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Activision CEO Bobby Kotick was nearly fired by Vivendi
Anyone who's paid attention to the roller-coaster that is Activision's relationship with its former owner Vivendi, here's a new wrinkle for you. Activision CEO and perennial villain in a million fans' hearts Bobby Kotick was nearly let go by Vivendi in 2013 over his refusing to sign off on any deal that excluded his own private investment group. According to the lawsuit filed in Delaware, this allowed Kotick, Brian Kelly (Activision's Chairman) and their investment partners (including Tencent Holdings Ltd.) to gain a 25% stake in the company at the same rate that Activision itself paid for the remainder. This is claimed to have allowed them to get away with not paying a premium for control over the company. The lawsuit alleges that this is an improper benefit to Kotick, Kelly and their group. What's really fascinating is that Kotick's stand on this issue, going so far as to threaten to resign in 2013, seems to have been seriously considered by parent company Vivendi. Former Vivendi CEO Jean-Francois Dubos and then-CFO Phillipe Capron were among those speculating on firing Kotick, with Capron going so far as to volunteer to do it the very next day after the email exchange in May of 2013. Considering he was one of the highest paid CEO's of any game company, I'm surprised they chose to back down -- perhaps his contract made firing him punishingly expensive. In the end, Vivendi blinked first and Kotick and his group got to make exactly the deal that they're getting sued over now.
Activision CEO Bobby Kotick was nearly fired in 2013
Vivendi, Activision's controlling shareholder in 2013, wanted to fire CEO Bobby Kotick, as revealed in emails that are part of a lawsuit filed by Activision investors (via Bloomberg). During negotiations for Activision to buy the majority of its own shares back from Vivendi in 2013, Kotick refused any deal that excluded his own investment group, a stance that made Vivendi executives consider losing him entirely, the filing says. One email from then-CEO of Vivendi, Jean-Francois Dubos, said, "I really wonder who's going to fire him." Philippe Capron, Vivendi CFO and Activision chairman, replied, "Myself, happily. Tomorrow if you want."
Kotick says Destiny is a '$500 million bet' [Update: Beta coming in July]
Is Destiny the most expensive game ever made? Time will tell, but Activision CEO Bobby Kotick intimated that total development and marketing costs for Bungie's sci-fantasy shooter epic may reach half a billion dollars. "If you're making a $500 million bet you can't take that chance with someone else's IP. The stakes for us are getting bigger," Kotick said. According to Gamasutra and Reuters, an Activision spokesperson said that Kotick's estimate includes marketing, packaging, infrastructure, support, royalties, and other costs. [Update: During the Activision Blizzard call today, Bungie noted that it anticipates Destiny's beta in July.]
Activision spending $500 million on Destiny
Activision Blizzard CEO Bobby Kotick is quoted recently as saying that the company is "making a $500 million bet" on Destiny, as reported by Reuters. The quote has caught fire for dwarfing the alleged $260 million Take-Two Interactive spent to "develop, produce and market" Grand Theft Auto 5. Here's where context and recognition of Destiny's infrastructure over a 10-year contract are important. Activision is currently keeping mum because of this afternoon's upcoming year-end financial report, but a company spokesperson told Reuters on Monday the half-billion number includes "marketing, packaging, infrastructure support, royalties and other costs." The thing to pick up there is the infrastructure support, which is probably a significant expense missing from the aforementioned Grand Theft Auto 5 cost used to keep GTA Online operational. Don't forget about customer service, DLC development, and so forth. The flaw here is to think of Destiny as a game that's pressed, shipped and forgotten. Activision Blizzard builds franchise gardens, betting big on a few company-owned pieces of intellectual property for enormous returns, as has been evidenced by Call of Duty, Skylanders, Diablo and, in the past, Guitar Hero. And if Destiny doesn't catch fire or its flame flickers, much like Guitar Hero's did, Activision has shown it has no patience for failure. The company will likely clarify the quote during or after this afternoon's investor call. [Image: Bungie]
Destiny beta is incoming for summer; Activision predicts big successes
Is Destiny really going to be the next big thing in gaming? Activision CEO Bobby Kotick certainly thinks so. In the recent fourth quarter earnings call for the company, Kotick went on the record saying that it will be the best-selling new IP in video game history, which is potentially true; any new IP has that potential, but Bungie's upcoming MMOFPS has slightly better odds than most. It's helped by launching on four platforms at once: Xbox 360, Xbox One, PlayStation 3, and PlayStation 4. All of that potential is based on how well the game actually plays, though, and potential players will get to find that out this summer. The current target for release is September 9th, although there's obviously plenty of time and space for that date to move forward or backward depending on beta testing. Keep your eyes peeled for more information as we move out of the winter and into spring; a lot can happen over the next few months.
