Activision CEO talks Take-Two takeovers, $500M WOW-killers

CEO Bobby Kotick claims any attempt to unseat Blizzard's MMORPG would cost at least a half-billion dollars; says GTA publisher wasn't a desirable acquisition.

During a panel addressing the future of massively multiplayer online games at this year's Game Developers Conference, Blizzard Entertainment VP and chief designer Rob Pardo said he found it interesting to hear from publishers that World of Warcraft has set the bar too high to warrant launching a competing product. One of the publishers he was apparently referring to is Blizzard's soon-to-be partner Activision.

Speaking at a Goldman Sachs investor conference this week, Activision CEO Bobby Kotick said that just establishing even footing with Blizzard's titan MMOG would require a half-billion dollar investment, and even then the outcome would be far from certain.

"One of the motivations for us in doing this [merger with Vivendi] was our own recognition that even as a multibillion-dollar company with billions of dollars of capital and franchise assets, we would be playing an unbelievable amount of catch-up," noted Kotick. "Even if we were willing to invest the $500 million it would take to just get to a standstill with Blizzard, it would result in declining operating margins and huge risks. And we don't think that even if we made the $500 million or $1 billion investment to get a product out that would be competitive with Warcraft that we would actually be successful doing it."

Kotick also stressed that the MMOG market is a tough nut to crack. "When you look at [LucasArts] and EA and Microsoft and Sony and you pick the venture capitalist--all of the money that's already gone into these businesses that have failed--there didn't seem the likelihood that even a well-managed company like Activision would have the prospect for profit anytime soon in this category. That became very apparent to us. Short of this transaction, I think we would be very hard-pressed on how to be successful in this category."

Activision's wide-ranging Q&A session with investors covered a variety of other topics relating to how the publisher plans to continue riding its current crest of good fortune. After taking a swipe at EA's unsolicited advances upon Take-Two, Kotick noted that the Vivendi Games merger is moving forward well and expected to conclude by the end of June. Kotick also said that the addition of World of Warcraft will especially complement the publisher's Guitar Hero brand in pushing forward the gaming industry's expansion into new demographics.

Kotick also addressed the seeming increase of gaming-industry consolidation, saying that he expects to see less company consolidation, and more developer and intellectual-property consolidation. "Licenses and development talent will consolidate to the places where you have the best prospects for realization," noted Kotick. The comments echo recent sentiments expressed by French publisher Ubisoft.

Returning to EA's buyout proposal of Take-Two, Kotick said that the Grand Theft Auto publisher didn't meet Activision's acquisition standards. "On the Take-Two front, we have had a well-stated criteria on what we are interested in in an acquisition. We need a history of profitability, good management, proprietary technology or franchise, history of multimillion-unit sellers, they would have to be nondilutive and operating margin credos. For us, Take-Two didn't fulfill those requirements."

Written By

Want the latest news about World of Warcraft?

World of Warcraft

World of Warcraft

Discussion

138 comments
s3NoXeRs3
s3NoXeRs3

I started playing wow and for about 2 months that all i played. Now i suck at all thos other games like rainbow. But i quit wow its time to get my life back.

desolation00
desolation00

Sometimes I'm glad that I'm too much of a cheap sonova to pay $10 a month or more just to play a videogame. Of course, I may be missing out on a great game or a great community, but then I remember all my other online gaming experiences and shudder. For one thing When Will They Hire People Who Understand Ninth Grade ECONOMICS For These Projects...

XXMadManVII
XXMadManVII

WoW = crack.... many of hours...days.....weeks.... were spent on that game. I wish they had a WoW rehab or something :) Swampthing... ::::dripping with sarcasm::: don't forget Star Wars: Galaxies..... lol

Swampthing
Swampthing

@Timbydude... "At the time WoW was released, there was no real competing MMORPG?" Dude, are you sixteen or something? Your recollection of history is pretty bad... At that time, EVERQUEST was a major force and people weren't even sure if WoW could beat the mega giant they had become. They had millions of subscribers and all their competition fell aside.... except for one MMO that was quickly becoming a major force, CITY OF HEROES. They launched several months before WoW and held a good share of the market that EQ didn't dominate. Of course all things change, and EQ and CoH are no longer the forces to contend with. WoW noticed what all the competition had done, and did things better. Prior to EQ's domination, ULTIMA ONLINE held the title, so every MMO has their period before the next big thing comes along...

