this better than Activision.

Jonathan Pearce
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It's interesting to me to watch EA very intentionally step away (at least in part) from this sequelitus model at exactly the same time Activision appears to be trumpeting it's excellence. I think EA finally has it right. It's great to a point, but when you are known for sequels and shovelware and you've lost all capability to create new IP (without buying it), that is a hard place to return from as a company.

For example, Ghostbusters will make money on the license alone unless someone royally screws something up. More likely, it will make lots of money and that will be it. So, let me get this straight, you turn down one-time, virtually guaranteed money because it won't generate more sequels in the future? That is just silly.

Eric Adams
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For publishers like EA and Activision, I think another factor is definitely the marketing of new/creative IP to consumers. Having worked on a few big titles, I can attest that a publisher can easily burn through 10 million to market a new IP. If the IP fails you have a double whammy of production cost and marketing losses to absorb on the bottom line. Having worked for Activision, I know the company is very bottom line focused.

Teri Thom
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Interesting article, if not stimulating and not in a good way. Mr. Kotik's attitude is exactly the kind of nonsense that encourages so-called veteran/mentors of the industry to discourage young creative independent developers.

Some of us are too driven to buy into it.

James Hoysa
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A big thank you to Atari for picking up the Ghostbusters title, although since the actors from the films were heavily involved, it's obvious that if Atari hadn't picked it up, another publisher would have.

Kristian Roberts
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Instead of bashing Activision and EA, we should recognize the types of businesses with which we are dealing. These are both large, publicly traded corporations who (as a matter of law) will be bottom line focused. As such, franchised, stable IP makes a great deal of sense. Reducing risk while maximizing revenues is the mantra of any sound business. Bashing this practice does not really make too much sense.

We must now ask ourselves if EA and Vivendi are even the "right" players to deal with new, innovative IP in any case. My contention is that they are not. Instead, smaller, more agile publishers (e.g. Atari) or nifty developers (e.g. Valve, Stardock, and so forth) may be the right place for good original IP to be created. If the titles catch, then they'll be picked up by the bigger entities (or the developers will be consumed whole hog a la Bioware).

If anyone is in need of a solid analogy here, look to the A&R development process in the music business. As a more 'mature' industry, perhaps there are lessons that our 'developing' industry can learn.

In the ecosystem of games, there is room for the stodgy big guys and the riskier smaller players.

Shaun Greene
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Reading this made me nauseous. Whatever happened to trying to maximize value for your consumer? If the primary criteria for selecting projects is "can we sell it again next year, only with a II?"

As a consumer, I feel like a-b does not have my interests at heart when they approach their development. We can only pray they allow their developers some creative freedom during the actual development cycle, or I foresee overly-manufactured, processed rubbish coming from this company. From the looks of things, they are adopting a "The nail that sticks out gets hammered in" approach to managing their studios.

I wish I could say I didn't see financial success in their future, but putting out crappy sequels to successful projects has always been a sure-fire way to monetize crap. Look at huge number of terrible movie sequels that just get worse with each passing release, yet continue to bring in huge amounts of money. But think of all the classic movies we'd miss out on if movie studios ONLY approved projects with sequel potential...

Devon Carver
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Yeah, I hate to say it but Bobby is doing right by me, a shareholder. But it sure sounds shitty. Welcome to the new EA! But to put it all in perspective business-wise. Look at what just happened at EA. They are taking it in the pocketbook for being innovative. So, if you have a new IP, take it to a different publisher.

J Benjamin Hollman
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There are several problems I see with this model.

For one, Activision's version of sequelization completely separates the IP from the developer. Instead of an IP being associated with the individual strengths of the studio which created it, it's only associated with how much money it can make. So while turning an IP into a steady franchise would normally mean long-term stability and reliable income for a developer, that no longer applies here. If the studio doesn't act according to what Acti-Blizz wants, they will be closed/sold off/absorbed or leave voluntarily, and the IP they created passed off to another studio.

We've seen this with Harmonix's Guitar Hero, and the Call of Duty series keeps seeing itself juggled between two different studios, as if it makes no difference for the game.

