New platforms and business models like mobile and social mean that the AAA publishers are no longer chasing the exact same marketplace. While publishers like EA actively aim to make Facebook and iOS part of their revenue strategy, companies like Activision Blizzard would rather stay away.
Activision has made its millions on big brands like Call of Duty and World of Warcraft, and despite the fact known brands are a major advantage -- if not increasingly necessary -- for games that want to top the App Store charts, the company just doesn't see phones and tablets as a useful opportunity for its products.
"We don't view the App Store as a really big opportunity for dedicated games," Kotick said at Reuters' Global Media Summit.
As games are very nearly the most popular category among both free and paid App Store purchases, many industry-watchers see iPhones and iPads as legitimate contenders alongside other portable game hardware like the PSP and the DS. Wedbush analyst Michael Pachter even went so far as to suggest Apple platforms hold a share of responsibility for a 2010 that's seen mostly sales declines, and that they could be "cannibalizing" other platform sales.
But Activision has had plenty of success leveraging the infrastructure of existing console platforms -- not only did Call of Duty: Black Ops bring in $650 million in its first five days on sale earlier this month, but the publisher is able to do a significant share of follow-up business by selling map packs and DLC for its games via Xbox Live and PlayStation Network.
And although many companies are turning to brand extensions on Facebook, Activision says the challenges in converting user numbers into actual revenue makes the social network another area that's less than ideal for its focus.
"It's a different question assessing it as a business opportunity," said Kotick. "Right now we don't see an opportunity for us to participate in that market."
Frankly Bobby is right about Mobile. I used to be in mobile when it was the 'big thing'. It turns out that it is an illusion and working with carriers...stinks. Working in mobile is a grind and not sexy for shareholders.
The App Store is another wasteland to make money as there is an amazing amount of crap-ware. Games like cut the rope and angry birds are games ATVI would not and would not know how to make. Also ATVI probably hates the .99 cent price point for games. I could see them wanting all their properties to be priced at $6.99+/
LULZ...um, what? So mobile is not a "big thing" any more? You should give DeNA a call. It sucks that it was a grind for you, and having to deal with a lot of carriers is not fun, but at the highest level mobile IS still steadily growing and is a significant piece of D2C in general. It's the packaged goods side of the gaming business that is in decline. I would say that you and Bobby are being short-sighted.
Yes, Apple takes a good cut, but Android is on the rise and eventually the competition between the two (and possibly another OS?) will lead to a more comfortable environment for developers. And have you not noticed that there are countless higher-end mobile games (above .99) that are doing quite well?
I like the Android market. However, working on mobile is a grind because you need to port a game across so many devices (30+) to get any love from a carrier. When you get a promise for top of the deck placement, they often rescind it and give it to another game/publisher. I am positive that backroom deals art to blame.
Its more about being able to create a sustainable franchise they can leverage regardless of the platform. All the shit on iTunes are one-offs. Hey Angry Birds was popular... where do we go from here? Angry Birds 2... It's just limited and ATVI are the masters of leveraging off a successful franchise for a long time and maximising returns for shareholders. What people have not realy picked up on yet is that apart from the odd lucky strike from some bedroom coder or indie developer 99% of mobile games do not make any money. How can they when 30% goes into Steve Jobs wallet. In ATVI defence they are going where the money is guaranteed.
Large scale pubs like ATVI and EA have the ability to negotiate the 30%, based on the strength of their product (FIFA, COD Zombies) and their ability to both advertise on their own and consequently draw more customers to the the app store.
"closed" is a relative term. I don't think the thousands of armchair devs currently trying to build the next Piano Cats, Angry Birds, etc. would agree with you.
And gus, you are dead wrong about 99% of mobile games not making money. They may not make BIG money, the kind that ATVI likes to see, but they do make money for their devs.
The primary reason ATVI doesn't want to be involved in this area is because, at this stage, they don't see any need to be. They are making billions without heavily investing effort in this area, so why spread the resources unnecessarily?
30% cut is massive? You don't know what you are saying...
For example to sell a game in a box through retail distributors they charge you 30% just to say hi and after that you still need to manufacture the boxes, deliver them to the store, get ratings, pay to all middlemen etc. 30% cut for Apple is very attractive!
The mobile market sucks but it is definitely not because Apple's share (BTW they are nearly breaking even on that because of the huge cost of managing the App store).
All this has, of course, happened before. In the mid 80s, the Atari 400/800, the VIC 20, the Commodore 64 ans 128, and the Apple II series all had no barriers to entry for developers. As a result the channels were flooded with mediocre product and a ton of people (except for the very earliest developers) lost a bunch of money. Almost none of the mobile and Facebook developers remember this.
Developing a very profitable mobile/Facebook game is similar to the odds of becoming a star in Hollywood. It can happen, but the probability of it occurring is vanishingly small.
"Basically, we'll sit back and keep busy with our other ventures and wait it out while smaller people do all the difficult grunt work of figuring this market out and establishing franchises. Then as it is blowing up we will throw a crapload of money at it and buy in"
Business 101. Small entrepreneurs usually make most of the interesting breakthroughs in new areas. They are agile and targeted, whereas large companies are slow and spread through different markets. I think a good balance of both is what makes a dynamic market. You have innovation in your small to medium sized businesses trying to become big and you have your big players providing product at scale for the masses.
I agree with Kotik on this one. I was looking into developing on IOS and unless you hit big and i mean super big you barely break even. apple takes a cut which is expected with most systems. if you are a small company and cant afford big deals with game engine developers like unity, they take a cut. You packages for art cost an arm and a leg, and to develop for IOS you have to have an overpriced mac to even develop for the thing. You would have to not just make one hit but several straight just to pay off debt on capital expenses. Sticking with consoles and PC/Mac is the smart move.
The App Store is another wasteland to make money as there is an amazing amount of crap-ware. Games like cut the rope and angry birds are games ATVI would not and would not know how to make. Also ATVI probably hates the .99 cent price point for games. I could see them wanting all their properties to be priced at $6.99+/
Yes, Apple takes a good cut, but Android is on the rise and eventually the competition between the two (and possibly another OS?) will lead to a more comfortable environment for developers. And have you not noticed that there are countless higher-end mobile games (above .99) that are doing quite well?
"closed" is a relative term. I don't think the thousands of armchair devs currently trying to build the next Piano Cats, Angry Birds, etc. would agree with you.
And gus, you are dead wrong about 99% of mobile games not making money. They may not make BIG money, the kind that ATVI likes to see, but they do make money for their devs.
The primary reason ATVI doesn't want to be involved in this area is because, at this stage, they don't see any need to be. They are making billions without heavily investing effort in this area, so why spread the resources unnecessarily?
For example to sell a game in a box through retail distributors they charge you 30% just to say hi and after that you still need to manufacture the boxes, deliver them to the store, get ratings, pay to all middlemen etc. 30% cut for Apple is very attractive!
The mobile market sucks but it is definitely not because Apple's share (BTW they are nearly breaking even on that because of the huge cost of managing the App store).
Developing a very profitable mobile/Facebook game is similar to the odds of becoming a star in Hollywood. It can happen, but the probability of it occurring is vanishingly small.
Pretty healthy, actually.