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Activision Assures 'Methodical' Entry Into Social, Mobile
Activision Assures 'Methodical' Entry Into Social, Mobile
September 8, 2011 | By Kris Graft

September 8, 2011 | By Kris Graft
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More: Console/PC, Social/Online, Business/Marketing

Compared to game publishing rival Electronic Arts, Activision might appear to be over-reliant on its packaged goods business, which is driven primarily by the Call of Duty franchise.

While EA has invested over $1 billion total in the acquisitions of social network game maker Playfish and casual game dev PopCap, Activision has yet to buy into social and mobile in a big way.

But Activision is investing in social and mobile, albeit in a cautious fashion, Activision CFO Thomas Tippl said at the Citi 2011 Tech Conference in New York City today.

"We're methodically investing in social and mobile gaming projects," he said. "... While our goal is always to be number one in anything we do, even if we only get to half of our fair share in mobile and social over the next three years, it will still represent a significant upside, given that the mobile and social gaming markets have finally reached critical mass. And I expect it to grow at a double-digit clip for the foreseeable future."

"We are certainly expanding the reach of our franchises through the platforms that are emerging," Tippl added.

One way that Activision is extending its Call of Duty franchise is through its premium, paid "Elite" service. Players will be able to interact with their Call of Duty Elite accounts through smartphones, tablets and web browsers.

Currently the publisher's social and mobile initiatives tie into core franchise plans, but there will be all-new projects on emerging platforms in the future, Tippl explained.

"To date, we've mostly [explored social and mobile] around our existing franchises. In the future you will see more activity on our part to broaden our social and mobile parts of the portfolio," said Tippl.

"But it's going to be done in a thoughtful, methodical way," he continued, "and in a way that will tend to create value for our shareholders, as opposed to venture capitalists and private equity firms [that are contributing to] what I would call call a bubble valuation."

While Activision has taken a wait and see approach to the social and mobile markets, it hasn't ignored digital distribution and other online opportunities. Across all of Activision Blizzard, subscription-based World of Warcraft attracts 11.4 million users worldwide, and Activision sold 18 million downloadable map packs for last year's Call of Duty: Black Ops alone, bringing the average total spend on that title to $76, according to Tippl.

That's not to mention future online monetization initiatives, including an eBay-like auction house for Diablo III, a StarCraft II marketplace and Blizzard's upcoming new MMO.

The focus on high-margin online models means that Activision Blizzard has an industry-leading gross margin of around 30 percent, driven mainly by World of Warcraft. Tippl wants to continue that high-margin trend.

Activision also has high hopes for its upcoming toy-centric online game Skylanders, which Tippl said he hopes will "reinvent the toy category."

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