Kotick: The Future Of Activision, From Guitar Hero to WoW
Gamasutra has transcribed some of the most interesting comments from his speech, starting with why Kotick feels the strong online presence bodes well for Activision:
"As you're continuing to see the model shifting to more online play, as we start to capitalize on downloadable content, as we start to get leverage in the international markets... you really are starting to see what I would consider more software industry margins, or online industry margins, than what we've ever seen before in the packaged goods business."
Referring specifically to the merger, he added, "The combination of these two businesses positions us geographically in a place that we never would have been on our own."
Of course, he's talking about World of Warcraft, with whom he suggested it would take a billion dollars of investment even to compete, adding, "When we first started looking at it, it appeared to us like a game in an insurmountable product category, where EA, Microsoft, Sony, scores of venture capital investment had been put to work unsuccessfully in trying to develop massively multiplayer gaming as a product opportunity."
When asked how the Blizzard team would be able to continue keeping Warcraft fresh, Kotick complimented them: "They have a model that is very well developed, they have a very keen understanding of their audiences, and they're just scratching the surface of opportunity in a lot of areas," he said.
Kotick also suggested he might explore additional ways to monetize the game: "The business has grown so much... that [Blizzard], like us, have tried to prioritize opportunity, and that probably has been at the expense of expanding [average revenue per user] to the few million hardcore, rabid hobbyist enthusiast World of Warcraft fans who would pay substantially more than probably what they're paying today for enhanced services like character transfers."
Kotick also talked about future downloadable content for Guitar Hero, noting that 40 percent of the game's audience, in some markets, is female.
"Downloadable content is really an inconsequential part of our business today," he said. "And I think that when you look out three or four years from now -- especially with our relationship with Universal Music Group, you're likely to see downloadable content and music of a variety of kinds playing a more integral role."
On Activision's future product strategy, Kotick indicated the company plans to stick close to its successes: "We've developed the capability to selectively introduce new intellectual property. Not that we're trying to do half a dozen or a dozen a year, which we think is a recipe for failure."
He stressed, "One or two, very selectively, a year, where you have focused development resources, focused marketing activities, you've taken the time to make sure there's an audience need, and a well-defined audience opportunity. And so we've built properties that are very good at accomplishing that objective."