Seems like they can’t get a break: the world’s largest video game publisher, Activision-Blizzard, continues to rack up legal fees and severely negative press. Let’s break it down:
- Bobby Kotick lost another round of legal fights and now owes attorney Patricia Glaser $1.42M in fees, stemming from a sexual harassment suit filed by a flight attendant on his private jet.
- Uniloc USA filed suit against Activision for patent infringement relating to copy protection and DRM software.
- World famous Pro Paintballer Greg Hastings spilled the beans to the press about the lawsuit he filed against Activision regarding his upcoming game.
- Leigh Alexander laid out in excruciating detail why and how Activision avoids female lead characters.
- Word has reached us that Activision-Blizzard may have laid off more staff on August 4th as well.
Yet more release delays. Maybe they should rename themselves Call of Duty-Blizzard?
More game delays were announced today as well; True Crime: Hong Kong has been pushed back to 2011, away from the lucrative holiday season. There was no reason given for the unexpected delay, but it’s likely to have a negative impact on sales. Further dragging down True Crime’s sales may be the negative publicity after it was revealed the main character had been changed from a female to male. On top of that, Blur and Singularity were both described as “underperforming.”
They also revealed that channel and online are now outpacing retail sales. The primary drivers of revenue were World of Warcraft, StarCraft II, and more than 20 million sales of Call of Duty map packs. Investors have expressed concern that StarCraft II’s sales won’t live up to expectations, despite moving more than 1.5 million copies. There’s also persistent rumors that upcoming Call of Duty games will become a subscription model like World of Warcraft and other online games, something that has never been tried before.
The way Activision-Blizzard describes things, the bulk of their business is Call of Duty and Blizzard’s franchises. Everyone else is merely an “also ran” that they took pity on, and gave a chance to fail or succeed. Bobby Kotick’s focus on the bottom line is is starting to look beyond obsessive and into the fanatical, and only these two assets seem to satisfy his need for profitable games. Infinity Ward’s remaining employees, as well as a number of new hires, are already working on a sequel to Modern Warfare 2, and another development house is working on an action game set in the Modern Warfare universe. World of Warcraft’s Cataclysm expansion, originally slated for a first half 2010 release, is still expected to launch some time this year but exactly when remains a mystery.
Another profitable quarter; time to lay some more people off?
Activision-Blizzard (ATVI) shares were off over 6% when news broke that second quarter adjusted revenue came in at $683M, disappointing investors, but with adjusted earnings of 6 cents a share. For next quarter, they’re expecting earnings of 8 cents a share on $725M of revenue. This translates to a 12% increase in profits despite a 12% decrease in video game sales. One of the factors driving this is a 19% drop in their expenses; otherwise known as employee paychecks, office supplies, rent, marketing costs… you get the idea.
David Hoffman, Director of Business Development and Executive Producer at Square Enix hinted at trouble when late last night he tweeted his sympathies to a number of employees who had just been laid off from Activision. David didn’t name names, or numbers, and when queried further would only say that it wasn’t his place to say. Other than a small number of employees let go at High Voltage Software, we have been unable to obtain confirmation of significant layoffs yet, or an indication of the employees and projects which may have been affected. If any readers can provide further information, we’d love to hear from you in our comments section below.
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