Call of Duty franchise is “review-proof”

Low critic scores won’t harm sales, but Titanfall and Destiny may pose threat.

Media reviews of the Call of Duty franchise have no impact on sales of the games, as critics become bored of analysing the latest in Activision’s yearly first-person shooter release.

That’s according to Doug Creutz of Cowen & Company, who notes that while Metacritic scores for Call of Duty: Ghosts are hovering around the 74 per cent mark they come too late to influence pre-orders and pre-sales figures.

“We think CoD has become such an embedded franchise that it is somewhat review-proof,” he said. “We think of CoD as being like EA’s Madden NFL, which continues to sell similar unit numbers year in and year out, regardless of reviews; Madden’s Metacritic has ranged as low as 78 in recent years.

“Given that CoD changes only incrementally from year to year, we think reviewers have become increasingly less likely to give very high review scores due to a certain degree of ennui with the franchise.”

He also suggested that Call of Duty’s main competitor – EA’s Battlefield 4 – “didn’t exactly cover itself in glory” with an average Metacritic score of 80 per cent on Xbox 360, but again, reviews are unlikely to impact sales.

The biggest threat to Call of Duty and Battlefield’s dominance is likely to come from new IP next year, with Titanfall and Destiny pretenders to the throne.

“Our concern lies more with next year, when Call of Duty will face competition from several new next-gen shooters, including EA’s Titanfall and Activision’s own Destiny,” said the analyst.

“To the degree that Call of Duty may become a bit of a ‘been there done that’ experience for gamers, we think it is vulnerable to losing share as new product enters the market; even if a lot of that share goes to Destiny, as a third party title it will carry a lower margin for ATVI, and we think bullish 2014 EPS estimates assume Destiny will be more incremental than cannibalistic.”

 

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Activision Publishing CEO doesn’t want games to mimic movies

Eric Hirshberg says the medium is best suited to fantasy fulfillment, new consoles will fit right in with average user’s “multidevice daisychain”.

The non-stop bombast of a typical entry in the Call of Duty franchise may invite comparisons to the work of blockbuster film director Michael Bay, but Activision Publishing CEO Eric Hirshberg is wary of making games that mirror movies too closely. Speaking with Edge, Hirshberg said that was a trend he wasn’t interested in chasing.

“There’s this strange desire to morph games into movies or have them behave more like movies,” Hirshberg said. “I don’t share that desire. Games are wonderful as they are and do different things better than other forms of media.”

Hirshberg said the strength of the medium is in transporting players to experiences they can’t have in their everyday lives.

“Sometimes that’s driving a fast car, sometimes that’s being a professional athlete, sometimes that’s being a rock star, sometimes that’s being a hero or going into a fantastical future,” Hirshberg said. “I think this is inherently what games do best and so I’d expect that to be the basis of games for a long time to come.”

The executive also talked about hardware, specifically the new consoles set to launch next month from Sony and Microsoft. While the Xbox One and PlayStation 4 will allow developers to create more detailed graphics in their games, Hirshberg said the real innovations from the new hardware would arise from their designed integration with social services, smartphones, tablets, and other technology that simply wasn’t around when the Xbox 360 and PlayStation 3 were being designed.

“That whole suite of things we now can’t get through a day without didn’t exist when 360 and PS3 were launched, therefore they weren’t designed to particularly work well in those ecosystems – how could they [be],” asked Hirshberg. “Now the next generation of consoles is being designed to slot right in to be a part of that multidevice daisychain that we all have.”

The full interview with Hirshberg will be included in the new issue of Edge Magazine, which goes on sale today.

 

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Activision Deflects Its Haters

 

Eric Hirshberg is Activision Publishing’s CEO, and is responsible for selling some of the biggest game series in the industry. He’s also a frighteningly smart and confident interviewee; he answers our questions without hesitation and, in particular, bristles when we suggest that Activision might be considered by some to be an uncaring corporate giant, singling out former internet antichrist Bobby Kotick for special praise.

Hirshberg’s right; it’s wrong to portray Activision as a videogame giant wholly dedicated to exploiting its franchises for financial gain – in Destiny it is investing heavily in an ambitious studio and fresh game concept and Skylanders is a new phenomenon entirely of Activision’s creation. It is a smarter company than many credit it for, and in Hirshberg, as you can see below, it has a focused, determined leader.

What’s the feeling inside Activision right now about the indie scene? Are you aware of this kind of creative renaissance that’s going on, and do you think it affects you in any way?