InotStupid
InotStupid

act = activsion...i see.... sorry for the double post.

InotStupid
InotStupid

@ pourya_ahmadian am i dreaming or did he just say bungie made COD?

DoubleAxe
DoubleAxe

personally I thought WoW was boring... I played on and off for about 3 months. I just couldn't invest the 12 hours of playtime a day that the game requires.

DoubleAxe
DoubleAxe

[This message was deleted at the request of the original poster]

pourya_ahmadian
pourya_ahmadian

act is a stronge company in game makers;it can show us that everything is possible in the gaming;everytime that FPS must change it's way,bungie and act that made it with HALO2,3 AND COD2,3; WE CAN WAIT FOR A GREAT GAME FROM THEM SOON;

Humorguy_basic
Humorguy_basic

One: let's kick out of touch that 'MMO's will save PC gaming'. Two: Let's also lets please take note (as hardly any PC gamers do!!!!) that Warcraft 1, 2 and 3 did NOT have cutting edge graphics and relied on fantastic GAMEPLAY. Therefore, they sold in enormous numbers because they did not need a high end PC, and therefore created a huge ready made base for WoW! This huge number was enough to create a 'me too' bandwagon to join the fanbase , as they often do - making WoW more than just an 'MMO' or a 'PC game'! Any more than in the 80's the Rubik's Cube phenomenon was just a 'puzzle' or that 'Gone with the Wind' and 'Star Wars' are just movies. To the extent we have programming hero's like SId Meier, and the highest selling PC titles of all time being The Sims and Civilization, and we have WoW using 4 year old graphics and being successful on the back of low end graphic high end gameplay single player strategy games, it would seem that the truly successful PC figures/companies of the last decade or so are those that did not buy into the high end graphic (meaning a high end PC to play it!) that gets most, if not all the attention from the PC media and hardcore gamers.

ImperialPanda
ImperialPanda

The only reason WoW is "dominating" is because the vast majority of the people playing WoW are new to MMO's. "But remember: when WoW was released, there really was no completely dominating MMORPG. With over 10 million subscribers, I'd say that WoW is completely dominating the MMO market right now." That might be a valid point, except for the fact that there weren't 10 million MMORPG gamers before WoW, even if you added up every MMO that existed. WoW is a success because it managed to convert new people into MMORPG gamers. Wii is a success because it appealed towards people who weren't gamers before. I thought this would be common sense by now. To compete against WoW, you *don't* compete against WoW. Instead, you need to innovate to expand the market and attract new audiences. In any new medium, the market is ever-expanding, and today's core audience will only be a tiny fraction of tomorrow's core audience. The $500 million estimate is just a wild number thrown out there. The technical aspects of creating a viable MMORPG certainly doesn't cost that much. The critical component is creativity regarding specific game mechanics. However, the problem is it's really hard to gauge someone's "creativity" and their likeliness to succeed. It's not something that can be easily determined like having or not having a degree in computer science or animation. If someone made 1 million MMORPG's, the average cost of a MMORPG that's more successful than WoW might be $500 million, maybe. But that average is insignificant, just like the average return on a lottery ticket is insignificant to someone who buys one a month.

carlolsen
carlolsen

Maybe the problem is that there are a gazillion WOW players right now, that simply arn't ready to give up their characters that they have invested so much in. 99% of the MMORPG target customers are virtual gods in WOW, and are afraid to be poor level 1 noob's again... I'm downloading the free 7 day trial of LOTR right now...

bigboynow0785
bigboynow0785

Give Lord of the rings a try. Just as good, and better if your a fellow fan

Haplo17
Haplo17

I've been playing WOW for a long time, and I can say that while I still really like WOW and the new expansion will keep me busy for a while, Blizzards VERY slow expansion release is a huge drawback. Eventually you burn through all the content and want something new. If a truly good game comes out I think it definately has a chance to be profitable, industry analysts are too busy crunching numbers to realize that a lot of WOW players would LOVE something new, but right now nothing else in the market has shown to be strong enough to tear me away from WOW. To me it comes down to "If you build it, they will come". Making games, or movies, or anything with a big budget is risky, but sometimes you have to bite the bullet and throw down with the big boys, no risk no reward. There is a TON of room for improvement in WOW and good developers have to see where WOW has failed and where they have succeeded. The wheel doesnt have to be re-invented, just improved.

