Activision pooh-poohs silly Facebook games, sticks to 'Call of Duty' empire

It's hard to argue with sequel success: "Modern Warfare 3." the latest chapter in Activision's "Call of Duty" series, brought in over $400 million during the first 24 hours of sales. The Santa Monica-based videogame company says it's the biggest entertainment launch of all time - and another argument for sticking to old-fashioned console games. As I point out in the December issue of Los Angeles magazine, there has been some discussion about the company moving into the kinds of casual games found on Facebook. But CEO Bobby Kotick doesn't seem terribly interested. Some snippets from my piece:

We're talking silly games, nothing like Activision's guy-oriented titles that provide snazzy graphics and a realistic player experience. Those remain Activision's bread and butter, although the company has been under pressure--from Wall Street and else-where--to enter the casual ring. As of October Activision chief executive Bobby Kotick still wasn't ready. "If we can't put a creative foot forward, it's not interesting to us," he told me at the company's headquarters, which is tucked in an office complex on Ocean Park Avenue. In assessing Facebook, Kotick says he's been "trying to figure out what we could do that's different from what's being done. So now that they've gotten a large enough audience and we've done enough analysis of the opportunity, we can commit capital." He adds, however, "We don't have huge expectations."

Kotick, who is 48, heads an efficient and reliable consumer goods business, the kind investors love. The company's market value of $14 billion is nearly double that of Electronic Arts, one of its primary competitors, and Activision's stock has increased 40-fold since 1994. One reason for this success is an aversion to risk: The company concentrates on a limit-ed number of titles with the potential to become long-term moneymakers. The strategy, which Kotick describes as "narrow and deep," is similar to how film studios focus on megahits like Pirates of the Caribbean. Kotick clearly has a thing for Hollywood: He speaks at length about wanting to infuse video games with better stories and characters. (He also appears briefly but convincingly as the owner of the Oakland A's in Moneyball, his first movie role.) "What I'm good at," says Kotick, looking very much the studio boss with slicked-back hair, an open-neck white dress shirt, and a blue blazer, "is making sure we have the best resources, the best talent, the best marketing, and the best access to distribution."

SF-based Zynga, which has created many of those silly games, is about to go public - though at a substantially lower valuation ($7 billion) than what was talked about during the summer. Part of that tempering involves the IPO market in general and part of it relates to concerns about the company's propsects.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
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