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Activision twelve-month digital revenues $1.7 billion

Kotick says digital investments have left competitors "chronically unprofitable"

Activision-Blizzard president Bobby Kotick revealed that the company's digital business has generated $1.7 billion in revenues in the last year.

Speaking at an investor event yesterday, Kotick championed the company's culture of "discipline and rigour", which allows it to "avoid costly mistakes, speculative investments and distractions."

"There are many ways to define industry leadership," he said. "On relevant financial metrics, like operating margins, return on invested capital, and long-term shareholder value creation, we have few equals."

"And not just in games and entertainment, but throughout all industries. In fact, our 20 year record of delivering investor returns is among the best of all US public companies."

Kotick credited this consistent performance to its "focus and prioritisation of opportunities", of which its burgeoning digital business is a prime example.

In the twelve-month period ending June 2011, Activision-Blizzard's digital revenues were $1.7 billion - up from $1.2 billion over the twelve-months ending June 2009.

"No idle promises, no traveling hopefully, three years of margin accretive, consistent, highly profitable growth," he added.

"Digital revenues are associated with very high margins today, and we expect our digital revenues to continue to increase well into the future."

Call of Duty now has 20 million MAUs, with a further 15 million MAUs spread across Blizzard's key franchises. The low cost and high returns associated with these digital services have increased Activision's non-GAAP operating margin from 12 per cent to 22 per cent in just two years.

In addition, Kotick suggested that the company's ability to invest heavily in its digital services has had an adverse effect on its competitors.

"The high margins generated from these subscribers and players gives us the resources to invest in our properties in ways that have rendered others chronically unprofitable."

Kotick's statement contradicts comments made by Eric Hirschberg at GDC Europe. In his keynote address, Hirschberg criticised EA for its "mud-slinging" tactics over the rivalry between Modern Warfare 3 and Battlefield 3, and claimed that there were enough gamers to make a number of similar products successful

"This isn't politics," Hirschberg said. "In order for one to win, the other doesn't have to lose."

"We shouldn't be tearing each other apart fighting for a bigger piece of the pie - we should all be focused on trying to grow a bigger pie. If we as an industry act like there's a finite number of games in the world, then there will be."

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Matthew Handrahan avatar

Matthew Handrahan

Editor-in-Chief

Matthew Handrahan joined GamesIndustry in 2011, bringing long-form feature-writing experience to the team as well as a deep understanding of the video game development business. He previously spent more than five years at award-winning magazine gamesTM.

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