Flush with the success of the launch, Kotick this week offloaded almost two million Activision stock options he’d held since 2000. When they were worth $US1.03 each. In this post-Modern Warfare 2 world, however, they’re worth around $US11.50.

Want me to do the math for you? Subtract the $US2 million strike price from the equation and Kotick earned himself just over $US20 million. In less than a week.

Think he’s an asshole? He can’t hear you. His mansions are insulated with money.

Activision CEO reaps $US20.2 million in three-day stock sale [GameSpot]

After chatting about the company’s recent earnings, guest host Charles Payne and Activision chief Kotick talked unemployment:

Robert Kotick, CEO, Activision Blizzard: [Most] of our market is in their 20s or 30s.

Fox News host Charles Payne: That is a pretty hard hit spot right now. This is one of these unusual times when a lot of men, particularly men in that range have lost their jobs. Any chance that might impact your business?

Kotick: Well, look, I think that it’s one of the profound challenges we face in our economy today and our country today. I think it is likely to affect every business. One of the nice things about video games is that it does give you the opportunity to escape from some of the difficulties in the day-to-day — in your day-to-day lives as you start to think about those challenges.

Whether it’s “DJ Hero” or “Guitar Hero” or “Band Hero” or “Call of Duty: Modern Warfare 2,” these are all products that give you hundreds and hundreds of hours of entertainment for good value.

Payne: Bobby, I put a few hundred dollars in your pocket too along the way. Congratulations and thanks a lot for coming on the show.

Out of work? Do you still play or buy games?

The Call of Duty Endowment (CODE) unveiling comes on Veterans Day and the official launch day for Call of Duty: Modern Warfare 2.

The morning press conference will take place at the Newseum in Washington D.C. and will be hosted by Activision Blizzard CEO Bobby Kotick.

The CODE advisory council members include MG Matthew P. Caulfield (USMC-Ret.), COL Roger Dimsdale (USA-Ret.), RADM Ronne Froman (USN-Ret.), CPT Gordon H. Mansfield (USA-Ret.), BG James A. “Spider” Marks (USA-Ret.), GEN Montgomery C. Meigs (USA-Ret.), SFC Steve Robinson (USA-Ret.), BG Harry A. Sieben, Jr. (USANG-Ret.), MG Craig Whelden (USA-Ret.) and MCPO Maurice Wilson (USN-Ret.)

Kotick told the Washington Post that “The joblessness rate that [veterans] should be far less than the national average, not more. How do you expect people to actually join the military if when they leave the military they can’t integrate back into the free market they’re supposed to be protecting?”

Eighteen percent of veterans who left the military in the past one to three years were unemployed, according to a 2008 Department of Veterans Affairs employment survey, the Post reports.

The endowment will support other groups that assist veterans with their careers. A noble effort with suspicious timing.

Activision Blizzard had kind words for the Guitar Hero and Call of Duty franchises, which apparently many of you bought over the last three months, helping Acti-Blizz zoom past its projected $US700 million quarter. CEO Robert “Bobby” Kotick pointed to “positive audience response to Activision Publishing’s Guitar Hero 5, Marvel: Ultimate Alliance 2, and the Guitar Hero and Call of Duty franchises, as well as Blizzard Entertainment’s World of Warcraft.”

The company also claimed that in September sales of music games in the US increased 72 per cent year on year, which “demonstrates the sustained interest in this new and important game category”. So, nothing to worry about!

Kotick seemed similarly pleased with the company’s expected ability to “deliver record non-GAAP operating margins based on the strength of the Call of Duty franchise and high consumer anticipation for Modern Warfare 2, which we project could be the largest entertainment launch of the year.”

No one can deliver non-GAAP operating margins like these guys. No one.

Though always an industry mainstay, Activision didn’t start to take its place front-and-center in the core audience’s shooting gallery until years recent. It was theGuitar Hero and Call of Duty, franchises that became Activision’s golden calves; early incarnations of those titles broke ground and dazzled audiences.

Then came the sequels, the sequels, and yet more sequels. As the publisher’s stock soared (ticker: ATVI) its triumphant executive became a vocal and often controversial mainstay in the business press – and by extension, the gaming consumer press.

“Hating EA is so last year,” CEO John Riccitiello told Kotaku at E3 in 2008, talking to us about what Electronic Arts had learned from its old ways of doing business – ways that look an awful lot like how Activision appears to conduct itself these days. All across the internet, it’s clear: Gamers have crowned a new Evil Empire.

Who Is Bobby Kotick?

I, as a games biz reporter, have been given interview time with most major publishing execs more than once — most of them believe it’s important to reach out to us from time to time as a way of reaching their consumers. I’ve never even been in the same room with Mr. Kotick. And while Activision is often responsive to media inquiries regarding its games, calls for comment on business articles or questions about the company itself—such as my request for info for this article—usually go unanswered.

