IndustryGamers - Informing the Games Industry

To play Kotik's-advocate, maybe their actions weren't wrong from a purely financial standpoint.

Let's put it in terms Activision would understand...

You're playing Starcraft, and you come across a rich Vespene gas mine in disputed territory. Do you send your drones in and mine the shit out of it as quickly as possible before someone else finds it? Or do you setup a remote base and protect it and mine it slowly, nurturing it in the vain hope that it will produce forever?

Drone rush ahoy!

Excellent analogy

David that's one of the best things I have read of you so far! It actually made me register so I can post a response.

I'm curious about something, and perhaps somebody can enlighten me. I presume Activision has stakeholders? If they do, usually in my country something called a stakeholders meeting is held every year or more. Wouldn't something like this paint a bad picture for the current "brass" (you call it?) at Activision. I would suspect something like this to have repercussions higher up in the chain. However, I have not read anything about it yet.

It could be they are keeping it under a tight lid of course.

Jasper

Shareholders only care about the bottom line. As long as Activision's strategy is bringing in the cash to hit their goals and make shareholders happy, they wouldn't care HOW badly they treat their talent.

At least until the point of violating sweatshop labor laws.

EA went through a brutal period recently where they missed their goals several quarters in a row, and pressure from the shareholders definitely seemed to force their hand in changing some of their business practices & focus.

Until Activision's behavior impacts the bottom line (at least a couple years until we see whether the CoD franchise is damaged by this in the long term), don't expect any shareholder uproar.

Activision's losing money despite the Blizzard money machine and the massive Modern Warfare sales; this does not speak well for their management. (Then again, EA's lost money 12 quarters in a row... big publishers are not doing well overall.) The management would like to believe that individuals are replaceable, which may well be true much of the time; but sometimes, it's not. We'll see if Infinity Ward can continue to crank out hits after so many key employees have departed.

There is speculation that a desire to keep stock prices high (and thus keep shareholders happy) was behind Activision's reluctance to pay the bonuses to Infinity Ward... because Activision didn't have ready cash on that scale, and would have had to borrow it, which might have depressed the stock price. Why aren't shareholder's running for the exits after all of the bad press? It probably has to do with Blizzard, and their upcoming releases (which promise to be huge), more than confidence in the rest of Activision's lineup and their management.

Good points Steve. Without Blizzard, I think Activision would be in some serious trouble now.

Activision seems to be only about the short term exploitation of the brand, and not building what they have. They're more poised to destroy a brand and then just buy up the next big thing from outside their waters. Unfortunately for them, EA is in the next phase and is actively looking to build new IP.

ah, i love Penny Arcade...

I’ve been idly fantasizing about looking for a Developer Relations job at Activision. (Not that I actually need or want a job, but just to see if I could do it. . . )

I started my game career at Activision in 1997 when it was super-fun to work at the company. Management, and especially including Bobby Kotick, told us and really *acted* like they wanted to create a fun workplace where employees could express themselves in a supportive environment and be rewarded.

Plus, I *like* developers. I’ve worked with them since starting at Activision and very shortly learned they are super-cool, super-smart, awesome people that are great to work with. I’d love to help them create the best games they can while enjoying a supportive and mutually beneficial role from their publisher. . .

Amy I crazy? Would I be talking to the wrong people? I’d like to think that’s exactly what Developer Relations people at Activision try to and intend to do, but the recent press makes it look like they may have been downsized or something. . . ;-)

Is this the norm in the industry right now and Activision is just getting the brunt of the bad press, or is the problem endemic and has been for a long time?

The game industry has matured incredibly in the last ten years in terms of good business practices, but in all ways, we still have a lot to learn. What can be learned from this? Can we get a “postmortem” of sorts on the ATVI/IW relationship?

(P.S., It's sad to see the Penny Arcade comic, even though it's brilliant. I initially thought it was a comic copied from another publication about the banking industry or something, but the "Activision" logo in the background changed my mind. . . )

@ Steve Petersen: Uh, I think you meant to say that ATVI is only making money because of Blizzard and the COD franchise. ATVI had a negative net income last quarter due to a 400m+ write down, but they still made a significant profit for the year. They also have a 3.5B war chest, larger than any other publisher.
I am no fan of ATVI's practices, but let's give proper credit where it is due - they have been making money. And a lot of it.

Daniel's right, looks like ATVI actually lost $286M in the holiday quarter, but on an annual basis they remain quite profitable. And they've had like 16 or 17 years of consecutive revenue growth, I don't remember exactly.

Awesome read Dave!

Thanks for the insights everybody.