The lights are on
Today's first quarter Activision earning's call was a straightforward detailing of current successes, planned moves, and smart caution. Throughout the 45 minute presentation, CEO Bobby Kotick and CFO Dennis Durkin returned multiple times to two key themes.
Kotick and Durkin tempered their first quarter success, during which Activision exceeded forecasts, by warning of upcoming challenges in the later half of 2013. Kotick cited a more competitive landscape, particularly due to "well capitalized new entrants." This may have been a reference to Deep Silver's significant growth due to the acquisition of Volition and the Metro series from THQ's asset auction.
Kotick also mentioned the upcoming challenge to Skylanders' supremacy. Disney Infinity is scheduled to launch in August, and while the two games are not directly comparable in terms of gameplay or approach, they will vie for the same market.
Activision also warns that the upcoming quarters will see lower performance relative to the same periods last year due to the absence of Diablo III, which was a huge boon for the publisher. In fact, Activision anticipates a slimmer slate of titles until the fall, but will take advantage of cross-generation releases to capitalize on existing adoption of current generation hardware and early consumer acquisition of next-generation consoles.
Kotick and Durkin also reaffirmed Activision's more risk-averse approach to business. Mobile still remains a lower priority, with a focus on fewer properties that can be maximized. This focus has seen the advancement of Skylanders and Call of Duty to the top two spots in North America and Europe.
Of note, Eric Hirschberg, CEO of Activision Publishing was tepid on the Wii U, even when speaking of Skylanders. No definitive statements about withdrawing support were made, but Hirschberg was clear that Activision wants to see sales of Nintendo's newest home console up and its retail price down.
Upcoming endeavors, which Activision also believes will be long term revenue generators and, therefore worth the investment, are Bungie's Destiny and an unannounced MMO from Blizzard. MicroDLC will continue to be employed judiciously and in a manner that provides user satisfaction without compromising the in-game experience for the broader player base. In other words, expect microtransactions to continue to be cosmetic when they are used.
Overall, it was a strong quarter for Activision. The guidance is reasonably cautious, but with the publisher carrying no significant long-term debt and expected triumphs for both Skylanders Swap-Force and Call of Duty: Ghosts, Activision looks strong.
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Great, if I need games that are just like the ones I already own I know where to go for the foreseeable future.
So business as usual, then?
I'm sort of surprised that Activision didn't really take part in any of the auctions of THQ. It isn't like they are strapping for cash or anything.
Shoot, with CoDs ever year, why on earth are they worried? I suppose it could be that the enormous advertising costs every year factor into the game budgets a bit, but
I can't wait to see more of Ghost, the tralier was interesting at least.
This is the reason I support Kickstarter and Indie funded games when all the big boys care is about profit it's a lose/lose situation for gamers and developers who want more than just "shooters" take your maximum profitability and long term relying on 2 franchises and stick them where the sun don't shine.
This is surprising, considering they will continue to milk the CoD franchise for another year straight. I wonder how "careful" they'll have to be when they have thousands upon thousands of dollars pouring in from that?