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Activision: Social and Casual Games Don't Make Money

| 1 Dec 2010 15:54
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Activision CEO Bobby Kotick is not investing heavily in social games or casual markets like Apple's App Store.

Remember the halcyon days of early 2010 when social and casual games were the buzzwords on every videogame executive's lips? The 2010 Game Developers Conference had a separate conclave for social games and FarmVille developer Zynga seemed to be in every headline. While it seems that EA and other outfits like Disney Interactive Studios are still invested in social games, Activision's Bobby Kotick is pulling out. At a media summit in New York City yesterday, Kotick said that he didn't think social games offered a substantial profit for his company, as opposed to key franchises like Call of Duty.

"The place where you have the opportunities for growth is within the communities of franchises we control," Kotick said.

Also, the games that you might play on smartphones or tablets like the iPad are not huge growth markets for Activision. "We don't view the App Store as a really big opportunity for dedicated games," Kotick said.

Sure, a lot of people play these games, Kotick admitted, but he just doesn't see a way to monetize social games to adequately justify the investment. "It's a different question assessing it as a business opportunity. Right now we don't see an opportunity for us to participate in that market," he said.

There are a lot of reasons for Activision to stay out of social games, but none for them to try to break into the market. With CODBlops and WoW making money hats for Bobby Kotick and Activision Blizzard, it's clear that spending more money on developing its major franchises will net them the most profit in the end. The other option would be to buy a startup, or to shift gears into social and casual games for a much smaller profit margin. Why mess with what works?

Source: Reuters

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