I think it’s great for the industry and I think it’s great for the creativity of the medium. I think if you look at every other art form there’s room for blockbusters and there’s room for an independent scene in films and in music. The same has always been true in games but because the process of developing and publishing is so much more complex, generally it has been hard, but one of the things I really appreciate about both the first parties with this next generation is that they’re handing the tools over to independent developers, making it easier for them to publish and get their ideas out there.

Is Activision thinking about investing in smaller, more offbeat games? Is that where you feel your mobile focused studios come in?

I think that we’ve been a little bit more experimental where it comes to mobile games thus far but I also think that we are who we are as a company – and we’re a very focused company. Our strategy is to do a few things and do them exceptionally well.

I think that sometimes people misperceive that as somehow being risk-averse, and yet we’re taking some of the biggest risks in new genres and new business models and new IPs than anybody. So the fact that we only do it a handful of times doesn’t lessen the fact there’s a lot of risk and complexity baked into anything new you try.

Skylanders is a brand that didn’t exist eighteen months ago – people forget that already because it’s been so successful. It was not only a new IP, but a new genre of play that was totally unproven.

Do you consider the size of the investment you’re making in Destiny as a big risk too? Can you put a figure on that?

Yeah that’s how I would describe it. We don’t talk about the specific budgets of our games but you can see the ambitiousness of the concept and in order to bring that concept to life it’s been a big investment.

I think Bungie is a pretty special group of creative people and they’ve had a very good track record of games that are both critically acclaimed and commercially successful. As Activision Blizzard, our two biggest franchises are a persistent world game with World Of Warcraft and a firstperson shooter with Call Of Duty. So we know the appeal of both of those two concepts and we thought that [Bungie] had a very clever way of bringing the best of both of them together.

What’s the relationship like between you and Bungie? Who’s the boss?

It’s a partnership – obviously they’re an independent company and independence is very important to them and were happy to support that with the way we constructed this agreement, being a ten year deal. It’s a partnership that takes both an Activision and a Bungie to bring to life.

At times Activision is talked about as if it’s this big, heartless corporation – do you feel like you need to get out there and change some of those perceptions?

Look, this is a company of passionate people who make games and love making games. I’m certainly aware of all of the reputational perceptions out there but I think they’re incorrect and this is a company that has consistently made some of the most well liked and most played gaming experiences and that hasn’t happened by accident.

Why do you think some people don’t connect those things?

I think that’s starting to change. The fact is that sometimes it’s fun to root against the biggest – both as Activision and with Call Of Duty – and a lot of companies in this industry have experienced that at one point or another.

As a company whose fortunes and success rises and fall with great quality, it’s something that takes a lot of passion and a lot of energy. I want to make the perception match the reality. The reality is that this is a group of people that lives, eats, breathes games. And it has done a pretty great job of creating franchises that a lot of people seem to love and appreciate.

For a time Bobby Kotick was at the receiving end of a lot of criticism online. Do you feel that’s fair?

Bobby’s the guy who bought Activision out of bankruptcy because he believed in the potential and the power of interactive entertainment. And he’s built it into this incredibly successful company by making great games over a long period of time – I know there’s this other narrative but it doesn’t link up with the reality of the person I work with every day. There’s no greater champion of making great experiences that people really appreciate.

You can say a lot of things about Activision but you can’t say you don’t invest heavily in the ideas we believe in, from Call Of Duty to Skylanders to Destiny – these are big ambitious visions and it takes someone who really believes in the potential of interactive entertainment to champion that.

Call Of Duty and Xbox are pretty tightly aligned now after years of co-marketing and content deals. What would change that? Would Sony have to outbid Microsoft?

Well, it’s not just a bidding process – there’s a mutually beneficial relationship that has a lot of different prongs, and as you saw we announced a very similar kind of deal with Sony on Destiny so it’s a case by case thing.

Have you ever thought about bringing Bungie in-house? How much do you think that’d cost?

Bungie is very intent on being independent. That was important to them and so that was something that we knew going in [to the Destiny agreement], and we figured out a way to structure the deal. It’s ten year deal and it’s got a long and ambitious vision to it and we felt like we needed that length of deal to justify the investment it was gonna take to make the game. But they’re independent.

What happens if they come to you and say they need another year to work on Destiny before you can publish it? Can you turn around and say ‘no, you’ve got to get it done on time’?

We’re going to do the right thing for our players – there’s no road to success that doesn’t included making a superb game so we’re going to make those decisions together as a partnership.

 

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Vivendi tries to appeal stalled Activision Blizzard sale

Preliminary injunction could tank Activision Blizzard’s bid for independence.

