Activision Blizzard is one of the largest gaming companies in the world, with numerous A-list titles such as World of Warcraft, Call of Duty, and Overwatch. Activision is one of three gaming companies ever to make the fortune 500 list, and presumably should be a forerunner in the gaming industry with strong titles competitively and for single player. Recently, however, the Activision part of the partnership has seen negative press generation, disappointing sales, and a stock price drop off far worse than even the S&P in this bear market. The question arises, if Blizzard’s risky Overwatch league seems to be doing well, why is this gaming giant suffering so much.
Those familiar with Activision will likely know the company for their titles in World of Warcraft and the Call of Duty series. However, for such a large company, Activision has released few titles that are recognizable outside of these, and even fewer than have generated fantastic sales. It would seem that in recent years, Activision has focused on carrying its well known franchises further with frequent releases. Unfortunately, this strategy does not appear to be paying dividends. The market share held by these few game series is shrinking due to a lack of innovation in the series and consistently dropping performances. Reflected in the missed sales benchmarks, Activision’s failures have finally caught up with them.
The bright side for Activision Blizzard is with the strong amount of capital the company has, reinvention should not be impossible. When looking at successful studios recently, a more popular model has come up. Instead of releasing a $60 game annually, an forcing consumers to buy back in for a title that won’t have any longevity, companies are releasing games for cheap prices or almost free. The majority of revenue in these games comes from inserting cosmetic in game items for money. This model has paid dividends on a massive scale for games like CS:GO, Fortnite, and Player Unknown’s Battlegrounds. Activision could easily decrease the frequency of these titles it releases, spending more time updating them and working on alternate titles. Leveraging their name with a new press drive, Activison could begin to quickly mend fences and avoid this downward slide which could quickly worsen.
At the current pace, it seems that software developers EA and Activision are losing out to smaller indie developers that are producing better, innovative content. EA’s terrible press and similar shortcomings have resulted in even worse performances than Activision Blizzard. It seems the future of gaming lies in long lasting competitive titles, and innovative single player titles that reinvent the player experience. A better understanding of this new age market is required for some of these larger studios to last longer in this incredibly competitive industry.
Michael O’Malley is a Business Administration/Theatre Double major sophomore at USC. He enjoys long walks on the beach, screaming into the abyss, and dancing with friends. He grew up in Birmingham, Alabama and does know how to read.