Destiny to be 'best-selling new IP in history' according to Activision [update]
Activision is dreaming big for Bungie's Destiny, dubbing it the "next billion dollar franchise." Activision CEO Bobby Kotick echoed the projection, telling investors during today's earnings call that the publisher expects "Destiny will become the best-selling new video game IP in history." Destiny, an online, loot-heavy first-person shooter, is due on September 9. No pressure. Activision also reported $4.58 billion in revenue for the 2013 calendar year. The earnings represent a 5.76 percent decrease compared to that of 2012, in which the publisher earned $4.86 billion. It also reported fourth quarter earnings of $1.52 billion, a nearly 120 percent leap from its $691 million in revenue during the third quarter and well above its $1.26 billion projection. Finally, World of Warcraft had 7.8 million subscribers as of December 31, 2013, an increase from the 7.6 million reported during the last quarter. Update: As it turns out, Kotick's direct quote from the earnings statement is that Activision expects "Destiny will become the best-selling new video game IP in history," which is substantially different than being the best-selling game overall. We've updated the quote and headline accordingly. We apologize for the error. [Image: Activision]
World of Warcraft sheds another 100,000 subscriptions
Everyone is pretty certain that the next World of Warcraft expansion is going to be announced very soon. Tomorrow, probably. So it serves as an interesting counterpoint to note that the game has lost 100,000 subscribers over the past three months, dropping the game's total to 7.6 million subscribers and serving as a rather inelegant coda to the game's most recent expansion, Mists of Pandaria. Activision Blizzard CEO Bobby Kotick stated the numbers during a post-earnings call while noting that "new and exciting content" is on the way for the game. While 7.6 million subscribers is still more than enough to make hats out of money, it's a far cry from the game's subscription height. It remains to be seen whether or not the next expansion will help launch the game back upward or not -- and whether the game is currently undergoing a slump or is simply beginning to decline.
Activision Blizzard now free from Vivendi
Back in July, Activision Blizzard CEO Bobby Kotick led a charge to buy the company back from parent company Vivendi. After a few bumps in the road, the share buyback is complete and Activision Blizzard is now (mostly) free of Vivendi. $5.83 billion of stock is owned by Activision Blizzard, while Kotick and his partners hold on to $2.34 billion. Vivendi's not completely out of the loop yet, but its shares have been cut down to 12%. After five years under Vivendi's wing, Kotick says he is excited to "get back to focusing on making great games," according to a recent interview with Bloomberg.
Activision completes purchase of itself from Vivendi
Activision's buyback of $8.2 billion of its own shares from Vivendi has been completed, the publisher announced today. It was just yesterday that the Delaware Supreme Court overturned a September ruling that halted the purchase, which followed a lawsuit by an Activision Blizzard shareholder in August. The shareholder alleged a "breach of fiduciary duties, waste of corporate assets and unjust enrichment" on Activision's behalf. The publisher's purchase from Vivendi amounts to 429 million of its own shares for $5.83 billion. Additionally, Activision CEO Bobby Kotick and Co-Chairman Brian Kelly purchased 172 million shares for $2.34 billion in a separate transaction. Activision is now officially an independent company, majority owned by its shareholders. "The shares Activision Blizzard purchased in the transaction will no longer be treated as outstanding, leaving the majority of the remaining 690 million shares in the hands of public shareholders," Activision noted in today's announcement. Activision said yesterday that it expected the purchase to be completed on October 15. The transaction came about four days ahead of schedule, as someone must have sprinted to the bank this morning.
Activision to buy $8.2 billion of its own shares from Vivendi on Oct. 15
Activision is free to buy back its own shares from current parent company Vivendi, now that the Delaware Supreme Court has overturned a ruling that prevented the deal from going down. The transaction is expected to be completed on October 15. Activision will buy 429 million of its own shares from Vivendi for $5.83 billion in cash, while Activision CEO Bobby Kotick and Co-Chairman Brian Kelly will separately purchase 172 million shares from Vivendi for $2.34 billion in cash. After the deal, Activision will have no one to answer to but itself – and all of its remaining shareholders. A lower Delaware court halted the transaction earlier this year after an investor sued, alleging the Activision board breached its duties by not putting the deal to a shareholder vote. Activision announced on September 24 its plans to appeal that ruling.