Timbydude
Timbydude

But remember: when WoW was released, there really was no completely dominating MMORPG. With over 10 million subscribers, I'd say that WoW is completely dominating the MMO market right now. It would be pretty hard to get all of those subscribers to play another game; I think his estimate is actually pretty accurate.

Dryker
Dryker

Excuse me if I respond before finishing the article, it would take 500 million dollars to unseat WOW? Why, because it's a good game and has a gazillion subscribers? So what. Ask the guys who made the game. Its success blows their minds. It's just a game. A good one mind you, but just a game. Its development budget wasn't ridiculous, certainly not 500 million dollars. If you want to unseat WOW, just develop a better game. I suspect this guy is referring to the marketing blitz that he feels would be necessary to unseat them. Not necessary. Halo was eventually unseated by Gears of War, back to Halo 3, and now arguably Call of Duty 4 ( at least my friends list is filled with COD 4 players instead of Halo 3 players ). It doesn't matter how successful a game is, you make a better one and people will convert. I'm curious to see how many WOW subscribers defect to Conan: Hyborian Adventures. At some point you get sick of cartoony battles and need something more. WOW is phenomenal, don't get me wrong, but not unbeatable.

carlolsen
carlolsen

It seems to me that much of WOW's success is because it is a full game that encompases the fun aspects of many different games: - social interaction with other players, including most importantly the ability to explore new worlds with your friends - a reasonably decent update service that keeps the software up to date without having to deal with patches, and slow downloads, and crappy servers with advertisements. - decent servers that allow you to play with your friends, without spending all day trying to update everyone and find a server that has spae available and will put you on the same team. - nonplayer characters to interact with, when you don't feel social - the ability to play alone, or in a group - the ability to explore new worlds and discover new things - puzzles to solve, and quests to give you purpose - the addictive nature of building a persistent character - a reasonably decent story line, characters, and environment - fun updates to the game that make it seem like a real worls (for example, a carnival coming into town, holiday decorations, etc) - the ability to play highly strategically by learing all the innards of spells and such, or to simply sit back and "farm" brainlessly. The fact that you can choose to do either at any given moment, means it's fun to play no matter what your mood. - The ability to create and dress your character to reflect your particular fantasy. I don't think WOW did any one thing exceptionally. The graphics were good, but not great, etc. However, it did few things badly, and it encompased many of the fun aspects of all the games out there. I don't think it should be such a big deal for an experienced game developer to make a game better than WOW - just copy what they did, and improve. Update the graphics. Add some realism. Have more detail - Give me something worth buying a new computer for, but don't require me to. Give me the graphics of Crysis. Improve the AI of NPC's. Get rid of the minor annoyances. Make it so that you can't get a magic sword by killing a wolf! Make re-spawning seem more believable with more natural birth / death cycles. Maybe make it a little bit harder to gain levels, so you don't end up with a world full of bored level 70 gods. Maybe make it so that when you reach 70, you can die and re-encarnate as a new character that starts out at level 1, but with slightly better attributes and potential than other level 1 characters. (for example, maybe make it so that you cannot become a mage until you have lived a life as something else.) Reduce the repetitiveness by providing more variety, and shorter "farm" quests. Improve the dialog system with nonplayer characters. Perhaps also allow different classes to have significantly different methods of combat. For example, warrior classes might be more like FPS games, and magic classes might be more like WOW. ...and find some way to kill the gold farming industry! (One thing that might help, is to right-click on a player's name, and choose "report gold seller" - game masters could then review the players transaction history and take appropriate action for that character, and possibly others in the transaction history.) I quit playing WOW when I hit 70. I probably got bored with it somewhere around level 50, but felt compelled to keep going. I hope Blizzard is putting a good chunk of their billions into the next generation of WOW, because that should be something to say "wow" about.

