What is Kotick thinking? If at all…

After I read about Kotick’s comments here and then commented on the insanity here
I was still pretty stunned for a few days, as were a lot of other people I know in the game industry.

At another conference, this time the Morgan Stanley Technology Conference Kotick has made more eyebrow raising comments. My skype went nuts over the last day or so as everyone has been sending me the links hah. Gamesindustry.biz reports a few of his comments, but I wonder if Kotick isn’t doing a technology and investing roadshow, hitting all of the influencers…with the same speech. So far, Goldman Sachs and Morgan Stanley. Think about that for a minute.

Anyway, he has already declared that you need to spend $500M-$1B to effectively compete with World of Warcraft (total bullsh**) or at least be commercially successful. Now, he is saying that conversations with Blizzard has Activision thinking about a Call of Duty MMO (bad idea! bad!) which will probably cost…how much? My psychic mind powers give me a strong sense that the budget will be something insane, and will directly impact Activision shareholders (or Actiblizzion, whatever they call the merged venture). Even more mind boggling, is that he implies that Blizzard’s “take away” from the brainstorming conversations was (and this is a direct quote):

“about how Starcraft – as a short session experience – can actually be the model for in-game advertising and sponsorship and tournament play and ladder play for the future.”

Uhm, wow. I’m beginning to see where all this is going. I wonder how long before Blizzard/Vivendi starts feeling some serious buyer’s remorse. I don’t have an opinion of the staff at Activision, but my impression of Kotick is rapidly going down the toilet and based on his comments (granted, I didn’t hear them first hand and I don’t have the full transcript of his talk), I think we are beginning to see early red flags for the future of the company.

Sure, Blizzard is the king of the hill now, and World of Warcraft is great, but can they really follow through with people like Kotick being thrown into the mix? How many of the original designers and developers that worked on WoW are even around any more (remember the exodus with all the new MMO studios being founded by ex-blizzard WoW employees that all had critical contributions to the game?).

Look at NCSoft…they used to be the king of the hill too, but it only takes a few missteps for the whole house of cards to tumble.

My advice to Blizzard: Caveat emptor.

9 thoughts on “What is Kotick thinking? If at all…”

  1. At the very least, Vivendi is still the owner of Blizzvision. If Kotick makes enough poor decisions, or negatively affects the value of the stock, Vivendi has the option to sack him.

    But as you said previously, this could simply be the spreading of FUD to deter competition.

  2. Yeah I’m pretty sure he’s just spreading misconceptions on the MMO market to deter competition. If you look at the curve of subscribers on mmogchart its pretty obvious that World of Warcraft hasn’t reach the peak of its growth yet.

    With the churn World of Warcraft has and the constantly growing numbers it means that the game is still bringing in new players. Activision deffinitely doesn’t want some developer to accidentally make another great casual MMO by accident and start claiming these new players.

  3. My opinion is rapidly becoming:

    * World of Warcraft is plateauing, or at least slowing down significantly.
    * Kotick will push for a massive (and I mean really massive) budget for a new title (CoD or otherwise) that will take several years, lots of delays, and ultimately be extremely overhyped and equally dismal.

    See, its one thing if Kotick blows 20-50M on an MMO…Vivendi/Blizzard can handle a few of those (look at NCSoft as an example). But if he gets his 500M budget (or even 200M) because he suckered the right industry experts, financial analysts, or the public stock market (again, look at his recent comments and who they were directed at), it will be a colossal waste of resources. It shouldn’t take more than 30-50M to build a competitive top tier MMO. A half billion dollars should give you the ability to redefine an entire market, launch a console, and take over a small country. Or create 70+ MMOs.

    Anyway, thats what I think. The minute Kotick announces a greenlight on an MMO project with more than 50M budget is when I would sell my activision stock (assuming I owned any).

  4. Half a billion to a billion is absolutely insane. Seriously, you start entire INDUSTRIES on that. You find CURES FOR CANCER with that. You sure don’t blow it on a VIDEO GAME. Your ROI is going to suck, no matter how you look at it! Just think about it, you’d need 10 million subscribers paying $10/month for 18 MONTHS to BREAK EVEN.

    Remember people, staffing and bandwidth and hardware costs money! Support, the cut from your distribution network, you’d be LUCKY to break even in 18 months with 10 million subscribers.

    Even if you go by the industry’s spurious standard source, MMOGChart.org, you can see that this is an absolutely unrealistic proposition. You’re talking about either doubling the market size, or capturing 60%+ of the market share.

    Kotick is clearly talking verbal diarrhea. Down hear in reality land, smart players are making MMOGs for under $5 million, and turning tidy profits. When does the Kotick lynch mob form, and where do I sign up.

  5. While perusing MMOGChart, have you noticed something odd?

    Runescape: a ftp/ptp, unlicensed MMO with poor graphics takes more of the market share than any other MMO save for WoW.

    I used to play runescape. The reason I stopped is because the graphics hurt my eyes. Even after all these years using the exact same gameplay, Runescape retains 6.2% of the market share?

    They must be doing something right (and for much, much less than 500 mil).

  6. Just think; with that kind of money, they could build hardware built specific to the game. I fully expect the VR goggles from .hack if anyone ever spends this much producing an MMO.

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