But as an industry analyst, it’s the job of Wedbush Morgan analyst Michael Pachter to check in regularly with top execs and get the info shareholders need to make investment decisions, so he’s fairly familiar with the bombastic executive. “Bobby is friendly to a fault, funny, very smart, and quite engaging,” says Pachter. “He is a bit flip, in an entertaining way, and I think it translates in print as cocky. I like him a lot, and think that his public persona has been twisted by the gaming media, making him into a ruthless factory head.”

Kotick’s “public persona” continues to raise eyebrows all on its own. Asked recently by an analyst on a quarterly conference call about the rising cost of packaged game software — bolstered, in no small part, by Activision’s higher price points on peripheral-equipped games, Kotick said that “if it was left to me, I would raise [software] prices even further,” and chuckled along with his execs.

Just a joke it may have been, but hardly a tasteful one in a recession, where cash-strapped consumers were likely to catch wind of his cavalier attitude. It’s just one example why a wash of anti-ATVI sentiment pervades the comments sections and forums that impassioned gamers call home. Contrast that to Nintendo’s stated promise to “keep people smiling”, EA boss Riccitiello’s common refrain that quality must precede profitability as a goal, and Take-Two chairman Strauss Zelnick’s regular praise for his development talent on every quarterly investor call.

But Kotick’s most recent round of cold talk was the most eyebrow-raising: he recently said his goal’s always been to “take all the fun out making video games”. As for the working environment at Activision? “I think we’ve definitely been able to instill in the culture the scepticism and pessimism and fear that you should have in an economy like we’re in today.”

The widely-publicised quote, delivered at an investor conference, was easy flamebait. Gamers’ passionate nature and yen for controversy is part of what defines them as a community — and hating can be fun, as exemplified by this resulting parody song from IdleThumbs’ Chris Remo, who says it’s “based on the teachings of Kotick”.

But what do Kotick’s employees think, living in an environment of “pessimism, scepticism and fear”?

Nose To The Grindstone

“Kotick basically says that he was partially quoted out of context, and partially the humour of the situation at the time isn’t conveyed in the quotations,” says a level-headed employee of one of the publisher’s internal studios, speaking under condition of anonymity. Infinity Ward’s Robert Bowling also seemed to take it as a joke, if you recall his subtle riff on the snafu during a recent Modern Warfare 2 event.

Numerous Activision insiders who didn’t want to be quoted said that Activision, as a corporate entity, treats them well — individual developers are more likely to encounter conflicts of studio bureaucracy on the development side rather than on the publisher-side, something of an unusual scheme of events in game development.

The high-pressure, goal-driven environment also means tensions across rival internal studios flare up more often, as we saw with the public spat between Infinity Ward’s Robert Bowling and Activision producer Noah Heller, representing Treyarch’s Call of Duty: World at War. Of course, the culture of achievement also means that prominent designers on projects like these drive very, very nice cars, we’re told.

Our source has never himself met Kotick, but says he’s heard little ill of him — he compares what he hears to “people who know Bush, where despite what you think about his policies, they all seem to think he’s a cool guy to sit around and have a beer with.”

The Bad Behavior

Industry sources say, though, that other gaming companies don’t feel quite so positively toward Kotick — in particular, that such a cash-flush company is leaving it up to the others to shoulder the collective cost of piracy protection and first-amendment lobbying via their Entertainment Software Association dues. That is a point of contention.

Activision was the largest publisher to defect not only from last year’s E3, but from the ESA — the trade body that represents the interests of all game developers. And while this year, the publisher returned to E3, it still won’t rejoin the ESA: “We have our own issues that are not the industry’s issues,” Kotick has said.

But Activision is part of the industry — so as much smaller publishers manage their pricey ESA dues to support pro-industry lobbying and public awareness campaigns, Activision, one of the world’s wealthiest, is sitting out its share. And that decision is viewed in a poor light by other companies.

Also worrying is Kotick’s pattern of levying lawsuits against the defiant. Activision dropped gamer-darling Brütal Legend, from its publishing slate in the Vivendi merger because the eagerly-anticipated title, plus other Sierra games, “lacked the potential to be exploited every year on every platform,” as Kotick said at the time.

But when EA picked up the game, Activision sued — a move an EA spokesperson now-famously likened to “a husband abandoning his family and then suing after his wife meets a better looking guy.” (”Hey, if Activision liked it, then they should have put a ring on it,” chimed in creator Tim Schafer.)

Under Kotick’s stewardship, Activision seems to be developing a propensity for the sort of legal challenge that makes it look like a bully. There’s also the imbroglio over turntable games, when Activision bought embattled developer 7 Studios — who’d been working on Scratch: The Ultimate DJ for Genius Products. Genius now alleges Activision levied its legal muscle and some “unsavory business practices” to delay a possible rival to its own turntable-equipped DJ Hero. Activision mantains its involvement with 7 Studios provides the developer with much-needed financing, and that Scratch had fallen behind in production well before its acquisition.