dnvegeta
dnvegeta

i liked lord of the rings online better!

fullmetalsonic
fullmetalsonic

WOW is a mmorpg that made for gamers that want to see people thar way hell WOW is a game that people must try (i have the full game) and it fun as hell

snowyjoe
snowyjoe

I think the only reason WoW is successful is that it feels like a world Guild Wars, Tabula Rasa, Pirates of the Burning Sea, EVE, are all great ORPGs, but they just don't feel like a MMORPG. From all my MMO playing days, WoW is the only game that made me feel like i was in another world, a new world where i can explore, find friends and defeat foes. All the other MMOs are still good but it feels like your tied to somthing, like your just controling your charater with a mouse. Like Guild Wars, it feels like a game where you controle your charater using the mouse and keyboard. But in WoW the mouse and keyboard feels like your own very hands. The only thing all the other MMO's don't have to WoW is the feeling of being in a diffrent world.

Nick_Rc
Nick_Rc

i agree with most comments that a different combat system instead of this wow clone crap and creativity would make good MMO but i doubt anything can get the numbers like WOW. WOW is easy to play it requires little thought and no skill 10 million players and about 7 of them are most likely under 16, i don't think i ever met a mature player on WOW its like the Wii anyone of any age of any skill can play and GRIND (god i hate that in a MMO) to lvl 70

A4Audiguy
A4Audiguy

I Played WoW for a couple years and loved it...and got tired of it. Shortly after TBC came out I stopped. Now I have been waiting a long time for another awesome mmo to come out. I'm hoping WAR will do it, but we will see...

rbenns2
rbenns2

How can the publisher of Grand Theft Auto be strapped for cash?

RaiKageRyu
RaiKageRyu

In other words, if you can beat them, join them.

Amnennar
Amnennar

it wont take $500M to make a WoW killer - it will take creativity. the reason no games beat WoW is because every single MMO that is released is always a WoW clone. mostly all MMO companies are afraid to do different things. WAR, for example, is basically going to be a WoW clone with updated graphics - dont expect an awesome MMO. AoC is just a cesspool for perverted teens. those both games arent gonna kill WoW. i dont get why there isnt any MMOs with different combat systems - i am tired of these boring "sit there and auto-attack while pressing 1 button when my cool-down is done". - thats every MMO. and besidies that - almost every MMO has very awful chara creation where you cant even be unique. Phantasy Star Universe had the BEST chara creation in any MMO and very good game play(it was hack n slash). too bad SEGA never does anything about the hackers and doesnt update the game - thats why i stopped playing it. i would really love an MMO that has the same combat as like DMC for example - where its hack n slash and you have to chain combos AND actually dodge enemy attacks yourself, not rely on some stupid block/resist system - now that would take skill. no current MMO on the market now takes skill AND that is why every single MMO these days are stale - they are ALL clones.

Citan76
Citan76

I'm having plenty of fun with LOTR Online. I played WoW and it is a good game but LOTR is great too.

DullBozer
DullBozer

I played Wow for 2 months and i now call it World of Redundance, honeslty how many times can a game make you kill the same enemie over and over again? Apart for the occasional change of scenery that occurs every 10 levels or so everything you kill eventually just appear to be walking 3d xp points. I haven't played since and do not plan to do so ever again. I would be curious to see a Warhammer 40k or a Starcraft MMO though, but the two themes i can't stand anymore are D&D and WWII, gimme horror and Sci Fi.

valcrist09
valcrist09

idk unless Conan and Warhammer get released soon and have the content they promise at the start, i dont see those games denting WoW. As of right now i am not impressed with either Conan or Warhammer from the betas i have messed with and with constant delays that will just make WoW even stronger, esp with a knew expan just around the corner.

