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Activision: Proven blockbusters pave the way for new IP

Publisher cautiously releasing original brands backed by new franchise favourites

A confident Activision has boasted of its "world class" brands as it strides into the year with an enviable portfolio of proven franchises and a handful of new IP.

Sequels to the big hitters – Call of Duty, Tony Hawk, Guitar Hero – are all on the cards for 2009, helping to boost profits while the publisher tries out a handful of new IPs on the market.

New projects released this year will include a James Bond racing game from Bizarre Creations, Prototype, the open-world action title picked up during the merger with Vivendi Games, and new first-person shooter Singularity.

"We conservatively manage our portfolio risk profile by generating the majority of our revenue and operating earnings from the more predictable and stable franchises that have served us well over long periods of time," detailed CEO Bobby Kotick, in a call to investors.

"We’ve taken even more thoughtfully, rigorous and measured approach to launching new intellectual properties than we do to long-standing franchises as the introduction of new IP is one of our industry's most difficult challenges," he added.

As well as tie-ins based on upcoming X-Men, Transformers and Ice Age movies, the James Bond franchise is receiving careful attention at Activision.

In addition to the Bond racing game, Bizarre Creations is also working on another game based on the character, although this has been pushed back so as not to compete with the release of the next Call of Duty game, said president Mike Griffiths.

"We made a strategic decision to move our next James Bond release from late 2009 to 2010 to benefit from a better launch window and avoiding having to compete with the large holiday line-up and going head-to-head with Call of Duty, both of which negatively impacted the performance of this title this holiday."

"The movement will have an added benefit in staggering the completions of our racing title and the next Bond, both in development at Bizarre Creations," he added. "The racing genre grew an incredible 34 per cent and is the fifth largest genre."

"While we haven't disclosed any details yet for competitive reasons, Bizarre Creations has a proven track record of developing hit racing games for the past 10 years and was the principal reason we acquired them."

But it's the blockbuster franchises that are again expected to pull in more profits and consumers to the Activision business in 2009.

With 12 million copies of Call of Duty: Modern Warfare sold, it's no surprise that a sequel is due in Q4. But perhaps a bigger achievement than unit sales, the title has managed to maintain a high RRP well over a year since release.

"We continue to hold launch pricing of Call of Duty: Modern Warfare more than a year after launch," stated Griffiths.

"We expect that we will continue to hold premium pricing for our AAA titles, as we were able to do this holiday season with our core franchises and we continue to examine opportunities for further pricing."

And while EA might be directly competing with Activision in the music genre, Griffiths was keen to point out the success of the Guitar Hero franchise over its rival Rock Band.

"Guitar Hero created the music genre and for the record, Guitar Hero was the largest videogame franchise worldwide in 2008," he stated.

"Guitar Hero is the clear leader with an installed base of more than 32 million worldwide, almost four times that of our nearest competitor, who we continued to outsell strongly through the most recent holiday quarter."

So far, over 37 million songs have been downloaded for the Guitar Hero series.

Griffiths added that the European market is under-served in the music genre, something the publisher hopes to rectify this year.

"In Europe, we continue to be underdeveloped, and this year we expect to include more songs from European bands in order to leverage the growing installed base of consoles."

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