A Culture Of Cash

Pragmatic gamers may not like Activision or Kotick’s ways, but will assert the man’s just doing his job and doing it well: The games industry is still a business, after all. He has, at least on the books, earned some compliments — and mad money to go with them. The 46 year-old Kotick has helmed Activision since 1991, and in 2007, the NPD group pegged the publisher as the industry’s biggest. Activision’s 2008 saw four consecutive quarters of revenue growth — and that same year, Forbes says Kotick earned $US15 million for his work. That’s twice what EA’s John Riccitiello made as head of Activision’s nearest rival.

And when he’s not running the game industry’s newest and biggest Death Star, evidence suggests he might not be such a bad guy. He participates in charitable organizations as a member of the Board of Trustees for The centre for Early Education, chairs the Los Angeles County Museum of Art and is a member of the Board of Directors of the Tony Hawk Foundation — making his game franchise figurehead happy, sure, but the Foundation also puts skate parks in disadvantaged communities.

Nonetheless, Bobby Kotick doesn’t seem to care what gamers think. Should he? Pachter points out that when “the old” EA was churning out content with less attention to quality, the resulting gamer backlash did, in his opinion, injure the company’s bottom line.

“The argument about consumer fatigue and lower product quality is sound,” Pachter concedes. “There is only so much innovation that can occur, and annual games are less likely to be innovative than bi-annual or tri-annual games.” It’s possible that Activision’s business strategy and public persona may one day come home to roost, as it did for EA.

Until then, what can gamers do? Not buy Modern Warfare 2, the holiday season’s most-desired title?

…Yeah, right.

[Leigh Alexander is news director for Gamasutra, author of the Sexy Videogameland blog, and freelances reviews and criticism to a variety of outlets. Her monthly column at Kotaku deals with cultural issues surrounding games and gamers. She can be reached at leighalexander1 AT gmail DOT com.]

During his hour-long—and highly quotable—presentation on Monday to the Deutsche Bank Securities Technology Conference in California, Kotick was asked by attendee whether he considered the gaming industry to be a hit-driven business.

“It is hit-driven business, but it’s not as volatile as you would think,” he said. “If you look at the top 10 products this year, eight of the top 10 products are based on franchises that were out last year and the year before that and the year before that.

“There’s always been a confusion about the value of new intellectual property and also the difficulty of introducing new intellectual property. You still have the great challenge every year of innovating in your franchise, but one of the great benefits of having franchises is that you have a road map for innovation. When you are developing a new intellectual property from the ground up, you have to invent the story, the characters, the gameplay dynamics, and you’re doing it without the benefit of audience knowledge.

“If you’re really disciplined, as we are, about spending time surveying your audiences, you can take a lot of that knowledge — and the audience can give you a lot of guidance about what they want in their innovative new products. The pathway to innovation on a franchise is easier and better defined than it would be in something new.

“The companies that have proven franchises and have the discipline to leverage them are always going to do better and have a greater level of success. The single hardest thing to do in the video game business is to introduce new, original intellectual property and that’s why it doesn’t happen very often.”

Who among us can deny that some highly innovative games were also sequels? Most games must be born without a number at the end of them, but Kotick makes a strong argument that when they get that numerical appendage, they get…better.

You can listen to the full Kotick presentation at the conference’s official site. The quoted excerpt above begins close to the 42:00 mark.

Speaking at the Deutsche Bank Securities Technology Conference in San Francisco yesterday, Kotick said, “The goal that I had in bringing a lot of the packaged goods folks into Activision about 10 years ago was to take all the fun out of making video games.”

Think he knows people outside the room will be reading this kind of stuff? Course he does. He just doesn’t care.

Activision games to bypass consoles [GameSpot]

Speaking at the Deutsche Bank Securities Technology Conference in San Francisco earlier today, Activision boss Bobby Kotick has told attendees to “expect many of our products to be playable independent of a console”, with the company particularly impressed with the potential of streaming services such as OnLive.

That and cereal box Guitar Hero.

Activision games to bypass consoles [GameSpot]

The Activision Blizzard CEO’s comments, as reported by GameSpot, will probably dash any hopes of a StarCraft or Diablo brand MMO. And that comment backs up what Blizzard COO Paul Sams recently said, that the unannounced online game will be “significantly different” from the World of Warcraft experience.

Blizzard’s next MMOG to have ‘more broad appeal’ [Gamespot]

That may be because his company is sitting on some of gaming’s biggest franchises—Call of Duty, World of Warcraft, Guitar Hero—or that Kotick’s just a little power hungry. But he tells Barrons, “I view the medium as having the potential to eclipse film and television.” And quickly. In five years or so.

Bob may have a point. Much has been made of the decline of television viewership in favour of other distractions, including the internet and video games, both of which can take away valuable screen time from Hollywood’s cinematic and televised offerings. Plus, the TV doesn’t even have a snazzy plastic peripheral one can play with.

Well, with the exception of the TV remote.

Game-Changing Hero Is Poised to Rule [Barrons]