Developers don't like seeing something they spent four years creating going on to benefit another studio that took none of the risk in creating that IP in the first place. That doesn't leave much incentive to work with a company like Activision when there are other fish in the sea with a much better deal.

Do Activision's actions coincide with sensible business practices? Of course. The games industry is a business, after all. However, it's an entertainment industry. The business side is only just that; one side of the coin. Just as the creative side of the industry would fail without business sense, the business side has no future without the creativity that only comes from developers. This is the same philosophy that led to the great Atari crash of 1983.

Brutal irony there, considering that Activision was the first independent console developer, when its founders left Atari....

Jamie Roberts
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If there is too much risk, your business will bottom out. But you can also fail from not taking enough risks.

It'll be interesting to see how well their strategy works five years from now, when they've failed to produce any original IP and instead are making Game Sequel 8: The Sequel. If you fail to innovate after a certain point, people lose interest.

The only franchises I can think of that have lasted a ridiculous amount of time are ones like Mario, Zelda, and Metroid, all of which survived major transitions in execution (from 2D to 3D).

Paul Lazenby
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Creativity aside, look at the movie industry - sequels have made a crazy amount of money there - regardless of whether you like to watch them or not.

I have to agree with Devon, I like Bobby's words from a standpoint of being a stockholder, just not so sure about it as an insider in the games industry.

Dan Olson
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Most of you are doing a wonderful job ignoring the fact that they kept Prototype, which is a new IP.

At least four of the top selling games this year will be sequels. I'm not sure how you guys get from "sequel" to "boring shovelware that is the bane of the industry", but try to remember that when you're spending money on Gears 2, Resistence 2, COD5, and Fallout 3. It's disingenuous (or incredibly ignorant) to call any of that shovelware... maybe there's something wrong with the "sequels are bad" logic!

E Zachary Knight
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@ Dan

There is nothing wrong wit ha sequel when creative thought and production goes into it. When a sequel improves on what made the original a success and expands teh world for the gamer, there is nothing wrong with one.

On the other hand, when a publisher produces sequels for the sake of milking a franchise with no improvements, they are the bane of gaming.

The sequels you pointed out are all improvements on their predecessors and worthy of playing. But most often the sequels produced are only ghosts or shells of what made the original a success.

josh barnett
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I'm usually not one for short comments, but I only got one thing to say to this:

When are the leaders of major game corporations going to stop saying blatantly stupid things? We all know it was his reasoning, but that was a terrible thing to verbalize in a public setting.

Heather Decker-Davis
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I was pretty baffled when I originally read that Ghostbusters was dropped! Now that I see this, the confusion only deepens. I mean, there's totally sequel potential, as well as a built-in audience spanning at least two generations. How does that look like a bad idea again?

Ian Williams
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*Here's to hoping the BLIZZARD half of Act-Bliz doesn't kowtow to this sequel nonsense and also brings back some old titles or makes an entirely new one--Like Starcraft Ghost.

Also, as again evidenced by Blizz, sequels ain't always a bad thing; Starcraft II ftw*

Evan Combs
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Fallout 3 is only a sequel in name. It is essentially a completely different game in a familiar universe.

Anyways, this is what I hate most about what EA has been, and what Activision is becoming. They are the only non-first party publishers that can easily take risks while still making more money then I could ever imagine having for myself. Take a few risks and make 300 million a year instead of 600 million. You will be more liked by the consumers, and eventually will eventually have stronger franchises as well as the consumer being more likely to buy a game from you. This kind of practice is exactly the reason I avoid buying EA and Activision games, unless they make a game I just can't find another equally as good.

Lewis Pulsipher
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This happens in most industries: as companies become very large, they become very cautious, and instead of providing innovation themselves, they buy most of it from smaller companies (often by acquiring the company).

Steady reliable incomes are more important than really big incomes. So some of the more successful small companies tend to catch up to the cautious largest companies, over time. But the upper execs of the big companies keep their jobs in the meantime.

In a sense, the big guys become marketing companies rather than technical companies.

Microsoft is an example (overall, not necessarily their game portions).