Analysts bullish on Activision-Bungie alliance, 10 million sales predicted

[UPDATE] EEDAR's Jesse Divnich calls 10-year deal "a win-win for the entire industry;" Pachter predicts blockbuster sales; Schachter, Hickey, Wilson point to earning potential, Infinity Ward fiasco deflection.

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This morning, Activision broke its string of poor publicity with word that it had signed Halo creator Bungie to an exclusive 10-year publishing deal. The partnership gives Activision international publishing rights of a new, unnamed intellectual property created by Bungie through 2020, one that will be available on all relevant platforms.

Bungie fans are starting to get an idea of what's next after Halo: Reach.

So how do analysts view the deal that will see Activision lording over the next big thing from the 25-million-unit-selling studio? Positively, of course. According to Electronic Entertainment Design and Research vice president of analyst services Jesse Divnich, the Activision-Bungie partnership isn't just a positive for the two companies; it's a win for the industry as a whole.

"A Bungie/Activision relationship is a win-win for the entire industry," he said. "Bungie retains property and creative rights, Activision is a top-tier publisher, which gets a Bungie game on retail shelves worldwide, and a huge win for consumers, who will finally get a multi-platform IP from the Bungie team."

"I've seen many comments about Bungie selling their 'soul' on this deal, but that is not the case," he continued. "This agreement with Activision is one of the best things that could happen to Bungie and for the gaming community. It doesn't matter how great an independent developer may be, you still need a publisher. Making an impeccable game is only half the equation, because without a retail infrastructure your game will go nowhere, literally."

Divnich also pointed out how the deal echoes that of the Infinity Ward castaways at Respawn, who signed a publishing deal with EA as an independent studio. He noted that the industry appears to be reversing the consolidation trend it has been on for the past 15 years.

"Since 1995, we have seen enormous consolidation of large independent studios, but what we've been seeing lately is that a lot of the creative minds that helped build these billion dollar properties (Sims, Call of Duty, etc.) simply do not thrive in a corporate environment," he said.

[UPDATE] Though details remain nonexistent on what, exactly, Bungie's next project will entail, Wedbush analyst Michael Pachter believes that the studio's name alone will result in unit sales in the 10s of millions.

"My guess is that any future Bungie game will sell at least 10 million units, as they will appear on multiple platforms for the first time," Pachter said. "As a reference, the typical Halo game made by Bungie sold around 10 million units worldwide over its life at an average retail price of around $50, and these appeared only on the Xbox/Xbox 360. If future Bungie games are as popular as Halo, they could sell as many as 15 million units on Xbox 360 and PS3 combined."

Pachter also believes Bungie's first Activision-published game will arrive in 2011, with subsequent installments following every two years.

A variety of other analysts also offered approval of the deal, due to both its ability to generate cash for Activision and its timing to deflect attention from the increasing turmoil at Modern Warfare 2 studio Infinity Ward.

"We think this is a very important win for Activision and liken it to the equivalent of signing a 10-year deal with Stephen Spielberg," commented Broadpoint.AmTech analyst Ben Schachter. "That said, we suspect it was a very expensive deal for Activision to win as well, although the company would not provide specifics on terms of the agreement."

Schachter went on to note that "the announcement should put to rest any concerns about whether the well-publicized issues at Infinity Ward would limit Activision's ability to attract key developers." Janco Partners' Mike Hickey echoed those sentiments, saying, "Clearly, Activision continues to be a solid partner for some of the biggest and brightest developers in the world."

Lazard Capital Markets' Colin Sebastian noted that the deal will go a long way in diversifying Activision's current portfolio, which he believes is heavily reliant on the Call of Duty franchise. "We believe that the new publishing agreement with Bungie provides additional long-term visibility for Activision Publishing, which currently is largely dependent on the Call of Duty franchise for the bulk of its operating profits," he said. "As such, we view the deal positively."

Investors have also taken keenly to Activision's new partner. The publisher's stock was trading up 2.84 percent, or $0.31, at $11.24 as of press time.

Discussion

111 comments
Sweendrix
Sweendrix

Dear Bungie: Do not underestimate the power of having an incredible single player campaign. Thanks.

wars45
wars45

i got a ps3 and am not fussed about halo

kmconstable
kmconstable

So now Activision can kill off Bungie in a few years as well. They were not happy with MS and will eventually be unhappy with Activision.

denicola_a_god
denicola_a_god

wat a deal this is activision is going to take over the world within 5 years lol

drokmore
drokmore

Nooo, Activision getting its hands on another one of my favorites... Kotick must die...

jamesm7786
jamesm7786

@toadman682000 True true, but I think things got out of hand in the mid 90's around the time of the playstation and such... is it coincidence that this also the time when gaming started becoming the mainstream monster that it is today...

