Activision’s Destiny Missteps Are Common Business Wrapped In Terrible Communication

It’s been a rough week for Activision and Bungie. While The Taken King garnered attention at E3, what followed was poor messaging about a collector’s edition, exclusive in-game emotes, and a belief that players are being forced to buy content they already own.

In order to understand where this started, we must first look at the many different price points at which The Taken King will be sold.

• The Taken King expansion - $40
• The Taken King: Legendary Edition (Includes base game and two expansions) - $60
• The Taken King: Collector’s Edition (Legendary edition contents plus physical items, in-game emotes, and armor shaders) - $80

The furor started in an interview with Luke Smith, director of The Taken King expansion. In speaking with Eurogamer, Smith defended the contents of The Taken King’s Collector’s Edition. Right now, that’s the only way to get the emotes and the armor shaders.

Players are upset that the Collector’s Edition includes base content and the two previously released expansions. Those that have been playing from the beginning don’t need or want those.

Smith’s response was at first glib, “poking” at the interviewer who suggested he would like the opportunity to purchase emotes as micro-transactions. Smith seems to delight in this, suggesting that if he showed the Eurogamer interviewer the emotes, the journalist would “throw money at the screen.”

Later in the interview, Smith gets back on point. The earlier statements have done damage though, and have been re-reported for the past 24 hours. Smith makes a good point about the time-value of content and why a collector’s edition needs to onboard new players.

“This autumn we want to have a moment of convergence where players like you and me who are engaged with Destiny can match up with people who are just joining in, who didn't pick the game up last year for one reason or another,” Smith says. “It's also important to remember the temporal valuation of content. If you played during The Dark Below, you were playing when there were Swordbearers everywhere. That's now gone and you can't recapture that now. Some things are being left behind as we move forward.”

There are two issues at play here. The first is that old content is bundled with a new collector’s edition. The second is that there are exclusive emotes in that top-priced version. Activision has walked the "personalization pack" path for years with Call of Duty. If it plans to implement that practice for Destiny and sell emotes as Smith implies in the Eurogamer interview, now's the time to be up front about it and ameliorate some of the understandable consumer frustration.

Those things are being conflated right now, and it’s important to parse them to understand where the frustration is coming from. Activision isn’t necessarily making bad decisions, but the communication is poor.

First, from a publisher perspective, Luke Smith is a content developer. There are a lot of things he can safely speak to: the gameplay in the Taken King, how Bungie interacts with fans, and what lessons Bungie is taking from Destiny’s first year to improve the experience moving forward.

Collector’s editions are not developer-driven, though. They are marketing items, often steered by the publisher. Because they are marketing-focused, their value isn’t in revenue, it’s in visibility. Publishers have told me (as recently as this E3) that margins on collector’s editions are negligible, some as low as under $1.

For that reason, Activision needs to make sure it has a production quantity that keeps cost down. It also needs to ensure that these sell and aren't held in inventory. By including the base game and first two expansions, the collector’s edition becomes a consideration for those that have not yet played Destiny (or might be re-buying across console families). Without the base content, the collector's edition appeals to a subset of existing players. With that older material, the potential market instantly includes anyone with a PlayStation 4 or Xbox One.

Activision is increasing the value of the collector’s edition by including older content, but there is a misinterpretation that this added value is necessarily driving up the cost of that bundle. Part of the problem is that the legendary edition is leading consumers to believe that the base game and existing expansions have a $20 cost and, therefore, a $20 value. 

The added contents of the collector’s edition obfuscate that assessment of cost and value. While the value might be constant across these two bundles, the itemized cost to the consumer is not necessarily consistent. In fact, given that Destiny and both expansions are now “catalog software” (games sold outside the first quarter of launch), Activision has greater flexibility in terms of assigning cost.

The problem is that Smith’s statements only reinforce the perception created by the legendary edition pricing. He goes so far as to create a scenario in which the added content begets a perception of decreased value. 

In other words, Smith should have deferred the question about the contents of the Collector’s Edition to Activision. He was safe in talking about the “point of convergence,” because that’s exactly what the legendary and collector’s editions offer. 

These are ways for players to buy in and hit the ground running with up-to-date content. But allowing the interviewer to set the message of “rebuying old content” has caused an enormous communications problem for Activision. The interviewer did his job, but Smith is likely headed for an intense refresher on media training.

That scenario has continued to play out over the past day, with a new spark reigniting the fire this morning. Activision confirmed its Red Bull partnership (originally leaked at the start of this month).

This isn’t the first time that Activision has partnered with a soft drink company. Call of Duty and Mountain Dew have become synonymous in the lead-up to each year’s release, offering bonus experience.

The Red Bull deal has another wrinkle, though. There will be an exclusive in-game mission after The Taken King launches. You’ll be able to access it using a code from marked packaging, and that’s obviously a big focus of the communications.

However, buried near the bottom of the press release is a note that this content is a timed exclusive. Beginning on January 1, 2016, anyone can play the in-game missions without a Red Bull code.

Activision is in a tricky spot. It wants to promote the Red Bull partnership and give people a reason to get those codes. It can’t be as overt about the nature of the timed exclusivity. In fact, it’s our job as media to read the entire material and convey those details so readers have full information.

Unfortunately for Activision, the timing on this is terrible. Announcing this hot on the heels of the Luke Smith debacle is just another log on the pyre. 

I suspect that Destiny will weather this storm. As more information about The Taken King is revealed, players will become more enthusiastic. However, these stumbles need to have a material impact on how Bungie communicates with its fans.

Activision will need to work that much harder now to justify the $40 price tag for the expansion, especially given the stumbles of both The Dark Below and House of Wolves. In many ways, The Taken King is a tipping point. Players expect it to introduce sweeping changes that fix the game’s longstanding problems in big ways.

If all that’s on offer is a slightly larger expansion at twice the price? Guardians might very well start hanging up their gunbelts and hopping the first ship out of the galaxy.

Update: Since publication, Bungie has directly addressed Smith's comments and created a way for existing fans to get the digital items. For more on that, please read our follow-up story.