Activision Blizzard and parent company Vivendi have filed an emergency appeal of a recent ruling that stopped the $8.2 billion sale of Vivendi’s controlling stake, according to a report by the Wall Street Journal. Last week, a preliminary injuction was released that said shareholders had to vote before Vivendi could part with its stake in Activision. The injunction was due to a lawsuit by shareholder Douglas Hayes, who claimed that Vivendi’s board violated rules by failing to get an approval from a majority of its stockholders.

“The injunction leaves Activision and its stockholders in limbo and at risk of losing an $8 billion deal that will return the company to public control,” lawyers for Activision wrote.

Documents filed with the Delaware Supreme Court say the injunction harms Activision minority shareholders by putting the sale in jeopardy. Neither company has a way to get a shareholder vote through before the termination of the agreement on October 15. The court has an October 10 hearing on Activision and Vivendi’s appeal.

Vivendi contend that the deal is a share buyback, so no vote is needed. The original deal would see ASAC II, an investor group led by Activision Blizzard CEO Bobby Kotick and co-chairman Brian Kelly, buying 172 million shares from Vivendi for $2.34 billion. At the same time, Activision Blizzard would buy back nearly 429 million shares for $5.83 billion. The two transactions would remove Vivendi’s 61 percent stake in the company.

The appeal is filed under: The Activision Blizzard Inc et al v Douglas M. Hayes, Delaware Supreme Court, No. 497, 2013.

 

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Sony’s Gara: PS4 “feels like a bit of a rebirth”

Meet the man that every UK games retailer has on speed dial.

Fergal Gara is VP and MD of UK and Ireland at Sony Computer Entertainment and he’s just about to face his first console launch. He’s had experience of retail before with nearly six years with Asda, but the PlayStation 4 puts him firmly on the other side of that fence, marketing a huge product launch at his erstwhile colleagues and contemporaries.

GamesIndustry International sat down with Gara the morning after Sony’s Gamescom press conference to talk about the PlayStation 4’s success in the pre-order market so far, why Vita is still an essential part of Sony’s offering and why it’s an emotional time to be a console manufacturer.

Q: Sony as whole seems to have been very open about the details and features of the PlayStation 4 from very early on, was that a conscious decision?

Fergal Gara: For me that goes all the way back to February 20 and Mark Cerny who said it was a five year project in listening to developers in particular: what did they need to make life easier, to get the toolkit that gave them the most creative scope? And therefore it’s been a project of opening up and embracing the development community, big and small.

I think what you saw last night was a great, rich example of the sheer breadth that comes out of having such a policy. I think we just further underlined the points that have been there since February really, of which there are more and more examples. It’s great to see that diversity, we want to be the ubiquitous home for gaming, gaming for everybody and that means every kind of user, every kind of gamer, but also every kind of developer.

Q: It does feel that with this console launch Sony have got things right. Is that how it feels internally? Do you feel confident?

Fergal Gara: There’s nothing better in any form of business than when customers are rewarding you with their custom and it’s absolutely true to say, particularly since E3, that gamers have been rewarding us with their commitment and their pre-orders. That does have a motivational effect on the team so people are more chipper, they’re more focused, they’re more upbeat and it is fantastic that the key strategies that have been laid out and planned way back, we’ve been able to not deviate from them whatsoever. It does feel like we’re getting a lot of things right and that’s helping the teams be even more motivated and even more focused on doing the best job that they can.

Q: Pre-orders must help when you’re making deals with publishers and developers too?

“Success is contagious, but we don’t allow ourselves to get smug or complacent”

Fergal Gara: Success is contagious, and it does feel like a lot of things are clicking into place now nicely, but we don’t allow ourselves to get in any way smug or complacent. But yes, we’re feeling confident and that’s a good place to be.

Q: You’ve announced the release dates now – why that particular timeframe and was that always where you were aiming for?

Fergal Gara: Yes. The release target window has been there or thereabouts for a very very long time. What’s happened in recent weeks is that confidence on the production side of the equation has grown as units have started flying off the production lines. Now we can start to allocate the volumes and calculate the volumes needed by region, by territories, so that’s allowing us to communicate the date with greater confidence.

Q: Do have any idea how many units have been allocated to the UK?

Fergal Gara: Yes, but I can’t share it with you I’m afraid.

The only thing I would say is Andy [House] quoted a number last night for pre-orders, in fact he quoted a low end number, he said ‘in excess of.’ What I will say is that the UK represents a significant proportion of that, we’re talking unprecedented levels of pre-orders that we haven’t seen in 20 years in this business.

