Interview: Activision's Mike Griffith on Music Genre Growth, Tony Hawk, Game Seasonality and More

IndustryGamers: Let me start by asking you about this E3 in general.  This is the first big E3 in a while, and there was a lot of criticism about the past couple years from publishers about the state of E3 and the ESA took that feedback and here we are, almost back to normal.  What's your reaction to this now? 

Mike Griffith: It's interesting.  First of all, it's great to see everyone's response and enthusiasm for the industry and the games.  We're a lot bigger now than the last time there was a big E3, so we're really encouraged by the games we're able to show off; we're very encouraged by the crowd around our booth. I think we're encouraged by our competitive position that we've got going into the second half of this year, but mostly we're encouraged by the general industry enthusiasm that this has generated. 

Mike Griffith rocks out

IG: What's your take on how the new motion technology from Microsoft and Sony is going to change the future of this industry? 

MG: Well I think Microsoft and Sony's desire to get into the more physical interface that the Wii has established is not surprising given the Wii's success.  I'm sure they hope that it's an audience expansion vehicle for them to bring a slightly broader demographic into their franchises.  So I think it's, to some extent, predictable that that's the direction that they have chosen.  I think it will be interesting; it has an excellent chance of being well received. 

IG: Is that something that Activision was notified about months in advance?  I met with John Riccitiello and he told me he's known about this for 15 months and how EA's already been working on stuff behind closed doors for these motion sensing controllers and cameras and everything. Is that something you can confirm that Activision is working on? 

MG: Well, I think we knew about it for 16 months.  [laughs]  I can't really comment except to say that we have a very good and close relationship with the first parties and we're interested in planning for the future along with them. 

IG: In terms of strategy for Activision... you have some hot selling IP in Guitar Hero, Call of Duty and Tony Hawk has been reinvented with the new board from the Robomodo guys, but do you ever feel there's overkill in terms of too many Guitar Hero SKUs?  I think the Rock Band guys have a slightly different approach: they have a few different SKUs, but then they use it as a platform for DLC, whereas you have Guitar Hero: Van Halen coming out soon and Smash Hits, with Guitar Hero: Metallica and Guitar Hero: Aerosmith before that.  Instead of having that be DLC, you're physically creating another package for it, and I guess that's a deliberate strategy on your part because it generates more revenue than just DLC, but I'd like to hear your thoughts on it.

MG: First of all, the consumer has voted and we've outsold Rock Band four-to-one; we're outselling Rock Band 10-to-1 in Europe.  If you listen to the analyst side of things and the Viacom earnings report, it does not look like Rock Band is very successful financially.  So, you'd have to conclude so far, our business model has served the consumer and shareholders better.  But we're really encouraged by the response that we've been getting to not only this year's titles, but to the ones coming out, like DJ Hero and Guitar Hero 5. We look at it two ways. One, we've got about 15 million households in North America and Europe that are engaged with Guitar Hero and there's a thirst for more of their favorite music content and the next level in innovative gameplay surrounding that music.  So we've got 15 million consumers that are hungry for more that we want to keep satisfied, and that's the basis of the Smash Hits, of Guitar Hero: Metallica with those with a bend towards metal, and Guitar Hero 5, which is the broadest and most innovative lineup of guitar focused songs that we've ever had.   

And then you look at the opportunity, and in the same geography, there's about 300 million households, most of which enjoy music, and maybe not all of them will be gamers, but there's enormous expansion opportunity and that's what we're looking at things like DJ Hero to do and Band Hero. DJ Hero will speak to the club scene and hip-hop and rap in a way that we haven't even approached before; it's a fast growing genre in North America and it's huge in Europe... we haven't even touched it, and the consumer response will be phenomenal at E3.  You look at Band Hero, and that'll be our first 'E' rated title focusing on top 40 pop hits, family oriented, so again we think that'll expand the audience.  On top of that, we still do a fair amount of post purchase content: downloadable song packs, track packs, even albums. So we really see it as a balance between those, but we've been very encouraged by the consumer response to the slate that's coming out in the second half of the year. 

IG: I would imagine you'd disagree with those analysts that have said that the music game genre has peaked and that it looks like it's slowing down considerably?

MG: If you look at consumer sales, and you have to be careful not to look at our competitors lumped in with us, but if you just look at consumer sales of Guitar Hero, in the most recent quarter (March quarter), it out performed the entire software market.  So we don't see near term signs of fatigue for our business, and as I said, we've got the vectors of satisfying our large installed base of 15 million, expanding the number of households and international expansion where we're significantly underdeveloped relative to the rest of Activision's portfolio, but hitting the inflection point, with consumer sales nearly doubling year-over-year in Europe during the most recent quarter.  So we're really starting to hit our stride there, but it's still underdeveloped.  So I would have to say I do disagree with anyone that says that we don't have significant opportunities in front of us.