For the last few months, the struggles Activision is facing have been mostly overlooked. The catastrophe that was the Call of Duty: Infinite Warfare announcement has definitely shed some light on the situation, and there’s potentially a morbid future ahead for the publishing giant. Chances are they dodge the bullet, but there’s a few too many similarities to THQ that show the rocky ground Activision stand on.
(For those of you unable to watch the video, you can enjoy it in written form below)
Four years ago, a bombshell hit. In December 2012, it was announced that THQ would be closing its doors forever, and its assets were to be sold individually to pay off the debt they’d attained. Most people saw this coming a long way away, with increasing losses being reported from the company. What makes it surprising is when you consider the monolith of a company that THQ was but a few years before. The changing gaming scene, a failure to revive key franchises, and the crippling impact of one piece of hardware spelt the end for the publishing giant. This is why I’m concerned about Activision.
Two major events occurred within days of each other. Firstly, the disgust from core fans of the Call of Duty franchise, at the new instalment, Infinite Warfare. Fans clamoured for a World War Two shooter, and Activision responded with a World War Three shooter. This marks the identity crisis that Activision’s largest franchise faces. The publisher struck gold with their “boots on the ground” shooter gameplay, and they pumped out yearly sequel after yearly sequel. Activison, being Activision, have hit franchise fatigue in recent years, as sales have declined after the success of Modern Warfare 3 in 2011. As a result, they changed up gameplay massively with jump jets, which encourages aerial movement and dodging. Needless to say, fans weren’t impressed, and the hate for Infinite Warfare is a clear sign of this. So, a publisher’s main money-maker faces a crisis, that is having a large impact on sales. Does any of this sound familiar?
Yeah, THQ faced the same issue with Saint’s Row 3. Whilst Saint’s Row never reached series fatigue, as titles were spaced years apart, the third instalment showed that Volition wanted to take the IP in a new direction. Instead of Activision’s shift from modern military shooting to a futuristic setting, Saint’s Row left its serious, Grand Theft Auto-esque atmosphere for immature humour and obscenity. Sales were great, but long-time fans of the series were disappointed by this shift in focus. The developers, Volition, didn’t know what to do with the series, thanks to this polarising change. They planned to make a cyber-themed DLC for Saint’s Row 3, but it soon transformed into a fully fledged sequel. It’s difficult to say if this delay had a decisive impact on THQ’s future, but we know one thing for certain: the publisher never lived to see the release of its superhero-themed open world game.
Realistically speaking, Infinite Warfare won’t spell the death of the CoD franchise. The immense mainstream appeal it maintains will continue to push sales, but my concern lies with how the core fans see the series. Just as the dedicated fans of the Saint’s Row franchise lost interest, so too is Call Of Duty soon going to face similar issues. The announcement of Modern Warfare Remastered demonstrates this quite well. Despite their addiction to map-packs, Activision have never made any particularly egregious, desperate attempts for a little extra cash. Times have evidently changed for the publishing powerhouse, and so we see this FPS remaster exclusive to a bonus-edition pre-order of Infinite Warfare. For the first time, we see Activision gate an entire game - the one that people really want - behind the newest title, just to squeeze a little more money out of their fans before they most likely release it as a standalone game. This shameless attempt at increased profits is concerning, as it reveals an Activision uncertain of the future of their central franchise, the main money-maker for the company.
But wait, you say, what about their other series? Yes, most publishers have other franchises to keep them afloat if their main one falters, and Activision is no exception. The Skylanders franchise has great appeal amongst younger players, and the toys-to-life industry is only growi-
Oh. Well, that’s a problem. There’s two ways to look at this. The first is that less competition means Activision will see greater profits from Skylanders. The other is the beginning of the decline for toys-to-life giants in an industry now more competitive than ever before. Sadly, the latter is the more likely of the two, which we can see from the recent layoffs associated with the underperforming Skylanders SuperChargers and Guitar Hero Live.
