Bobby Kotick on another huge quarter for Activision (Call of Duty 4 up to 9 million units)

Red hot Activision posted crazy earnings today, even though it didn't release any games last quarter. Ridiculous 93% revenue growth was driven primarily by continued sales of "Guitar Hero III" and "Call of Duty 4," the latter of which has now sold 9 million units worldwide. That is a LOT. And means CoD 4 is going to be that very rare game to cross the 10 million threshold before it's all said and done.

All the details will be posted soon in my story at Variety.com, at which point I'll link here.

One detail worth nothing from Activision's earnings release is this: "Activision announced today that online functionality for certain key titles to be released in the December quarter of fiscal year 2009 and thereafter is expected to become a significant component of game play for certain platforms for which the company will have continuing performance obligations beyond the sale of the game."

Translated to English: Activision plans to make more money, and incur more costs, from the online components of titles hitting this holiday season. Does that mean we'll be paying more for online play with games like "Guitar Hero IV?" I don't know the answer, but it's interesting.

Here are also for your enjoyment are a few details from my talk with Activision CEO Bobby Kotick about the earnings:

Me: When I see certain companies (like THQ and Midway) performing so far below the NPD industry average, I know others have to be bringing it up. Sure looks like you're in that group.,

Bobby Kotick: For 18 years we've been waiting for this moment. What’s really happening is that the mass market for videogames has arrived. New audiences have now emerged for products like "Guitar Hero" and "Call of Duty" and I think that's in part because of the social component and in part the accessibility and also probably the production values

If you look at the dollar costs per hour of entertainment, we deliver the greatest value of any medium. I thnk especially in a weakening economy, people pay attention to that.

Me: Were you expecting such strong growth in what's usually a slow quarter for the industry?

BK: When you look at our success and that of "GTA," some of the seasonality is coming out of the business. When we look at our upcoming combo with Blizzard and the monthly subscription revenues from "Warcraft" and some of the reduced seasonality we'll get out of that too, it's really going to help from an investor perspective.

Me: What happened with DreamWorks Animation's 2010 film "Master Mind," which THQ is doing the game for? Are you not working with DreamWorks anymore once your deal ends?

BK: We have a long term deal that covers a lot of different franchises. With respect to all those things, we have big investments and commitments against them.

Our strategy generally has been more toward owned IP or proven IP. As the cost of game development goes up and the cost of marketing goes up, we have such a rich portfolio of owned IP that we're generally trying to stay focused on a smaller number of licensed IPs that are proven. With DreamWorks, we have so much confidence in what we’ve done and such great success generally speaking that we've been willing to take more risks on their unproven properties than anybody else. We view ["Master Mind"] as more of a one –off, isolated thing. It wasn't something that was going to be appropriate for our resources right now.

Comments

[nightwolf]

Hello BK,
U have done an excellent job....