The lights are on
Veteran Member - Level 11
2010 has been touted as a wonderful year for gaming. Titles like
Final Fantasy XIII, God of War 3, Mass Effect 2, and a noticeable rise
in indie games as well as several other top notch games yet to be
released will find their way into the hands of gamers. There is however a
standout among the crowd of rising starts as Activision can’t seem to
get a break from being pimp smacked by life in general.
Earlier in the year the bold and enigmatic fiasco with Infinity Ward
that left the fans concerned over the fate of Call of Duty and
Activision worried about where fan loyalty will lie. Now, shortly after
Activision filed with the SEC, Activision / Blizzard are rumored to be
closing over half of the World of Warcraft servers by September 1, 2010
and adopting a new server structure powered by none other than Sony’s
PS3. This news comes just a month after Activision labeled the game as a
factor”. With growing concerns that the
title will become obsolete and the fear that they’ve become too
reliant upon the top earning title Activision has announced a new
direction for the IP that is hoped to retain the WoW crowd and expand
their base while allowing unrestricted lateral movement within the
World of Warcraft netted Kotick and Co. well over $711 Million
dollars by itself at the end of 2008, and $896 Million in 2009
(according to SEC filings). However Mike Morhaime (Co-Founder,
Blizzard), stated, “What ended up happening here is relatively in line
with a popular phrase by the late Christopher Wallace – ‘Mo Money Mo
Problems’; Kotick set a $1.4 Billion profit goal after Guitar Hero III
was the first game to break a billion and with WoW, we’ve never been
able to reach that goal. For all intents and purposes the game should
easily do this. He’s [Kotick] not, shall we say, ‘enthusiastic’ about
how this has turned out.” Morhaime continued, “I can’t say I’m looking
forward to the potential of being manhandled out of my office and being
kicked from a title I worked to create.”
Others in the industry believe that the lack of goal meeting ability
found within World of Warcraft comes from the total lack of ‘title
pimping’, a pejorative marketing term to describe when a publisher makes
a progressively larger profits on titles that get progressively worse
over time. It works primarily on the premise of branding and leading
gamers to believe something has quality on name alone, like Apple Inc.,
Louis Vuitton, or Mercedes-Benz. In short, a hollow status symbol to fit
a social status quotient; being a ‘poseur’ – like a tween looking
confused when they’re told that Misfits were a band, as they’re hanging
out in a Misfits branded piece of apparel (next it’ll be the belief that
NOFX is some quasi-joke reference to the Nintendo Wii). Prime examples
of “Title Pimping” are found among many Electronic Arts titles to
include Madden, NCAA football, Need For Speed, Medal of Honor and
Title pimping isn’t something that always works; take for example a
game franchise also on the chopping block: “Guitar Hero”. Between Guitar
Hero and Rock Band, the two can’t ever seem to really compete on even
grounds and have pushed themselves and each other into obscurity, if not
irrelevance as being a platform for associated artists to push their
music to gamers and sell MP3s than to really be a ‘game’ of
self-sufficient merit. This was something noticed after Harmonix left
developing Guitar Hero due to acquisition my MTV and Activision acquired
RedOctane who handed it over to Neversoft. Joel Jewett of Neversoft
explains, “Back in 2006, right before Activision took over publishing
Guitar Hero we were all invited to a premier screening of X-Men: Last
Stand. That day changed the company forever. I believe that Kotick took
the movie to heart when the next day he [Kotick] sent a mass email
stating that the goal for Guitar Hero was to have a yearly point release
in which new controllers and lineups would be a part of a boxed media
push alongside competitive track DLC numbers, and he closed with a very
disturbing “I’m the Juggernaut, b*tch”.”
So what does the future hold for Bobby Kotick and Activision? It’s
hard to tell from the rough start they’ve had in 2010.
I had the chance to speak to Kotick via conference call earlier this
morning. The conversation was an interesting if not a morbidly
enlightening (read: sobering) one.