The pre-order phenomenon is a reasonably recent one, or certainly growing in recent years – but it does mean that demand is well ahead of our expectations as they were earlier in the year so our internal conversations are now all about securing volume to maximise the number of gamers we can satisfy on that day one or close to day one. It’s a problem but it’s a good problem to have.

There will be some frustration around it and we know that we’ll have to do our best to satisfy the demand and outside of that manage the frustration that may result if we’re not able to meet all of it immediately. It’s a good problem to have but a problem, and we don’t like to let anybody down.

Q: And how are you preparing with retail for the launch? PlayStation 3 was huge with free TVs and crowds, will we see that sort of thing again?

Fergal Gara: We haven’t pinned down the precise plans for what happens around the launch but I don’t see it being low key. I think it’s a big big moment for us, it feels like a bit of a rebirth to be honest in a big way so we will mark the occasion but precisely how we do it we’re working out. There’s the whole PR side of things, there’s the retail side of things, how do we bring those things together? But it’s a big moment for us so we won’t be trying to gloss over it, that’s for sure.

Q: You must be quite a popular man with retailers at the moment?

Fergal Gara: Oh yes, the phone is ringing quite a lot with one particular subject matter taking up the calls. They’re great conversations to be having, but there is an edge of frustration in there which is everybody wants more than we’re likely to be able to give them for that day one. We have to get every last unit we can into the best places we can, the most balanced route to market we can achieve, so a lot of retail planning is happening on that front.

Q: Is online retail more of a consideration now than it was when PlayStation 3 launched?

Fergal Gara: It definitely is, and one thing online does extremely well is that it’s the channel that is the king of instant reaction. So never before have we seen such an instant reaction at one moment than the E3 press conference, what happened in the 24 hours post that, particularly in the online channel, with a slightly delayed reaction but also an incredibly strong one for the traditional retail channel, was profound.

Q: Has Microsoft’s changing strategies regarding pre-owned games or independent publishing made it harder to focus your strategies for the PlayStation 4?

Fergal Gara: We can’t comment directly on the competition but what we can say is what I said earlier really, we’ve stuck to our plan. There have been no deviations, not in dates, not in times, not in business policies, not in price, nothing. So all we’ve done since February 20 is flesh things out and add the relevant details as and when it was appropriate to pin them down. So last night culminating with the date, the date was the last one of most people’s list so that slotted into place. That clearly wasn’t guided by anyone else’s communication because no one else has put their date on the table. That was when we felt was the appropriate time to pin it down and when we had the confidence to communicate it.

Q: Is Microsoft’s relationship with EA a concern? You seem to have chosen Ubisoft as a big partner for this launch…

Fergal Gara: Yes there can be some edges of competitive advantage carved out by having close associations with certain publishers or certain franchises. The way I feel about our portfolio is… well first of all the Ubisoft one is a pretty long term one. Really it’s just going on to the next chapter and I think it’s just underlined by the PS4 plan. I think it’s wonderful that they have one of the most anticipated launch titles in Watch Dogs, I think that’s hugely helpful to PS4 launch. But I think it’s also really material that we’re growing a relationship with Activision, and Destiny looks like another one, a little further off, but nonetheless one of the most anticipated next gen titles.

So how do I feel? I feel our portfolio of alliances has evolved, but I don’t think it’s any worse, maybe it’s better in terms of strength. We’re all trying to give ourselves an edge in the content front and that is one competitive landscape. I feel pretty good about the portfolio that we’ve got – whether it be the clearly truly differentiated first party titles or those close alliances that give us a bit of an edge, I think it aligns with our ‘by gamers, for gamers’ strategy in that some of those titles are the most gamer-y titles. Watch Dogs and Destiny are two big ones I’d pick out.

Q: And not feeling the need to give away a free game after Microsoft’s free FIFA 14 offer?

Fergal Gara: Well we are throwing free games at people. PlayStation Plus is a fantastic way of offering games included within the subscription and the value of that package we’re very very proud of. It’s been a little bit of a sleeping giant, very fast growing over the last year or so, but certainly nothing like its full potential. I think PS4 will take us there and it will actually underline and demonstrate the value for the other platforms as well, PS Vita and PS3, so I think there’s a tremendous content value proposition there already.

We’ve got every confidence in frankly selling out on day one, our pre-orders are incredibly healthy.

“Vita’s rate of sale has more than doubled over the course of the last few months and it’s now in solid year-on-year growth territory”

Q: It feels like Vita has been a sort of slow burn, will PlayStation 4 give the machine a bit of a sales boost because of the remote play features?