icekids
icekids

Activision must be thinking right now (damn if we had abandoned the PS3, we would not have sold 40 million games on the PS3) will now sell millions of copies of BLACK OPS and MW3 on the PS3, and still had an agreement with Bungie to bring ,,,,,, PS3 games for the life of many turns, but is forgiven by me dear Activision

blancobo
blancobo

"Pachter predicts blockbuster sales;" the same Pachter that predicted that IW could loose 30 people and still make a "competitive" product and now... well coworkers are stating the opposite. I am not listening to this Pachter... one of you guys can take his job and earn his paycheck which apparently is earned from making up crappy assumptions and well stating theories caught from mist and air. Go home Pachter... I am tired of your BS.

bennae66
bennae66

they can finally release the dream game they have always wanted: Call of the World of Halow. it will go gangbusters. (they would have called it Call of the World of Halo, but i doubt microsoft would allow it) - edited; i put made instead of released; duh!

toadman682000
toadman682000

@jamesm7786 Maybe time to read some history, the game industry has had corporate issues for years ^_^

icekids
icekids

I have a prediction ..... Megan Fox will you marry me ^_^

shani_boy101
shani_boy101

I hope this fails just because i want to see Activision burn.

jamesm7786
jamesm7786

Isn't it magical how "analysts" can just screw things up? Blah... I miss the days when there was not all this drama in the video game business, but greed won the battle many years ago and things have never been the same... I know I'm not the only one who feels this way... Also,I'm sure that I'm not the only one who feels as if the consumer is not being listened to... ENOUGH FREAKIN' SEQUELS ALREADY!!! CAN'T WE GET SOMETHING NEW INSTEAD OF A SEQUEL OR CLONE???

digi-demon
digi-demon

Bet Kotick is loving Bungie deal now... lets hope its not an 'Oni spin-off' in the pipeline or heads will roll (again) LOL.

Ladiesman17
Ladiesman17

Pachter = Fortune-teller wannabe!!! LoL ;)

Quezakolt
Quezakolt

I hope for a world where "analysts" are taken for what they are : dangerous and irrelevant.

wwlettsome
wwlettsome

"My guess is that any future Bungie game will sell at least 10 million units, as they will appear on multiple platforms for the first time," Pachter said. "As a reference, the typical Halo game made by Bungie sold around 10 million units worldwide over its life at an average retail price of around $50, and these appeared only on the Xbox/Xbox 360. If future Bungie games are as popular as Halo, they could sell as many as 15 million units on Xbox 360 and PS3 combined." Here the analysts go again...extrapolating huge sales based on new information regarding Bungie's new IP. I hope they do great things but there is zero info to go on right now. Calm down Pachter, your man crush on Kotick is showing again.

wwlettsome
wwlettsome

"We believe that the new publishing agreement with Bungie provides additional long-term visibility for Activision Publishing, which currently is largely dependent on the Call of Duty franchise for the bulk of its operating profits,"...in large part because Activision has done a very thorough job of destroying their other valuable IP's.

halomonkey1_3_5
halomonkey1_3_5

makes me wonder if Bungie sold their IP to Activision or if they just have publishing rights through 2020...

Wallenstein_155
Wallenstein_155

@dlCHEIF58: Thank god someone else actually READ the article. Nowhere in this article, or any article for that matter, does it say that Bungie has been bought out. Bungie is simply using Activision's publishing power for this new IP. Of course it also shows that very few people decided to read my previous post. But of course people will let their emotional anger of Activision dictate their irrational judgement without even reading the article.

dlCHIEF58
dlCHIEF58

@colt_a Sir you are an idiot. Activision didn't buy anything, they only signed a publishing deal with Bungie for the new IP they are producing ONLY. Microsoft still holds the rights for Halo, not Bungie. And Bungie is still independent and not owned by Activision so they cannot dictate when or how many games Bungie makes other than what they signed up for in the contract. Bungie retains all rights to this new IP so when deal is done in 10 years, they can take that new franchise and publish it with whoever else they want and not worry about Activision milking it away like they have done so many other franchises as you mentioned (except for WoW - Blizzard still has complete control over their development and release cycle, not Activision).

The_Jackle
The_Jackle

@Colt_a Activision own Bungie not Halo. Microsoft own Halo and can get any publisher they want to start making Halo games and spin-offs. Also, I can't see Activision losing the rights to Modern Warfare let alone the whole CoD brand (unfortunatly). However I do agree that whatever Bungie make Activision will force it into the ground with 10 titles a year from 8 different developers.

The_Jackle
The_Jackle

"Bungie retains property and creative rights" why do I get the feeling that their rights will erode away the closer they get to the release date. Deals have happened where Publishers with exclusivity rights have refused to publish games unless they get given more control over the property. With no one else legally able to publish their work, the developer can't get the game released and cannot make money off of it, leaving them no choice but to hand the rights over to the publisher. Activision already tried this with Brutal legend when they didn't want EA publishing it.

colt_a
colt_a

Activision is buying Halo because they will likely lose CoD rights to Respawn and they know it. Expect after Reach, for Bungee to start making a new Halo every single year that has close to no changes and starts to go downhill the same way everything does when Activision touches things. Tony Hawk, Guitar Hero, CoD, WoW, etc. Its sad to say that Halo will be on that list come 2-3 years from now.

