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Activision's Bobby Kotick on Wii U's disappointment, next-gen dev costs

Activision's Bobby Kotick on Wii U's disappointment, next-gen dev costs

February 7, 2013 | By Frank Cifaldi

Activision Blizzard CEO Bobby Kotick rarely gives interviews these days, so his quarterly conference calls with the company's investors represent one of the few times we get to hear from one of video games' most successful executives.

His company just closed the books on its biggest year ever, but even still, the company warned that 2013 could be a rough transitional period for the entire industry…even for one with stable franchises like Call of Duty, World of Warcraft and Skylanders.

We've highlighted some of what Kotick told his investors -- and inquiring financial analysts -- on Thursday.

On Skylanders' future after a weak Wii U launch

"As you know, we were somewhat disappointed with the launch of the Wii U. I think it's a challenging environment this year, and one of the things we are concerned about is what the install base of hardware will be like for six-to-eleven year-olds.

"But we have a lot of confidence in the franchise for the longterm. I think we're delivering another great product this year."

On Disney Infinity's threat

"We haven't had any competition in the category [to date]. We have a new competitor, and we're very likely to have more. But we've invested a lot against it, we've achieved a lot of good success so far, and we have high expectations for the franchise going forward."

On the living room's shift away from consoles

"As you start to see internet-enabled televisions and the App Store reach the television with a much larger base, it's very hard for us to compete against free. I think there are challenges even at 99 cents.

"And so to the extent that you see a lot more internet-enabled televisions, we're going to have to start thinking differently about the content that we would deliver to those internet-enabled televisions."

On Activision's continued snubbing of mobile

"What we've seen to date on iOS-related content relative to the business that we're in… we're not really moved to dial that significantly. Having said that, we're investing in a variety of initiatives. We're looking at those things carefully.

"There's nothing that we see on the near-time that's going to have a meaningful impact on our financial results, but we're an opportunistic company, and we're always exploring new areas that could give reasonable returns to our shareholders.

On development costs in the next gen

"This is my twenty-second year doing this. And every single console transition we've seen an increase in development costs. Over long periods of time it gets smoothed out, but I would say this is not a transition where that's going to be an exception.

"We're going to have to figure out how to take advantage of the unique capabilities of new hardware, and that requires new skills and investment in tools, and technology and engines."

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