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Activision Blizzard CEO: Sequel-centric Strategy Has 'Worked Very Well'
by Nick Breckon, Nov 05, 2008 3:08pm PSTAs publisher Activision Blizzard reported better-than-expected second quarter revenue today, the company explained how its strategy of developing games within long-standing franchises has been its secret to continual growth.
"[Developing games with] clear sequel potential that can meet our expectations of 100+ million franchises, that's a strategy that has worked very well for us," said Activision Blizzard CEO Bobby Kotick.
Activision Blizzard's portfolio consists of such consistently-performing franchises as Guitar Hero, Tony Hawk and Call of Duty.
"I think generally our strategy has been to focus on the products.. that we know if we release today, we'll be working on ten years from now."
Kotick added that the difficulty in creating successful new intellectual property has been clearly established over the past 20 years, while noting that Activision's preferred plan is to innovate within existing franchises.
"If you have a pathway for innovation in existing franchises, that's a recipe for margin expansion," he said. "You still need to have production of new IP, but you need to do it very, very selectively."
"We happen to have a number [of new IP projects] in development ourselves, but the focus is to continue to be on the big, narrow, and high profile release strategy.. I think that we've had enough experience now that the strategy that we employ seems to be the most successful."
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As was seen with the release of Spore and how it dominated the charts (and still is). I'm sure Left 4 Dead is also going to make a huge impact on the market. I still know some gamers that haven't heard of it, but once the reviews hit with the title it will gather force.
Sequels make for steady income and are a good, secure, business model. Just what investors want. It only declines if something new and better comes along, which at this point, is very rare due to the constant sequels that are being spit out. However, when those companies finally have to make something new it usually ends up as a regurgitated mess of past titles because they can no longer think outside the box that has so well worked for them in the past, alah SC2 and D3.