Gordon(SG): I appreciate the time you’re taking, you’re the biggest man
in Acitivision, and faced with many problems –
Bobby Kotick (BK):[cuts
me off] I prefer the term “festively plump” and I’ll actually be
addressing that problem later privately.
SG: Well, I mean you’re a large figure within the company, a
company that has been fraught with a lot of industry criticism brought
to head by your SEC filing earlier this month and the Infinity Ward
me off again] Can we move past my weight? I don’t see how this is
SG: It isn’t, but now that you mention it, it’s sort of
uncanny that you share initials with Burger King…. Which is to say that
like the King of Burgers you’re… the… King of Activision and… you… both
have it your way(?)
You know, I can just hang up the phone and end this now if you like. I’m
a busy man with a lot of things going on. Either ask the questions you
emailed my secretary, or crawl back to your hole.
SG: (clears throat)…So, I hear Activision is working on a new
direction for the WoW IP?
We’re always trying to come up with new, exciting things in terms of
games. Right now we’ve got Activision / Blizzard working on a NATAL
exclusive title called “World of Warcraft Ancients: Well of Eternity
System NATAL”, or WoW WoEs
SG: WoW is a strong IP, and it sounds like you’re just
expanding upon it with the motion control gimmicks?
the title will have the story line of the World of Warcraft MMO and the
setting, characters and what not, but the mechanics are totally
different due to the platform and game timeline. There’s also going to
be little side things that players can do to increase their character
stats and so on, for example, a character that uses a sword has to be
physically strong right? Well, instead of only being good at the game
and understanding how to be effective in combat or spell casting,
players also have to physically train their characters using NATAL. What
this does is adds the element of exercise to a group of people more and
more doctors see as a target for obesity.
SG: So, you’re adding a Wii Fit / EA Sports Active side to
The idea is to find that happy medium where players can play their game
and still get healthy exercise.
SG: EA Sports Active was more or less a failure and Wii Fit
while it sold well isn’t something you see people talking about or doing
a lot of, especially in light of the BMI faults.
Well, we’re using NATAL so there’s no balance board or other peripheral.
We also have more movement based activities, like jogging and swimming
without a traner or someone else telling you how to do the activities. I
think that because the physical activities propel the player characters
into being better, players will see this as the competitive
underpinning and be able to mentally move past the idea of ‘work’;
players will talk about how many more pushups their character can do
(which is essentially how many pushups the player can do). There will be
items that give ‘help’ to players too, like potions that make pushups
done count as double.
SG: If I said “bloated”, would that mean anything in context
to this conversation?
going to give you benefit of the doubt and assume you’re not talking
about my waistline again and patiently wait for the next question.
SG: Tell me about World of Warcraft. Rumor has it you’re
planning on scaling it back based on its “Risk Factor”, fear of
obsolescence, and talk of being too reliant on the success of the title.
What makes it a risk, how do you fear it will be obsolete, and do you
personally feel Activision relies too heavily on the income from the
of Warcraft is a great franchise, but it relies on popularity. If
people lose interest in the game then we’re still spending the same
amount of money to maintain servers. Over the past few years we’ve seen
increase in profits but have still fallen short of our goals. There’s
not a single reason that our goals weren’t met in 2009 other than we
feel the title is losing popularity – not much, but if it trends down
then it could be very bad.
SG: So, you do rely on WoW pretty heavily?
rely on it in terms of what it is. If I woke up one day and found that
everyone canceled the account, we’d take a big hit but it won’t tank the
SG: Let’s just say you did wake up and found the game servers
void of paying people?
won’t happen, so I don’t think about it. Hypothetical situations are
fine in moderation, but let’s not get outlandish.
SG: Well, what I’m getting at is do you feel Activision /
Blizzard is too reliant upon WoW and how so?
I said, we rely on it based on what it is. I think the level of
reliance has merit in context to the titles financial contribution and
level of popularity among gamers. But, if the popularity trended down
and player numbers decreased, then we’d have to adjust our stake in it
and retool the business plan concerning the game.
