Nicodemus slams Activision CEO

I woke up this morning and was stunned to see an article on gamesindustry.biz where the CEO of Activision, Bobby Kotick, is quoted as saying some pretty insane things at the Goldman Sachs Technology Investment Symposium earlier this week.

“We don’t think that even if we made the USD 500 million or billion-dollar investment to get a product out [to compete with WOW] that we would even be successful doing it,”

This is ludicrous on a massive scale and demonstrates that Kotick (and by association, Activision) literally has no clue when it comes to MMORPGs. Spending 500M to a billion dollars on a single MMORPG would have the same level of historic stupidity and waste as the Atari E.T. game (if you don’t know about that, look it up). Not only that, but for a company like Activision to spend that much, it would pretty much guarantee its sheer and absolute failure on an epic scale. It is ABSOLUTELY possible to create a MMORPG with a tenth of that amount and be competitive with WoW (and profitable).

“When we first started looking at it, it appeared to us like a game in an insurmountable product category… EA, Microsoft, Sony and scores of venture capital investments had been put to work unsuccessfully in trying to develop massively multiplayer games as a product opportunity,”

Why is that, do you think? The problem is the management of those companies, old misconceptions of what an MMORPG is or how to make one, and a lot of really, really bad design. Why is it that the companies that are most successful in the MMORPG space are the small or independent developers working with original IP? Why is it that the big publishers screw things up when they acquire these developers, or they throw massive amounts at a game that is just craptastic and then either cancel it or blame someone else on the failure?

“When you… Look at all the money that’s already gone to these businesses that have failed, there didn’t seem a likelihood that even a well-managed company like Activision would have the prospect for profit any time soon in this category.”

Oh, please. This was a pretty narcissistic and arrogant comment. “even a well-managed company like Activision”, bah! Considering a half billion for an MMORPG is not well-managed at all. You might as well be smoking the money in the bathroom. My advice to Kotick…if you want to make money on an MMORPG, give your money to someone that knows what they are doing. It isn’t hard making a MMORPG profitable if the people making it are halfway intelligent and not monkey drones working in your generic game development factory.

Ok, so why am I so pissed about this? The audience that Kotick was talking to was the attendees of a technology investment symposium. If any of those people were looking at investing in game developers or funding new MMO ventures or even financing publisher expansion, Kotick just made it look like anything related to MMORPGs was a fat waste of time and not worth the risk. He single-handedly spit in everyone’s eye and effectively torpedoed someone’s chances at getting funding. This will have a subtle backlash effect on gamers too. If it is harder to find funding for new titles, you will see fewer games, less innovation (in a market where there is barely any to start with), and more games based on dumb Hollywood licenses (the argument being that a license lowers risk). Even worse, his comments have hit the press now and will probably hit mainstream market analysis and research reports.

Great job Kotick. Thanks a lot. I’ll be sure and dedicate my next MMORPG design project to you. I hope you don’t get punched in the face by an independent studio exec at the next game conference.
Speaking of which…this is an open request to everyone in the industry out there…if you have a funding pitch that gets nerfed because of Kotick’s asinine comments, please let me know.

Kotick, I think you owe us an apology and a retraction or at least a damn good (and detailed) explanation at why you think it would take $500-$1B to compete with WoW, and why you think MMORPGs are an “insurmountable product category”. Who has been feeding you your information?

23 thoughts on “Nicodemus slams Activision CEO”

  1. Activision must not be that well-managed if they can’t even make a competitive MMO with a billion.

    I totally agree, and as cruel as it is, I feel a little bit better each time ripoff MMO bites the dust, because it clears up the arena for the innovators. Does that make me a bad person? … probably not.

    Fantasy Dragon Quest ONLINE!

    -Guilds!
    -Monsters!
    -Quests!
    -Sucky Crafting!
    -PVP!!!!!!

    (And often… far too often)
    -BASED ON BOOK X, MOVIE Y, or GAME Z! What more do you need?

    We all know the drill. If you make the above, you will not be competitive, even with such enormous funding behind you. Gah! It’s so obvious!!! I think I need to scream into a pillow or something.