Guitar Hero Live is another good example of Activision’s similarity to THQ. The long-awaited sequel to Red Faction: Guerrilla, entitled Red Faction: Armageddon, released to a whole lot of... nothing. People were disappointed with the new linear title, that forgot everything that made Guerrilla so good. The immense cost of production and the underwhelming sales make Red Faction another reason often cited for THQ’s ultimate demise. Activision’s Guitar Hero Live was intended to breathe some life into the Hero franchise, stagnated by, once again, series fatigue. A (very frequent) 12 releases across consoles and handhelds in three years left fans bored of what the series had to offer, and Activision had hoped to impress with a new guitar and digital distribution method, years after the last Hero title. The poor build-quality of the guitar, and the underwhelming number of on-disc tracks as a result of the new Guitar Hero TV service left fans disappointed. So marked the anticlimactic launch of what Activision planned to be, as they call it, a new “platform” for distributing music to fans. We’ve also seen a similar failure to reinvigorate key franchises with the appalling launch of Tony Hawk’s Pro Skater 5, a rushed, barren game made solely to profit from the nostalgia fans have for the series. Returning to the Guitar Hero Live comparison, the issue Activision now have in justifying the purchase of plastic peripherals is oddly reminiscent of the UDraw. Anyone remember the UDraw? Exactly.
It was a tablet released for the Wii, and the Xbox 360 and PS3 a year later, which... allowed you to draw... and play games. Mind-blowing, I know. Well, all you have to do is look at the current price of the UDraw to get an idea of how it sold... £7. Seven pounds for a tablet probably wasn’t what THQ had in mind. Apparently it sold around 1 million units, but left THQ with 1.4 MILLION units unsold, resulting in revenues $100 million less than expected. My favourite quote on the matter is from THQ’s CFO,
“From a contribution margin perspective, we would have doubled the profitability in the quarter were it not for uDraw. So it was something in excess of $30 million in operating loss in the quarter as a result of uDraw.”
That’s just tragic. Whilst Activision have the pedigree of the Hero brand to sell their guitar, I can’t help but think that the new stigma around plastic peripherals, encouraged by the Kinect and UDraw, had an impact on Live’s sales.
Perhaps the most obvious comparison is with licensed games. In the days of the PS2, and later with the Wii and DS, both THQ and Activision made ridiculous amounts of money from games based on popular TV and film franchises. Countless superhero games and watered-down releases aiming to make an easy profit from kids could only survive when games production was cheap. The advent of immense game development costs marked the end of this era, and a devastating blow for companies who couldn’t adapt, such as THQ. Activision, however, is different.
THQ couldn’t survive because they had nothing to fall back on. They had to sell the studios they bought but a few years before. Activision, on the other hand, has a backup: mobile games. You probably just groaned there, and I don’t blame you. It’s worth remembering though, that the low-cost, high-profit licensed games of consoles and handhelds have moved to your phone. At the time of THQ’s closure, mobile games were still a small deal, not enough to keep a whole company afloat. Activision now develop both paid and free-to-play games (with microtransactions), that have amassed millions of downloads and a steady source of money. Not only that, but the recent purchase of King for nearly $6 billion shows just how important mobile gaming is to Activision’s survival. For reference, Disney bought LucasFilm, and with it, the Star Wars brand, to the tune of 4 billion dollars. Activision merging with Blizzard years ago, and more recently obtaining Major League Gaming and King all point towards a company that wishes to spread out beyond Call of Duty and Skylanders. This would suggest that Activision’s here to stay, but they should take cautious steps. After all, remember how many studios THQ had only a few years before its closure. One or two mistakes led to the collapse of a gaming giant.
Why does this all matter, you may ask? If you’re not interested in Call of Duty or Skylanders, you may wonder why the closure of Activision has any impact on you. Well, it may not, but there’s a good chance it will indirectly affect the games you play. Imagine the industry without the powerhouse that is Activision. An industry already inundated with microtransactions, pre-orders bonuses, and on-disc DLC would probably be scared into further yanking the coins out of our pockets. To be fair, this can also be associated with the increasing price of game development, but there’s no doubt that fewer publishers means less competition. Less competition would result in less interesting games, and more money-grabbing techniques, because they can get away with it. As for Activision, it looks like they can hold on if their main console franchises go under, but it will be an Activision that’s mostly moved away from the console and PC gaming industry.
Do you think Activision is facing trouble, or will the Call Of Duty and Skylanders franchises continue to thrive? If Activision were to go bankrupt, do you think it would affect the wider industry in any way? Share your thoughts in the comments.
More of my increasingly cynical overthinking can be found on the OSR Youtube channel, where I critique games from different perspectives, and pretend to be qualified to do such a thing.