SG: Like you’re doing now?
What we’re doing now is simply taking the title to a new platform,
adjusting cost structure and developing the game to fit the upcoming
generation of gaming. What you see as devolving is what we in teh industry call "progression."
SG: Do you feel that NATAL is ‘the wave of the future’?
think NATAL is a wave of a future,
but not the wave of the future. It’s a
good concept, and like most ideas their merits are dependent upon when
solid execution has been realized. This is why we chose NATAL over the
Wii. The Wii is a good idea, but lacked a lot of core execution aspects
that make is attractive to anyone above a mediocre group of entry level
SG: Did I just hear you right in that you more or less called
the Wii “***” and that the only people who develop for it are
just saying that the Wii could be more. Nintendo sold the world less
than their best, and there’s nothing wrong with pointing that out.You heard "A Pig is a Pig is a Pig", right? Call the Wii what you want, see it how ever you choose, but it's a Pig regardless.
SG: And the ‘losers’ part, didn’t Activision port “COD: MW
Reflex” to Wii?
and other developers and publishers have trouble realizing a product on
a system that stunts development beyond conceptual plans. That doesn’t
make them losers as developers or people, but it’s a losing endeavor. If
you look at Call of Duty: Modern Warfare, it was at the time ‘near
perfect’ on PC, XB360 and PS3. The version released on the Wii was rated
far below what we’d accept as ‘good’ with between a 70-80%.
SG: All things considered 70/80 isn’t bad. Why put that down?
rely on this line of work to live and allowing ourselves to accept less
than the very best we can do is unwise. Scores like 70 and 80 are what
you’d shoot for with a kids game or if it were the first game that
someone developed on a major console. [COD: MW] Reflex was more of a fan
SG: So, you did it all for the nookie?
SG: The nookie.
don’t know what a ‘nookie’ is; I’ve never seen one.
SG: Um, ‘nookie’ is a kind of… a “target area” serving as a sort of strategic goal for a particular “target
then yes, we did it with a certain group of people in mind.
SG: Right, so going back to WoW: WoEs – if you don’t feel
that Activision / Blizzard has become too reliant upon WoW, why are you
scaling back the servers?
I said, World of Warcraft is a great franchise but our 2009 profit
goals weren’t met. We’re going to have to increase the subscription fees
despite the server closings to maintain the profit margins and we’re
looking into porting the title to consoles in early 2011. In the
meantime, with the losses at Infinity Ward, we expect a large financial
hit and we have to be prepared for that. We’re in a place where we need
to stop relying on World of Warcraft too much. We’re not relying on it
too much, but we need to avert the chances of it, you understand.
People like to believe that we’re in the business of games and that
gaming is a culture. We’re not and gaming is no more a viable culture
than the International Association of Beef Inspectors. Let me be clear
on that. I love video games, but only because they make money – if
topiary made as much or more money, then I’d all about selling
shrubbery. Isn’t that why people make and sell games, for the money?
SG: But, what makes it a risk?
you play World of Warcraft?
SG: I was taught to say no to drugs.
even tried it?
SG: Drugs or WoW?
SG: Single player campaigns on physical media are my
anti-drug; that, and quality.
it’s a risk because continuing investment in games that rely popularity
via the community interest level is always a risk. What if the game
becomes stagnant or a publisher other than Activision or one of our
subsidiaries dilutes that particular genre? Can you see how that’s
SG: Yes, in a way. What about the adage “build a better
mousetrap”? Couldn’t Activision just, I don’t know, make the game better
– more quality instead of quantity? There’s a handful of add on packs
for World of Warcraft, but they haven’t added much honest substance to
the game. What incentive does anyone have after they reach the level
cap, the carrot no longer dangles, right?
you mentally deficient?
SG: I prefer the term “practical thinker”.