  2. I doubt Activision could put out a piece of software capable of competing with EVE Online or City of Heroes at a few hundred million dollars, nevermind WoW. They’ve not exactly struck me as brilliant when it comes to entering new markets.

    I think it’s a good statement. You can’t have investors expecting any given unit to be a massive success story, no matter how much money, experience, time, and focus you throw at it. MMO players are fickle. Tabula Rasa had some pretty impressive funding, a well-known expert in charge, and a load of time and focus, but it wasn’t even ranked up with the fairly inexpertly and cheaply slapped together CoH or EVE.

    Working at a dozen smaller seed-sized games, on the other hand, seems like a much more profitable option. They won’t match up to WoW, but they’ll also avoid the massive risks.

  3. I’m a big fan of Tabula Rasa and I can say its problems had everything thing to do with old MMO design ideas applied to a FPS shooter. It deffinitely could have been a hit if 1) had better PvP and 2) had a true end game.

    Quite frankly the entire speech is Activision trying to protect its new intellectual property. There are probably a couple of studios out there with ideas that if properly funded could become WoW killers. His speech makes it less likely that this will happen.

  4. I think you’d have to define what it means to “compete with WoW”.

    If you mean “make a profit”, then he’s smoking crack.

    If you mean “pull in 500 million a year profit, reach 10 million subs”, then he’s absolutely right.

    Unfortunately, his investors (like many people) may be using the latter definition. We have seen too many high-budget games flop lately to completely ignore his point. I’m not completely sure Blizzard could duplicate WoW’s success at this point, and certainly not on the budget they had the first time. It’s not a matter of money, as much as figuring out why the hell WoW was so successful in the first place.

    EQ was a smash hit. Vanguard wasn’t, although it was certainly intended as an upgrade to the original.

    If you really want to be pissed at someone, be pissed at the people behind Vanguard, Hellgate, Tabula Rasa, Fury, etc. We need some positive examples of successful MMOS in the post-WoW era, and I can’t think of any except LoTRO and Guild Wars.

    Or…we can all just get off the MMO bandwagon for goodness sake. MAN, would I kill for another single-player game like Jane’s Longbow.

  5. I think Relmstein got it: probably the EA exec only wanted to poison the investment “market” and so keeping at least _some_ investors from funding the next MMOG project.

  6. Thats just damned dirty pool in my opinion.

    A colleague suggested that his comments were intended to make the blizzard merger look better…i.e. “it is soooo hard and soooo expensive to compete that we just HAD to get acquired” (whine whine whine).

    Apparently some Activision shareholders are suing because they feel like they are getting shafted in the merger. Who knows.

    Either way, I feel like punching a certain someone in the gut for his comments. What a bent tool.

  7. Now that I think about it, I think I should have said that I thought his comments were irresponsible, incorrect, and damaging to developers..especially the small, startup, and independent companies out there.

    I’m just getting madder the more I think about this. I hope someone in the mainstream calls him out on it.

  8. I think you’re giving EA way too much credit with being that smart to poison the market on purpose, they seem perfectly able to bring about the worst in the industry while doing business as usual.

  9. Interesting. Of course, dissuading new money investors from jumping into the space just means that the valuations of independent and fledgling projects will be lower and more reliant on strategic investment and m&a with established players like, um, oh! Activision…

    More gasoline on the consolidation fire.

  10. Working at a dozen smaller seed-sized games, on the other hand, seems like a much more profitable option.

    This is a very, very important point. The relative success of smaller, niche MMORPGs like EVE shows that it’s actually pretty straight forward to run a competative MMO. What you can’t easily do is dethrone WoW with your first MMORPG production. If your benchmark for success is ‘zero to top of the market’, there’s no helping you. But if you’re willing to spend money (and way, way less than 500 million) on trying to compete with EVE and CoH and maybe (I can’t believe I’m suggesting this) a real MMOPvP game, you might A) stumble upon a really serious success and B) even if you don’t conquer the world, you’ll end up with some good institutional experience that would be useful for your next, bigger projects.

    Also, hire me. I’m very smart and would work cheap.

