Guess Which Three Games Help Keep Activision Afloat

Activision is a giant company with a small problem: Most of their revenue comes from three video games.

Buried in Activision's annual report for Fiscal Year 2009, the same one that had news of a major shake-up at Call of Duty: Modern Warfare developer Infinity Ward, were some interesting numbers.

"A significant portion of our revenues has historically been derived from products based on a relatively small number of popular franchises and these products are responsible for a disproportionately high percentage of our profits," the report points out.

For example, it points out that in fiscal 2009, which ended in December, that their top three franchises, Call of Duty, Guitar Hero and World of Warcraft, accounted for about 68 per cent of their net revenues for the year.

Further into the report, the company points out that World of Warcraft accounts for a staggering 98 per cent of Blizzard's revenue. Ninety-eight percent! That's up from the previous two years when the hugely popular massively multiplayer online game accounted for a mere 97 per cent.

What does all of that mean to Activision?

"Due to this dependence on a limited number of franchises, the failure to achieve anticipated results by one or more products based on these franchises may significantly harm our business and financial results," according to the report.

Or, in Brian terms, one bad Call of Duty, one under-performing Guitar Hero, or, don't even think it, a sudden disinterest in World of Warcraft leveling and Activision will be in a world of hurt.

No wonder things are so tense over at Infinity Ward right now.


Comments

    What do Activision expect when they milk the three franchises to death and do not take risks releasing innovative games.

      they expect gamers to keep buying the same crap year after year, just like they do. We as a group seem to meet those expectations nicely and give them no reason to change.

    I know I'm no business analyst but I have a prediction. Call of Duty will be the next big shock and go down the same lines as music games did in 2009. Milking a franchise to death is not going earn more $$$$ in the long run.

    This business with Infinity Ward will also have an impact. If the name stays the same but the creative talent behind the developer is different, I think most hard core gamers will take note before deciding on whether or not to make a purchase. (They're the ones that read blogs like Kotaku and check out gaming news websites). My 2 cents.

      Are these the same hardcore gamers who voted with their wallets over the dedicated server issue?

      The vast majority of Call of Duty buyers don't know and, frankly, don't care whether it's made by Infinity Ward, Treyarch, Sledgehammer or Dr Derek Smart. They'll buy it regardless.

        Hahaha, yeah fair call on the wallets comment I'll admit that. But I still think flooding the market with a CoD title every year could do more harm than good in the long run for the franchise.

        Told you I'm no business analyst.

      You just got D-bagged...

        hahahaha
        Nice

    I rightly assume that Starcraft 2 will become their fourth cash cow next financial year then...
    Or is that the next-next financial year depending on release dates...Oh how I wait in anguish to play its goodness.

    Oh SNAP! David, you're funny with your humour, sorry 'Marathon' - he's right, people buy the game/name and not the people behind the name/game...

    Diablo 3 is in the pipeline for the sometime in the next 20 years...

    Doesn't the game industry (at least for the big players) work pretty much like the film & music industry? The handful of monster hits pay for the games which either fail outright or sell to a niche audience.

    In any case, with Starcraft II coming this year and Diablo III next year, I don't expect to see Activision crying poor anytime soon.

    That's not that huge.

    23 and a bit % each isn't really huge.

    How much of EA is propped up by The Sims products?

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