Taegre
Taegre

Without The Matrix Online, I've no reason to play MMORPGs. If I can't have dreadlocks, martial arts, modern clothing, the ability to jump from skyscraper to skyscraper, independent ingame radio, and dice-based combat that's still amazingly fun to watch, and epic large-scale battles erupting by complete surprise and involving many enemy players to work together to survive, its not worth the subscription fee to me. But it seems like it's going to be very hard for people to find true satisfaction in MMORPGs for some time. If your tastes aren't already in tune with what WOW gives you, you'll have to search for an obscure game that gives you what you want for the scant months you'll play it before it's shut down. Hell, I'd give anything to have the experience I had in three months of MxO again, but not many RPG players share my burning desire for cross-genre setting and shifting stories.

quietcool72
quietcool72

grigjd3, I see what you are saying. I just don't believe that there's been very many good attempts. SOE's Star Wars Galaxies was a fumble of what should have been a primo license and a big world to design for, but the quest design, interface, and concept was straight amateurish. Sony took a pre-existing engine and tried to re-capitalize on it. Then there was Matrix Online... yeesh. LOTRO is a quality game, which I also own and play, but the province of Eriador is quite limiting considering the areas not built yet.. (Rohan, Mordor, Misty Mountains, Gondor, Mirkwood... I think LOTRO gamers are getting very impatient in Eriador...especially when WoW shipped with 2 entire continents. Turbine is going to have to really start delivering expansion content or lose more subscribers. If anything, Turbine is playing it safe, not wanting to overdevelop a game that might not sell... but now that piecemeal approach to fleshing out Middle Earth is starting to backfire. I will definitely be interested to see how Warhammer Online goes. I'll definitely try it because of its promised PVP (and world PVP) focus. It will be interesting to see how EA/Mythic balances a game like that, particularly with the numbers game. The most popular factions are going to have more players. More players means World PVP will be slanted towards the side with the most players. I wonder how that will be addressed. But- back to the original point- I think if anything, Metzen and the Blizzard bunch threw down the "Tony Soprano" gauntlet with WoW. "If you are gonna show up, show up heavy, or don't show up at all."

mopeyking
mopeyking

I Don't think it would take a billion dollars to beat wow. How much did it cost to bloody well make world of warcraft ?? We will see once AoC and WAR are released soon any way. How many people have are just playing wow because there is nothing else on the market or the tons of people who left and are taking a break from mmo's till something good comes around. WOW is not invincible, it has horrible end game that only a small fraction of the games population ever try to do and in the end it's just a waste. The pvp is horrible... there is tons of ways to improve the mmo market, make a good fps mmo or something for all the bloody fps fans, who spend most their time online any way... anything, you will never know untill you try!!

nobeaner
nobeaner

As far as Take-Two not being good acquisition for them, he does state some interesting facts. Take-Two has been in the news a lot for stock and money issues which I chalk up to bad management since they have one of the most killer apps in GTA.

nobeaner
nobeaner

Thanks Blizzard! Now the bar is set so high that I'll never be able to play a different MMO that will be just as fun and addicting... Wait a minute. Now tell me how this is a bad thing again for MMO players? Oh, I see. It's only bad for those that HATE WOW. Personally, I don't play MMO, but if I did too much fun would be the least of my worries.

grigjd3
grigjd3

queitcool72, I agree that it's good for WoW to have done such a good job. The problem with the investment requirement being so high to produce a competing MMORPG is that this keeps out competition. The gamers would suffer if ten years from now, WoW is still the only MMORPG that can attract an audience. Essentially, if nobody tries, there's no reason for WoW to continue to be good.

jfpl138
jfpl138

@140lbstud... wow, why aren't you in the game development business? i hope you weren't being serious.

quietcool72
quietcool72

node_runner, Good points. I also find it funny that a game comes out and sets the bar incredibly high and that's somehow a bad thing? I guess Blizzard should have half-arsed it so other devs would feel comfortable releasing a competitive half-arsed product? Many publishers would like to copy Blizzard's success with WoW, but they realize the programming time, infrastructure, tech support staff, etc. are costly. So they are afraid. With MMO's you can't "fake it". First you have to make the game, then you have to support it and expand it. They generally aren't "quick hitters" where you can jump to another product easily if it doesn't perform. And that was the case even before WoW.