SG: So your point is that WoW is a risk because Activision/
Blizzard is unwilling to ‘build a better mousetrap’ and that the
philosophy is that it’s better to “Sherman’s March”, destroying all in
your path than to build upon and redefine or expand upon working
dynamics or listening to what the people who invest and play your games
have to say?
not at all. Like our competitors we take developers and other
publishers under our protective wing and help direct them during the
process of top quality games. We don’t see problems in what we do
because numbers don’t lie. 12 Million copies of [Call of Duty:] Modern
Warfare 2 sold in record time – and while people complained about
glitches and what not, they still bought it. There’s no reason to change
what we’re doing with those kinds of numbers. We hand pick people from
our audience of players and invite them to provide feedback, and hours
upon hours go into to caring. This costs a lot of money and nothing says
“care” like money. See, we listen to them, but at the same time it’s
important to understand that they don’t know what they’re talking about.
We do, so more often than not we take into consideration that player
experience is only about 10% of what needs to be thought of. The other
90% is what you get the player to believe they’re experiencing aside
from what they’re actually experiencing. Take MW2 for example; players
believe they’re having a grand time playing WITH each other, but the
game isn’t designed for team play – in truth they’re playing AT one
another but ‘multiplayer’ is sort of this abstract noun that obfuscates
the line between AT and WITH. They don’t care what they’re doing… all
they know is that they have this game that everyone else tells them is
fun or supposed to be fun. They go buy it and hit the snooze button on
reality in order to keep that dream alive. You can’t tell me that this
isn’t a great idea – it is. 12 million people can’t be wrong.
When we’re talking about World of Warcraft, fear of closing down what
millions upon millions of people play daily, have devoted years of their
lives to, invest thousands upon thousands of physical currency towards
will reignite interest. Telling someone that what they want will go away
creates urgency and I expect to the see Internet full of our supporters
anxious and supporting of the move to NATAL in an effort to hold on to
the dream of WoW. We can’t afford to keep those servers up and still
bring them the established list great franchises we have. So what we’ve
done is we’re cutting the servers down by 50% and increasing the
subscription fee. This also allows us to be less reliant upon the title
so that if it does eventually fold and we close shop on it, we’re making
up potential losses in advance and keep us from becoming too reliant on
SG: Tomatoe, tomato. Still, do you honestly think this won’t
result in a counter-campaign by fans of other popular MMOs like Final
Fantasy XI / XIV, Guild Wars, and so on?
What they [fans] don’t get is that WoW is the model MMO that so many
other franchises have desperately tried to aspire to and succeed. It
redefined any and every thing about the genre. We’ve got the market by
the balls in several areas, MMO games being just one of the few.
SG: Are you afraid that it will eventually serve the purpose
that MW2 and Guitar Hero does, and become a shining example of what NOT
really don’t get where you feel that we destroy things or how we did
wrong with MW2. I can’t really comment about the mess with Infinity Ward
and what’s happening with MW2, but everything we have people want. I
think you’re confusing producing poor titles and pigeonholing the
consumers into buying it with supplying peoples’ demands. MW2 is
heralded by consumers possibly the best game ever made, despite its
problems and known errors it continues to sell. How can anyone argue
with that? Where is the lack of ‘cool’?
SG: I’m of the opinion that it was a busted game out of the
box. It could be hand delivered to me by the Playboy model of the year,
wrapped in crispy bacon and soaked in Crown Royal XR and still not be
awesome. Not because the game couldn’t be fun or that it isn’t fun, but
because you published a largely unfinished game riddled with defects,
glitches and imbalances, and then had the audacity to be proud of it.
The technical aspects lost impression over the flawed surfaces. Even a couple of days ago the "Stimulus Package" was broken. Was that some kind of political message, releasing it broken? Let’s
all celebrate mediocrity! It totally contradicts your previous
statements about the Wii. Isn’t that a sort of double standard?
I said Shawn, we publish what people demand; perception is context,
right? Sales numbers indicate that the game was awesome, or awesome
enough to continue to outsell any other major title to date contrary to
your opinion. As for politics, I don't get involved. Money in, money out - that's my primary concern.