Court sides with Acti-Blizz, Vivendi split moves forward
The Delaware Supreme Court has sided with Activision-Blizzard in a lawsuit that was seeking to stop the planned split from corporate parent Vivendi. The suit was filed by shareholders who believe that Acti-Blizz's bid to become an independent entity would "disproportionately benefit" CEO Bobby Kotick and "an elite group of investors," according to Gamasutra. With the legal obstacles now removed, Activision-Blizzard expects to complete the deal by October 15th.
Activision to appeal halted Vivendi deal on October 10
Activision Blizzard is set to appeal the Delaware Supreme Court's decision to halt its $8.2 billion share purchase from controlling corporation Vivendi, Reuters reports. Activision aims to buy itself back from Vivendi through share purchases spearheaded by the company itself and an investor group led by Activision CEO Bobby Kotick. The combined share purchase would reduce Vivendi's current 61 percent stake in Activision to 12 percent, reestablishing Activision as an independent company. Purchase plans were halted last week by the Delaware Supreme Court, citing recent lawsuits over Activision's failure to put the purchase to shareholder vote. Activision will begin its appeal to overturn the decision on October 10.
Project Titan: A brief history of a game that doesn't exist
For the last several years, the MMO community has been abuzz with rumors regarding Blizzard Entertainment's Project Titan. Long reported to be a brand-new MMO based on an entirely original intellectual property, Titan was a top-secret project discussed only through occasional interviews, job postings, and hearsay. No footage ever slipped through the cracks; no early alpha build accidentally leaked to the web. Unfortunately, Project Titan as we knew it is no more. Rumors broke in May that development on the project had been restarted from scratch, and Blizzard offered comments that didn't so much as confirm those rumors as lend them a hefty amount of credence. Now it seems as though whatever we might have known about Titan may no longer apply, and whatever Blizzard had created so far may never see the light of day. With that in mind, let's take a little adventure through the rumorsphere and look back on the history of Project Titan and the stories surrounding it.
Kotick: Tencent a 'passive investor' in Activision Blizzard buyback
Activision Blizzard CEO Bobby Kotick stated in an early-morning conference call that Tencent's participation in the buyback from Vivendi is merely a sign of the company's "enthusiasm." Within last night's announcement of Activsion Blizzard's $8 billion buyback from Vivendi, it was noted that a group of investors led by CEO Bobby Kotick will own a 24.9 percent stake in the newly independent company. Tencent, a Chinese company with extreme amounts of cash and fingers in many, many video game pies, was listed in the group. "As far as Tencent, you know, I think their investment just confirms the enthusiasm we have in our partnership for Call of Duty in China. They do not have a board seat. They are a passive investor and I think it was largely as a result for the enthusiasm we're doing together," said Kotick on this morning's call. Kotick also mentioned later that this group he leads and Tencent is a part of (ASAC II LP) doesn't have any rights to nominate board members. Tencent currently owns League of Legends developer Riot Games and nearly half of Epic Games (and its ubiquitous Unreal Engine). As for those pies we mentioned, they come in Electronic Arts FIFA and Take-Two NBA flavors.
Sad pandas: More sub losses expected in WoW
If you thought World of Warcraft losing 14% of its users -- over one million -- during the first quarter of the year was bad, just wait; according to Activision-Blizzard, subscription numbers are expected to dip even further. Of course, even with the loss, WoW is still the most popular sub-based game in the world, but shares in the studio still dropped after the announcement was made to investors, down by nearly 5% on Wednesday . The loss of players is coming primarily from the East, and Activision-Blizzard points to the rise of free-to-play games as the culprit. Chief Executive Bobby Kotick stated to investors, "It's important to note that the nature of online games has changed, and with the environment becoming far more competitive." So what's to be done? "To address this," he continued, "we're working to release new content more frequently to keep our players engaged longer and make it easier for lapsed players to come back into the game."
The Daily Grind: Should World of Warcraft go free-to-play?