node_runner
node_runner

"Comeon,how long could the thing last,the graphics are getting outdated.The only problem is people spent way to much money and time on their accounts to ditch them.It's a curse, life's to short,if you play WoW get away from it as soon as you can and spend a more reasonable amount of time on Xbox Live,but in WoW people spend like 8 hours in a row.it's ridiculous,they're paying Blizzard to suck their lives.Unbelievable." I really don't understand people that feel they have to rag on WoW players. We really don't rag on people that don't play, so why the hostility? We get it, you don't like the game and you think it's a waste of money, time sink, grind fest, etc. Well, maybe we like the level grinding? My wife and I play it to both save money and have fun together, much better than goin' out every night and getting sloshed for 70-80 bucks a night, so it isn't a waste of money for us. Some people say it's addicting. I agree, but I would much rather have my child addicted to WoW than some drug out there on the street. At least I would know he's safe at home and not causing or getting into any trouble. In reply to your graphics statement...are you kidding me? Look at Everquest, that game is old as the hills and still making money. WoW's graphics engine is dated yes, but it's the art style that makes it a beautiful world to look at, not the amount of poly's the game is pushing. Bottom line: Why waste your time bashing the game if you don't like it? Spend that time playing the games or doing the things you like, and get off other player's backs.

a140lbstud
a140lbstud

I have a simple way to compete in the same class as WoW. Console based cross platform- ps3 and 360 Make pvp a huge part. Have real risks and Rewards for killing other players. Add sub skills other than combat, make a player driven economy in a game. Release 1-2 updates a month downloadable for free Cost $10-15 a month. Boom you are rich.

quietcool72
quietcool72

Also Rhybo... you applaud COH because "you can make your own superhero". Explain to me how the mandated super hero archetypes are any different than WoW's classes? (COH archetypes are Blaster, Controller, Defender, Scapper, Tanker). Hmmm...versus Mage, Priest, Paladin, Warrior, Shaman, Rogue, Warlock, Druid, Hunter.. Explain that big difference again regarding uniqueness? Admit it..you just hate WoW.

quietcool72
quietcool72

Rhybo, You called WoW the "Wallmart of MMO's?" I think its quite the opposite. Remember MMO's before WoW? Look at the absolute disaster that was Star Wars Galaxies. Sony tried to cash in on a license with a cumbersome, poorly developed game to make a buck. Now that WoW is the standard for stability, user intuitiveness, etc.... you aren't going to see the half-baked license cash-in MMORPGs that bring such mediocrity to the table (if that). Look at Warhammer Online. I particularly doubt EA/Mythic would have waited this long to release it, flesh it out, and get it right- if it weren't for WoW. (Heck, it probably would have been released in whatever form 2 Christmases ago). But now even EA realizes they have to bring their A-game. Is that bad?

Rusmurf
Rusmurf

That's a pretty dumb way to look at it, you don't need to equal WoW revenue to make money. Unless he is intimating that they(Blizzard) are stifling all MMO development, a giant conspiracy to crush all MMOs and forced people to pay for WoW only. I see lots of startup MMOs appearing and dying all the time, because they suck. It is actually hard to actually make a good game, when your only goal is to make money....

Rhybo
Rhybo

Well this sucks... future, possibly (probably) better MMO's are now unattractive to game developers and companies because of the high risk/ low profit probability. Thank you Blizzard, you are now the Walmart of the MMORPG market. I think City of Heros is more fun than WoW, mostly just because you get to make your own superhero.

quietcool72
quietcool72

dragkill, Well, if you think that EverQuest is the way to go with your uber-leet self, knock yourself out. Its funny to see these self-described "hardcores" rail against WoW. Okay- move on then...go play that game. But judging by the subscriber numbers for those other games- maybe the realization might hit you that the stuck-up uber-leets who hate on WoW... ..are in a SERIOUS minority.