Activision isn't exactly hurting for money. Between the annualized blockbuster success of Call of Duty and the millions of people still paying a monthly fee for World of Warcraft, the company seems to be sitting pretty. But it doesn't want to stake its future on those successes, and has set other plans in motion in case they fizzle.
"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," reads an amended annual report. "For example, our four largest franchises in 2012--Call of Duty, Diablo, Skylanders and World of Warcraft--accounted for approximately 83% of our net revenues, and a significantly higher percentage of our operating income, for the year."
The report goes on to state that the "disproportionately high percentage" of revenues means they're dependent on those, and "failure to achieve anticipated results by one or more products based on these franchises may significantly harm our business and financial results."
To deal with this potential pitfall, the annual report claims that Activision will be taking a few steps: shifting toward digital delivery and supporting online communities like those surrounding CoD and WoW, looking into free-to-play models with microtransactions, and developing new intellectual properties. It cites Skylanders as an example of a new IP that paid off, generating more than $1 billion in worldwide sales so far. Its deal to publish the upcoming Bungie FPS Destiny is said to be its next large step.