Activision Loses $1.5 billion market cap b/c of Destiny

On September 9th, Destiny launched bringing the valuation of Activision Blizzard's stock, ATVI, to 23.73$ at its closing, close to an All-time high of 24.18$.

The past few days however, it seems investors are singing a different tune due to Destiny lukewarm reviews and disappointing sell-through - over 500 million $ worth of shipments were sent out to retailers - nonetheless only 325 million $ sold-through thus far effectively leaving 175 million $ worth of inventory on store shelves.

As such, ever since the launch of Destiny, the stock has now rapidly declined, losing over 10% of its valuation to where it stands currently 21.60$ ish - 1.5 billion $ erased from ATVI's market cap in just a few days.

Thanks to NeoGAF for collating this information.

Bad reviews and lower than expected sales due to bad word of mouth have caused an immense, real loss to Bungie (over $2.5 million in expected bonuses), and Activision a staggering $1.5 billion in market cap.

It's a warning, if there ever was one, that the traditional AAA model may be on the verge of collapsing.

Can someone hear the eventual crash

That what happens when you make a mediocre game

Good.

I hope this rings a strong enough warning bell for the entire industry, so that they may rethink their ways of excessive marketing & hype while leaving the game's actual quality in tatters.

...and then COD releases and it's back up to normal

Provide more content. The crash could be oncoming, but Destiny seems to have a distinct lack of content. My brother was rather underwhelmed with playing it on the PS4... All aspects seemed to be difficult (highest being forming a fireteam).

Guess you should sell your stock then : |

Call of Duty has been in a steady, uninterrupted decline since the release of Modern Warfare 3. Activision themselves said that pre-orders for Advanced Warfare were low year on year.

hopefully the next cod game suffers as a result

Well I know it's been in decline but they still sell really well, and get better reviews then Destiny. They also own the skylanders brand which I understand is popular with children (?)

Skylanders is fine, it's the only immune brand they have. But Call of Duty is in decline, and judging by Ghosts, this is not just limited to sales but also scores; World of Warcraft is in a huge contraction phase, Guitar Hero and Tony Hawk are dead, and all Activision has at this point is Diablo and Hearthstone, as well as the final Starcraft II game. Amusingly enough, none of those are true Activision games.

Activision sucks. Kotick sucks. This has been going on for years now.

If this game disappoints, then make a better game. This game was never part of the traditional AAA model (Bungie's 500 Million deal) and the Bungie new model of creating an MMO meets Borderlands crossed with Halo on consoles across four machines wasn't traditional either. Having no semblance of a true Single Player mode certainly wasn't traditional. I don't see it as a warning to the model because this game wasn't apart of the traditional model to begin with. It was an experiment that went awry.

What I do see is that once again another average, run of the mill scoring game didn't do as well as they hoped.

I see this as a good thing. Marketing budgets for games were exceeding the game's creation budgets and it was getting ugly. This should be a slap in the face demonstrating to greedy publishers like Activision that it will take more than marketing and blowing smoke up the prospective buyer's asses to get people to buy your crap. Spend more on the game development.

I haven't bought a game from them in years. Get back to basics, Activision.

Sadly I don't see that happening just yet, maybe not for another few years maybe. The sooner the better.

Meh, a few dollars in stock prices doesn't affect much. These fluctuations are expected but are extremely short term. It will go back shortly.

Since when is spending $500 million on one title "traditional"

People are dumping stock at the peak leading to a runaway event. The only reason the stock was up that high in the first place was because of destiny.

LOL!! You know Activision will try to miilk this game to death to recoup extra money for it. Their advertising expenses were probably through the roof.

And this is why too much ambition is not a good thing.

Tone down on ambitions and focus on functional core that is fun, tack too much shit on and you will have a mess with no various elements conflicting with eachother. But like someone else said, the reason that stock was probably so high in the first place was because of the destiny hype.

much better performance than kingdom's of amalur, but still, i feel like people haven't learned the lesson from kingdoms of amalur.