SG: You recently moved to stop further production of the fan
made King’s Quest, but also announced a sequel to DJ Hero. If perception
is context I have to ask, why in the hell would you return to something
that is the music version of Tony Hawk Ride (Bravo on that by the way)
and shitcan something that helped define an era of PC RPG titles?
thanks, not many people liked “Ride” as we had hoped, but we’re working
on making that IP better over time. I’m glad you enjoyed it.
SG: Actually, I didn’t enjoy it. I think they call what I did
“sarcasm”. I’m not sure.
Are you sure you don’t mean “Nefarious”?
SG: No, I meant ’sarcasm’, at least that’s my perception of
it. Perception is context right? You just called the Wii a "pig" and said that it is a "pig regardless" in context to what other people thought (sigh). So, what’s the point of canning a great
title and promoting one that is, for lack of a more fitting friendly
term, a “subpar” title… in context to other IPs that Activision oversee?
I stated earlier: numbers don’t lie. The DJ Hero numbers emasculated
the numbers for all of the Kings Quest game sales, ever. The series
[King’s Quest] officially ended in 2002 when the series lost popularity.
It’s a huge risk to bring it back. With RPG games having evolved over
time, it’s not going to adequately compete with other popular RPG
franchises. Even if it [King’s Quest] sold well, how do we wean people
back off of it? It could potentially cost us more money to wind it back
down than to wind it back up, thus it’s just a poor investment. With DJ
Hero the game is still fresh in people’s mind and a lot of people see
potential for it to grow and get better. There’s an established set up
using modern technology. Building on to something is a lot cheaper to do
than to blow the dust off of an old idea that a group of fans tamper
with; it’s just harder to retain control and direction, so we clamp down
on it. Aside from that Sierra owned the IP for King’s Quest, and
through our merger with Sierra, we own that IP. If we want it stopped,
we stop it – end of story.
SG: I guess that makes sense, but-
me off] But the math works, and that’s what we’re going to do. It’s [DJ
Hero] a premium title that brings exposure to other industries,
companies and artists. And to get into the emerging culture of gaming
they’ll have to be funneled through us. Let’s move on from this back to
the NATAL WoW: WoEs.
SG: I apologize *cough* Caligula *cough*.
have to go here in 10 minutes so let’s wrap this up.
SG: Okay, I only have a few more to go anyway. Your cost structure for WoW WoEs; you’ve hinted at
increasing the subscription fee. If you’re also decreasing the number of
servers how can you justify increasing the price to play?
as you know, I’d prefer to charge the absolute maximum I can get away
with for about anything we have. Money is the name of the game and I
make no apologies about this mindset. It’s what has fed the family of
thousands of our employees. If Microsoft can charge a fee to deliver
normally free third party services, Apple can tack a full dollar to add a
digital CD booklet and a marginal audio difference then we should be
able to do the same. Most of this is all social experiments and pushing
it as far as people allow you to. The market won’t ever allow a company
to charge more than can be afforded, so if we push hard enough we’ll
immediately know our boundaries and operate within the largest area
I’d love to charge a subscription fee of $100 a month. Some
people can actually afford that, and WoW has been around long enough,
contains enough users who’ve spent enough time and effort into a
character that people would honestly choose to pay $100 a month to play a
game. Not only does WoW generate real revenue for many players, but the
popularity continues to generate massive wealth for Activision/
Blizzard. By injecting a higher price, we encourage competitive markets.
We live in a time of ‘pass / fail’, and people will have to not be
willing to win, but not be willing to lose.
SG: But can you really charge $100 a
month? I’m fairly certain there’d be a massive user uprising and
boycott, and that would have great affect on server hosts.
not going to charge $100. That’s too abrupt of a jump from the current
cost structure and consumers wouldn’t make a leap that large. It would
be like jumping over a manhole to jumping the Grand Canyon in a single
step progression; you have to build up to that kind of thing over time.
