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managing a burgeoning portfolio of studios had slipped
into a counterproductive pattern: Identify an extremely
popular game, buy the developer, delegate the original
creative team to churn out sequels until either the team
burned out or the franchise fizzled, and then close
down or absorb what was left.
On the other hand, EA still sold a lot of video
games, and to Kotick, the basic tension in EA culture
wasn’t entirely surprising: Clearly the business of mak-
ing and marketing video games succeeded when the
creative side of the enterprise was supported by financ-
ing and distribution muscle, but it was equally true that
a steady stream of successful games came from the
company’s creative people. The key to getting Activi-
sion back in the game, Kotick decided, was managing
this complex of essential resources better than his com-
petition did.
So the next year Kotick moved the company to Los
Angeles and began to recruit the people who could fur-
nish the resources that he needed most—creative
expertise and a connection with the passion that its
customers brought to the video-game industry. Activi-
sion, he promised prospective developers, would not
manage its human resources the way that EA did:
EA, he argued, “has commoditized development. We
won’t absorb you into a big Death Star culture.”
Between 1997 and 2003, Kotick proceeded to buy no
fewer than nine studios, but his concept of a video-
game studio system was quite different from that of
EA, which was determined to make production more
efficient by centralizing groups of designers and pro-
grammers into regional offices. Kotick allows his stu-
dios to keep their own names, often lets them stay
where they are, and further encourages autonomy by
providing seed money for Activision alumni who want
to launch out on their own. Each studio draws up its
own financial statements and draws on its own bonus
pool, and the paychecks of studio heads reflect compa-
nywide profits and losses.
The strategy paid off big time. For calendar year
2007, the company, now known as Activision Blizzard,
estimated compiled revenues of $3 8 billion—just
enough to squeeze past EA’s $3 7 billion and sneak
into the top spot as the bestselling video game pub-
lisher in the world not affiliated with a maker of
game consoles (such as Nintendo and Microsoft).
Revenues for calendar year 2012 were $4 6 billion, up
more than 22 percent over 2009, making Activision
Blizzard the number one video game publisher in
North America and Europe. Today, its market capitali-
zation of $14 5 billion is twice that of EA.
Kotick attributes the firm’s success to a “focus on
a select number of proven franchises and genres
where we have proven development expertise… .
We look for ways to broaden the footprints of our
franchises, and where appropriate, we develop inno-
vative business models like subscription-based online
gaming.”
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