The best part about earning calls is that they offer insight into what’s going on in the gaming world even if a publisher or dev team claims otherwise. Well, Activision-Blizzard explained during its earning call why it split from Bungie and let the Destiny IP go.
According to website gamespot.com, Activision-Blizzard president and Chief Operating Officer Coddy Johnson offered information on why the company split from Bungie and the Destiny IP. The publication site highlighted the following information:
“We did not own the underlying Destiny IP, and we do for all of our other major franchises, which we think is not just a differentiator for us in the industry. But also controlling the underlying IP gives us the chance to move in with new experiences and new engagement models which also come with new revenue streams and, structurally, higher economics when you own the IP.”
In addition to the split, we learn that Destiny and all of its downloadable content did well, but did not meet/exceed “commercial projections,” which if it did it would drive even more monetary units in Activision-Blizzard’s favor. Johnson relayed this information to the website as noted below:
“Also during the call, Johnson said Activision Blizzard wanted to break up with Bungie because the Destiny franchise was failing to meet its commercial projections. “Destiny is highly critically acclaimed, high quality content, but it was not meeting our financial expectations,” he said. Specifically, Activision Blizzard said previously that Destiny 2: Forsaken failed to sell up to the company’s expectations, though Bungie asserted that it wasn’t disappointed with the game.”
The report also states:
“When Activision Blizzard management conducted a financial review for 2019, the company saw signs that indicated Destiny would not be a “material contributor” to the company’s profit. Not only that, but Activision Blizzard assigned some of its own studios, including High Moon Studios and Vicarious Visions, to assist Bungie in developing Destiny content faster.”
On the topic of High Moon and Vicarious Visions, they are reported to continue working with Bungie on future Destiny content during this “transition period.” However, after said session is over, the two will go back to work on other Activision projects, with Activision-Blizzard planning to increase the number of devs working on titles like “Call of Duty, Candy Crush, Overwatch, Warcraft, Hearthstone, and Diablo” by about 20% (gradually) over the course of 2019 while laying off around 8% of its workforce — which resulted in King’s Seattle studio going belly up.
Furthermore, part of the reason behind the split is that Activision-Blizzard did not directly own Destiny or Bungie, so the company received less of a cut (or profit) than with its other games.
In layman terms, Activision-Blizzard couldn’t maximize profits from Bungie or the Destiny IP like its other major titles meaning that it wasn’t a “material contributor.” So, I guess this means that the company has to go think things over and talk to Yogurt the Great on maximizing profits via “merchandising.”