Fergal Gara: I think there was great news for Vita last night and first of all the context… yes it’s not the biggest seller in the gaming market, but its rate of sale has more than doubled over the course of the last few months and it’s now in solid year-on-year growth territory so that’s pleasing.

There were two major pieces of news last night. One is around price and the second is further developing and expanding upon the story around remote play, which looked incredibly slick, as demoed last night. Is that attractive? I think so, particularly when you bring in PS4 at an attractive opening price point, and then put Vita alongside it at its most attractive price point ever…It’s quite a powerful combo. Of course there’s no premium on the software when used for that remote play purpose. But it also services as a standalone and self contained console.

So you could buy PS4, PS Plus and PS Vita and then selected blockbuster titles for example, and actually have quite a lot of content. So you get your Vita specific download games through Plus, you get remote play and your blockbuster titles, you get additional games for PS4, so that alone gives you a lot for quite a competitive total price package. So we’re excited about that, it is bringing a PlayStation difference together for us.

Q: It feels as though gamers have come to Vita, just in their own time…

Fergal Gara: It definitely entered a much more complicated market than was expected when it was conceived and the design process started. There’s no doubt about that. And comparative value around content is one of the big issues, because there are so many freemium games out there for other portable devices. So you’ve seen a major concerted effort to address that.

First of all remote play gives you access to high end experiences at no extra cost, the Mega Pack programme that we outlined last night gives tremendous value in portable gaming and PlayStation Plus gives you more, so it’s not just a £40, £50 or nothing kind of portable gaming experience. There are tremendous value opportunities in and around it. So I think we’re slowly, or quickly actually, we starting to find its feet and of course PS4 was part of the vision for Vita long before anybody knew about PS4, so there’s a lot of things clicking into place now.

Q: The Mega Packs, are they aimed at new consumers?

Fergal Gara: What we’re seeing now is most new Vitas are being bought with a Mega Pack at the moment, so it was quite a relevant summer promotion, quite a young focus in terms of the titles that were there: summer portable fun made that promotion very relevant. As we go forward now over the coming months the likes of Killzone Mercenary clearly takes us a bit more squarely back into gamer territory, Tearaway is quite a crossover title – good for gamers, good for a broader audience too. So we’ll continue with the Mega Packs and addressing that wider audience, but we’ll tip it a little bit more towards core gamers as we come into the back end of the year.

Q: You also announced LittleBigPlanet Hub, which will have a microtransactions element. That’s an area you played with before thanks to Home and Free Realms, is it a major pillar of your business now?

Fergal Gara: Microtransactions definitely play a key role in the gaming market overall and in fact some of the third party publishers are probably the leaders in this space really. FIFA Ultimate Team is a classic example of microtransactions that are used to a very large degree. Call Of Duty is an example of where microtransactions can feature.

So is it a passing fad? Is it the future? I don’t know the answer, but it’s well worth reaching out and embracing it and seeing where it can take us, how big is freemium going to be on console? We don’t know but it seems wise to test it and if it doesn’t work, if there’s not enough transactions or no interest whatsoever then fine, we move on. What we’re doing here is playing with a whole variety of new business models and I think that gives consumers some great options and great value. Some of them will become the future, some of them might fade.

“Vita definitely entered a much more complicated market than was expected when it was conceived and the design process started”

Q: So you’ve got a few months before launch, with Tokyo Game Show coming up in September, what are you going to be using that time for in terms of marketing and behind the scenes preparation?

Fergal Gara: As a team first of all, of course November 29 is an incredibly important focus point for us, but we’ve got three children and we love them all equally, so one of my big focus points is making sure that PS3 plans are not overlooked and they’re in the best possible shape. With titles like Beyond: Two Souls and Gran Turismo 6 to come it still represents an incredibly strong proposition, so you’ll be able to get a stack of value for under £200 in PS3 land depending on which model you go for and which combination of games, and things like GTA 5 giving an enormous tail end boost current gen.

So all of that is hugely important to us and a lot of work is going in there to keep it going, because it deserves to be kept going and it deserves to be kept in the limelight.

And of course Vita as well, which plays nicely into the PS4 story.

But as for PS4 it really is into the detailed execution on stuff, media planning, launch night and thinking that through, pinning that down, and of course the retail plans are incredibly important and sort of emotional when you’ve got a position which is very high demand and finite stock. So that’s what we’re into now, lots of nitty gritty, but fast paced, exciting, stuff.

 

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