Activision's Revenues Mostly Based Upon Three Properties

By Brian Leahy, Mar 02, 2010 3:30pm PST Inside the same SEC filing that included information about an investigation into "breaches of contract and insubordination by two senior employees at Infinity Ward", Kotaku noticed an interesting bit of information about Activision Blizzard's 2009 profits.

A significant portion of our revenues has historically been derived from products based on a relatively small number of popular franchises and these products are responsible for a disproportionately high percentage of our profits. For example, our top three franchises, Call of Duty, Guitar Hero, and World of Warcraft, accounted for approximately 68% of our net revenues for the year ended December 31, 2009.

That is a large amount to be spread across so few properties. In fact, Activision just made some major cuts, some of which hit studios involved in the Guitar Hero franchise.

Activision, of course, recognizes the risk involved here stating, "due to this dependence on a limited number of franchises, the failure to achieve anticipated results by one or more products based on these franchises may significantly harm our business."

Interestingly, but not surprisingly, World of Warcraft has accounted for 98% of Blizzard's net revenue in 2009 and 97% in 2008 and 2007. This should change with StarCraft II: Wings of Liberty on track for a mid-year 2010 release.

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  • I often wonder how MMO revenue is handled by developers. Given the significant ongoing costs, I'd imagine that the financials for an MMO would have to be kept seperate from the remainder of a developer's assets to properly analyze and tracks profitibility.

    But then I wonder if an MMO's profits are then used by the devs to either fund or recover losses on other projects? Conversely, if an MMO is in the red, does a developer use income from other projects to keep it afloat?

    Basically, are projects managed as subsidiaries of the developer with their own financials? And if so, how big does a project have to be to qualify for being it's own entity, rather than bein included with other projects?

    Why do I wonder these things?