  11. I’ve just posted on the comments made by Kotick. (http://stroppsworld.com/2008/02/29/money-fun/) Your take on the comments was a little different than mine, I didn’t actually think of it as poisoning the well. Though that makes sense in the context of the meeting he was at.

    I think he missed the whole point that money doesn’t equal creativity, nor does it make something fun and good. Look at the big movie blockbusters like Alexander… huge budget – bad movie.

    I tend to think that sometimes the best work comes out of underfunded studios. They don’t have huge wads of cash to throw at it, so they have to use their creativity. There’s probably less design by committee too.

  12. Look at the money tree Blizzard grows for WoW…
    The more money you get…the less creative you are with what you got…
    All of that cash would equal…big stinker in my opinion…there would just be no love in the product..

    @Nick
    quoted
    “Fantasy Dragon Quest ONLINE!

    -Guilds!
    -Monsters!
    -Quests!
    -Sucky Crafting!
    -PVP!!!!!!

    (And often… far too often)
    -BASED ON BOOK X, MOVIE Y, or GAME Z! What more do you need?”

    I played that game…it’s actually called LOTRO!

  13. Shouldn’t he have to disclose in the same breath that he is the CEO of the 800 lb gorilla that he says is impossible to compete against?

    CEO of Microsoft – “It’s impossible to compete against an OS like Windows. Don’t even try.”

    CEO of WalMart – “It’s impossible to compete against a retail chain like WalMart. Don’t even try.”

    See the problem here?

  14. Wow, that’s . . . special. $1 Billion to develop an MMO? That’s what, 20 times the budget WoW had? How is that even a remotely reasonable estimate? That’s like saying, “To make a movie to compete with Titanic we’d have to spend six billion dollars!!!!! Zomg! I’m a moron!!”

    Sigh.

  15. Maybe I’m just a cynic, but it sure seems to me like those comments are definitely intended to be trash talk and a foil against potential threats to WoW. :P

    “Don’t even try to compete with what we’ve got, man! It would cost you, like, at least half a billion dollars! And you’d probably still lose!”

  16. “Kotick, I think you owe us an apology and a retraction or at least a damn good (and detailed) explanation at why you think it would take $500-$1B to compete with WoW, and why you think MMORPGs are an “insurmountable product category”.”

    Who are you? The sole defender of Real MMORPGs? Do you gain a magical ability to speak for everyone if you get angry enough?

    Your comments are mostly right, but that’s no reason to just.. conscript the rest of the industry into marching behind your banner of Indy Game Studio Producers for Better PR. Make your stand and hope people join in.

  17. Who am I? That isn’t really relevant, and I don’t claim to be the sole defender of MMORPGs, nor do I claim to “speak for everyone”. However, I have an opinion (and a valid one at that), plus a forum to express it.

    I certainly haven’t conscripted anyone in the industry into marching behind me or my banner.

    In case you haven’t noticed, I am making a stand, hence my comments. If you don’t want to join in, then either offer a reasoned and logical counterpoint or go play in another sandbox.

    By the way, if you work for Activision or Kotick, you should disclose that before jumping on my post with righteous indignation. Kotick’s comments were unbelievable enough to start with, and completely inappropriate and disingenuous in the forum they were given. Like I said, I’d like to see him clarify what he meant, or at least back up his point of view.

    Finally, this has nothing to do with Indie Game Studio Producers or PR. Kotick’s comments are damaging to the game industry on a number of levels and he needs to be called on it. Otherwise, the mass media is just going to parrot his comments and mislead many decision makers and financiers.

  18. If you aren’t intending to speak for everyone then I have no problem with the post. The post in general – and the last paragraph in particular – read to me as if you felt anyone in the industry should follow your lead *by default*. I can’t stand self appointed leaders, and seeing as how nobody else called you out on it (at least here in the comments), it’s probably me just prematurely bristling.

    BTW, I’m not in any way related to the accused.

  19. I’m certainly not a self appointed leader, but I am a professional in the industry and his comments directly affect me and make my job harder.

    I don’t see where you get that I feel that people should follow my lead, by default or otherwise by my last paragraph. I simply called him out on his outrageous comments, and demanded a clarification or apology. I didn’t demand a boycott of Activision or a petition against them or anything.

    //shrug//

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