Inconnux
Inconnux

Activision is using the same strategy that brought EA down... destroy a studio... buy another.

Yakuz-A
Yakuz-A

Real shame that Activision-Blizzard got their filthy hand on Bungie.

ekultus
ekultus

Pachter is an idiot, an errand boy sent by grocery clerks to collect a bill. Corporate scumbag!

fps_d0minat0r
fps_d0minat0r

how can they predict sales without knowing anything about the game? i forgot, its from pachter who predicts natal will outsell the move 5:1 without knowing the price or games lineup.

xxgunslingerxx
xxgunslingerxx

Do you guys think the developer really matters that much to the causual fan? I personally dont think it will make that huge of a difference cod5 still sold tons and im pretty sure just as many people will buy halo 4 regardless of who develops it. After sports games the number 1 game casual gamers play would be shooters so im pretty sure at least 2/3 of the halo players dont even know/care who bungie is

silverlife
silverlife

another food (bungie) for the monster (activision) to eat

monco59
monco59

"and a huge win for consumers, who will finally get a multi-platform IP from the Bungie team." Well that still remains to be seen. As they did with MW2, Activision could hike up the price of Bungie's game simply by merit of brand recognition. After all, people were willing to pay $10 more for a game by IW, why wouldn't they be willing to do the same with Bungie?

shadow_571-22541122563806274050163500801227
shadow_571-22541122563806274050163500801227

At this point, I can only imagine that Activision is still the same, and they'll pull Bungie's Strings just like they did with Infinity Ward's, destroying another successful company. Great, Bungie just signed a very bad deal.

Pierce_Sparrow
Pierce_Sparrow

Irregardless of how well this deal goes, this is just Activision sticking their noses up at Infinity Ward and it's a poor practice. All Activision is doing is letting the industry know that it is able to do whatever it wants, which is ridiculous. They should be punished for how they treated Infinity Ward, not rewarded. I really hope Infinity Ward wins their suit.

edwise18
edwise18

@chupamelpo This isn't the end of halo, as microsoft owns the rights to anything having to do with halo. But I do think that any future halo games just aren't going to be the same without bungie. And come on poeple, bungie is still independent, activision doesn't own them like it owns Infinity Ward, wich prevents a situation like what happened to Infinity Ward to occur.

laofuzi300
laofuzi300

I don't care who they sign deal with, as long as this game is no longer part of the Microsoft.

Glade_Gnarr
Glade_Gnarr

By god I just realized, think of the sales of this series.

chupamelpo
chupamelpo

The end for bungie The end for Halo ACTIVISION STAY AWAY FROM EPIC. i don't want to see the end of Gears

Rev8691
Rev8691

bungie just signed the worst deal of their life. should of went with Ubisoft or something...

Blade8Aus
Blade8Aus

eventually they will repeat the moves IW employees have made...

AlphaCommando
AlphaCommando

I don't see how they think they're going to make phenomenally more sales. All PS3 fanboys aren't going to buy a Bungie game.

Sasuga
Sasuga

Hey, as long as Bungie stays awesome, it'll be all good.

nevryn
nevryn

@PewPewNinja Yep, you're right on the money, was about to say something similar, but you beat me to it. Also to dismiss some confusion, first off, no current franchise has been affected at all because Microsoft still owns Halo so AV will have nothing to do with it. As for the same thing happening to Bungie as IW, that's not going to occur because the nature of the relationship is entirely different. AV owns IW and has direct control over what games they make and who works there. AV merely has a publishing contract with Bungie which means they're still independent and make their own decisions (as long as they follow the stipulations in the contract such as when progress is expected etc). Even if things fall through, the worst that can happen is AV sues them for a breach of contract, they can't go in and just fire people. It really is a huge plus for both companies, Bungie gets the money and marketing power of AV, while retaining their independence, and AV gets the Bungie name. Whether that will equal a good game or not, is an entirely different question, that I don't have the answer to.

Flint247
Flint247

If this stops all the suing and other chaos we're having, then I am fine with it.

KimCheeWarriorX
KimCheeWarriorX

I guess alot of people here didn't read the other article about Activision's deal with Bungie about how Bungie doesn't own the Halo name, Microsoft still does. So no, there's not gonna be a multiplatform Halo game. Bungie plans to work on a brand new IP but it'll still probably sell just as well just because people will see that it'll be produced by Bungie.

yang4200
yang4200

lol.. infinity ward 2 .... how much money is actigreed going to witheld this time

Dtnoip28
Dtnoip28

@yaba Wait, how has Bungie been "unethical" in the past?

Falmar
Falmar

Damn, this is a no-win for every gamer, just picture worthless dlc's priced above 15 usd each!!!

AlaRubra
AlaRubra

Halo+MW2= Future Warfare? Halo+MW2= Lots of glitches? Yay?