Does Activision collect their net income from sales to retailers or to consumers? If it's the latter.............oh boy Acti

However, people need to keep in mind this is for the first week. In an additional 3 weeks, it's probably expected that they'll sell the rest well enough and make profits.

So no, it's THE END OF THE AAA MARKET. DOOOOOOM. yet

None the less, wasn't it reported that it made a profit already?

I'm tired of these mega-publishers hyping mediocre games as the second coming of Jesus. Hopefully that inventory sits unsold through Christmas and maybe they will think twice about pulling this shit in the future.

Somebody tell Rockstar that GTA5 never happened. They're on the verge of collapse.

This is though, these people we are talking about don't care for the games that being created, all they see are numbers and if the numbers don't add up then they get skittish. They are looking at a $175 million shortfall on their return. I've seen companies go under for less than that.

that's what happens when you spend $500 million on a game, if they'd of spent $100 million they'd of made a $225 million profit by now

something tells me though it will make it's budget and turn profitable in a matter of weeks, hell there's nothing else really out and no competition on the horizon, continued sales could take this up to billion dollar territory, slowly but surely it'll continue to sell

You say that like call of duty isn't also popular with children... lol

This is a very good thing. Show publishers and developers alike that hype and advertising won't sell a mediocre or half-decent game anymore. If they raise expectations, the final product must meet or exceed them for there to be success.

Serves them right for hyping $500m in sales that they didn't actually achieve.

Biggest ever IP launch my arse.

@CroidX: Who's talking about you?

because ms never milk their franchises

As someone who is enjoying Destiny, good. It should have been a much better game.

Absolutely.

doubtful... all Activision has to do is say "Hey M$ we got this thing for the new COD..."

M$ - "Whatever it is, well pay you $50 million for it to be time exclusive on XBOX."

Activision can always squeeze out money from M$.

And lets not forget that M$ will most likely pay again, to have the next Titanfall as an XBOX exclusive.

Titanfall has nothing to do with Activision :/

If only this would happen to Paying for online gaming and Purposeful Missing content that's released later as DLC such as the ending to the game

Only 325 million?! Holy crap everyone else would kill for a third of that. And 175 million worth of inventory means shit when many are holding back till the holiday season at this point.

xD

Saw this one coming...leave it to corporations like Activision to hype a game to the high heavens and not deliver. Can't say they don't deserve it.

No they didn't make 3/5's of their investment back, you see, that's revenue, not profit.

Id be surprised if they made a profit considering how much they've blown on advertising + they may have to write down their stock to sell it off it looks like.

Everything needs to be viewed in context, especially this game. Activision shipped out $500 million worth of inventory, after spending $500 million on this game. They made only $325 million in revenue, which is not only 65% of what they had expected, but also not the final sum that they get to keep, considering that revenue has to be split with all parties involved in the process. In fact, there is right now a very real possibility that this game doesn't make a return on investment for Activision. Which is sort of shocking, but also something I began to suspect once I realized Activision hasn't actually shared the sales numbers with us even once yet.

@charizard1605:

Activision is pretty sketchy when it comes to actual sales number like with COD Ghost

I'm still wondering where $500 million of that money went. Not many celebrity voice actors, no high class animation, soundtrack was done in house, only one cgi cutscene, etc. Where in the world did all that money go?

@JangoWuzHere: went towards 10 years of games, setting up an infrastructure for future expansion packs and comets. Plus destiny 2&3, which will still come out because they have too at this point to have a chance at getting money back.

If everyone somehow came out the other side with their job, I'd more than welcome it at this point. AAA titles these days are shallow as **** for the amount of money going into them.

I'm glad its failing. The AAA model isn't self sustainable without massive sales to back up all the advertising involved. There's probably more spent on trying to build a hype train than to develop it. Its bad business and the games should be able to speak for themselves.