Realistically we’re looking at a quarterly and yearly subscription
closer to $150 a year and $50 a quarter and getting rid of the monthly
structure because a monthly structure doesn’t retain people as well as
yearly and quarterly.
SG: But you’re also
removing 50% of your servers which means less physical space and much
smaller bandwidth to carry an unchanged footprint. I’m still a bit
confused here, could you explain it a bit better to me?
BK: Some of that has to do with the
kind of servers that will run the NATAL version of WoW. We’ve opted to
use servers powered by stacked PS3 consoles. You’ve seen the Warhawk
server stacks right? The PS3 has a ton more computational power than the
360 and since we’ll avoid the 3.21 FW update it’ll be a just as secure
as any Linux server since we’ll install Novell SuSE. On top of that,
buying a couple thousand 250GB PS3 is a lot cheaper than renting out
dedicated servers. Our bandwidth cost will be decreased because we’ll be
paying for bandwidth used, not bandwidth and hardware.
SG: You don’t find it ironic that a PS3 will be powering a
largely PC title, on an XB360 – and – ‘couple thousand’?
is data, wires don’t care what they’re connected to and on a base level
all consoles and computers receive the same data. The difference is
their interpretation of the data and how that base data is compiled,
decompiled and then recompiled. linux is flexable and a great median OS
to talk between the two different frameworks.
We’ve already acquired the PS3 consoles for our servers back in
November of 09.
SG: So, we can blame Activision for the current PS3 console
There wasn’t a shortage when we placed the order and we have no control
over the manufacturing process of Sony and their products, so I don’t
think we can be held accountable for that, no.
SG: Fair enough. I guess as long as it works and is stable,
the end user won’t much care, but what about Sony and Microsoft, won’t
they have an issue with this?
money talks. Why do you think we over charged for the MW2 stimulus package?
SG: So, part of the subscription price hike covers the
license to do this as well as bloated DLC prices?
in a manner of speaking yes, but it’s not the front end purpose. If
people want the game to live on and expand it has to be adequately
funded. A secondary purpose is the manner of delivery, which has a high
cost as well.
SG: Are you planning on eventually moving the series to a
this time, no. Sony’s version of a motion controller “Move” doesn’t
mesh well with the mechanics of the NATAL version, so at this time NATAL
is what we feel to be the best option. If we moved it to the PS3 we’d
have to actually take a step backwards, and thus have a much harder time
justifying equal pricing.
SG: This is all somewhat confusing. I think the audience will
have a hard time wrapping their mind around what you’ve said here
today. Could you maybe expand on the point of a PS3 run server?
no. I can’t. I have a meeting with Mike Morhaim, so that’s all the time
I have for you. I enjoyed the time; maybe we can do this again in the
future. Have a good day, bye now <click>
Kotick, as much as I really don’t get a lot of his ideas and plans,
actually sort of makes a lot of sense in a business mindset. Though, I’m
disturbed that to a degree gaming as a culture doesn’t exist to him –
we’re like a mirage as a culture, but very tangible as a source of
tappable income – “tools”, if you will. More distressing is that a
growing number of people in his position or close to it tend to believe
that as long as we’re distracted by the illusion of the gaming culture
and moreso by the illusion of their genuine concen, we won’t catch their
sleight of hand tactics. If this is true, they’ll eventually be correct
in that gaming culture is a myth. In the end, we’ll have no one to
blame but ourselves.
Still, the advent of WoW: WoEs, is… marginally exciting. I’m not a
huge proponent of the motion control technology and see it as a failed
gimmick that the industry won’t let go of because of the money and time
already invested (like 3D), but the concept alone, being able to
translate an MMO RPG into something that people physically do is neat.
On the other hand, it’s not much more than being charged to ARP (since
players aren’t really doing anything “live” I can’t very well call it
I think I’ll have to sit on this for a hot minute and contemplate the
rationale behind this… there’s got to be something I’m missing in the