There's only one Western subscription MMO that can stand to lose 1.3 million subs in three months and shrug it off: World of Warcraft. But shrug it off doesn't appear to what Activision-Blizzard is doing. During the investor call that revealed the heavy sub losses, Activision CEO Bobby Kotick acknowledged the changing market and his plans to adapt with speedier content. "It's important to note that the nature of online games has changed," he said, "and [that] the environment [is] becoming far more competitive, especially with free-to-play games." And Blizzard president Mike Morhaime suggested the company is "studying" the comings and goings of players and how to entice former players to return. Well, we don't have to look much further than Star Wars: The Old Republic's recent rejuvenation to figure out that free-to-play is one of the better ways to entice gamers to return (and open their wallets). Surely, Blizzard has to be wondering whether F2P might be a huge boost to the game as it's approaching its ninth birthday later this year. What do you think -- will World of Warcraft eventually go free-to-play, and more importantly, should it? Every morning, the Massively bloggers probe the minds of their readers with deep, thought-provoking questions about that most serious of topics: massively online gaming. We crave your opinions, so grab your caffeinated beverage of choice and chime in on today's Daily Grind!
Bobby Kotick is one of the highest-paid CEOs in the U.S.
Activision Blizzard head honcho Bobby Kotick was one of the highest-paid CEOs in America last year, Bloomberg reports. Earning $64.9 million -- $55.9 million in of it in stock which he'll vest over the next 5 years, so he isn't just pocketing all of it in cash -- puts Kotick behind Oracle's Larry Ellison, America's top-paid CEO, who earned $96.2 million in 2012. Looking to other game industry execs, Kotick's nearest comparison would be EA's former CEO John Riccitiello, who resigned in March, but made $9.5 million in 2012. So why the pay raise, an eight-fold increase over Kotick's $8.33 million salary in 2011? It's part of Kotick's new employment contract, which included big bonuses tied to corporate performance. If Activision Blizzard continues to do well, Kotick will keep earning big dollars -- if he hits the highest performance targets, he could be making even more this year. [Update: Clarified Kotick's stock vesting]
Activision's Kotick is now among the highest-paid CEOs in the US [Update]
Activision CEO Bobby Kotick is now among the highest-paid CEOs in the United States, Bloomberg reported. According to a document filed to the SEC, Activision increased Kotick's compensation to $64.9 million in 2012. The majority of Kotick's earnings came from stock awards valued at $55.9 million. By comparison, Kotick earned $8.3 million in 2011, and Blizzard Entertainment President and CEO Michael Morhaime earned just over $9 million in 2012.As Bloomberg noted, Kotick's $64.9 million earnings stretch out over five years, plus he could still garner $16 million more should he meet the "highest performance targets." Kotick saw his base salary increase to $2.1 million in January this year.Update: To clarify, since the awards vest over a five-year period, Kotick received $8.33 million in compensation for 2012, not all $64.9 million.
Kotick on why firing West, Zampella was easy, turning down a CoD film
Activision CEO Bobby Kotick settled a lawsuit with former employees Jason West and Vince Zampella, both now of Respawn Entertainment, in May. Kotick fired West and Zampella in 2010, after learning they were going to bail on their contracts to sign under EA, Kotick said, and from there, his job was easy:"You find out two executives are planning to break their contracts, keep the money you gave them and steal 40 employees. What do you do? You fire them," Kotick told The New York Times in an extensive profile. West and Zampella sued Activision for royalties they said they never received from Modern Warfare 2, and though the terms of the settlement were never disclosed, the case's conclusion had West smiling.Kotick's NYT profile extended from his high school years, when he would pick up friends in a chauffeured limo to visit Studio 54, to his time in college and to the present, when he fended off offers from Hollywood to turn Call of Duty into a high-budget film. Kotick said movies based on games rarely do well with fans and could blemish the Call of Duty brand.He might be on to something there.
Diablo 3 surpasses 10 million sold [Update: Expansion incoming, date unknown]
During today's Activision earnings call, CEO Bobby Kotick revealed that Blizzard's Diablo 3 has managed to sell over 10 million copies so far. "Year-to-date, Diablo 3 is the top-selling game overall based on enough meta, digital and retail sales in North America and Europe. Diablo 3 has sold already in excess of 10 million copies," Kotick said.Diablo 3 launched back in May, with 3.5 million snatching the game up within the first 24 hours. In North America, NPD stated that Diablo 3 sold one million retail copies across May. The current version of the game, 1.0.5, has been available since October 25.Update: An expansion for the game is also in the works, Blizzard Entertainment president Mike Morhaime announced during the call: "We do have an expansion planned for Diablo [3], I don't have any timeline to talk about. I think the most important thing for us always comes down to the quality of the expansion and the gameplay, so that will be a big factor in terms of driving our schedule."
