Activision Nets Over $4 Billion a Year in Microtransactions

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Like it or not, almost any AAA game nowadays has some sort of microtransactions built in to make the publisher more money than just the initial game purchase. No stranger to this is Activision, who’s Call of Duty franchise is now expected to have some sort of microtransaction-type system built in with each new entry.

If you’re hoping that microtransactions will go away in the next Call of Duty, or even Destiny title, it seems that won’t be happening anytime soon. In Activision’s latest earnings call, Activision executive Collister Johnson shared that the publisher generates over $4 billion dollars per year!

“First, our team produced new content releases that invigorated distant communities and bring in new audiences. Second, our growing stream of live operations, which includes content, services, features and events that engage our franchise communities and encourage new players to join. Third, the expansion of our existing franchises onto mobile, the world’s largest platform, and the creation of new franchises. And fourth, new and growing franchise engagement revenue models such as esports leagues and digital advertising.

On the first driver, our teams continued to deliver exceptional innovation and execution with major new content releases for Call of Duty, World of Warcraft, and Candy Crush. These content releases reinforce a strong foundation for our second growth driver, live operations. We generate over $4 billion a year in net bookings from in-game content, which represents the growing majority of our net bookings, yet still offer some of the best value per hour in all of entertainment. We see the continued improvement of our live operations model as one of our largest growth opportunities with the potential to generate billions of dollars of high-margin incremental revenue as we deliver year-round in-game content for our community.”

That’s a lot of cheese on top of the usual $60 game purchase, no? Speaking of microtransactions, Activision has admitted that Destiny 2 sales aren’t living up to expectations, with the publisher pushing for the speed which Bungie releases new content, as well as “new opportunities” for microtransactions.

Activision’s latest Cal of Duty title, Black Ops 4, has recently caught the ire of the Call of Duty community given the Black Market’s slow progression with its tier system, which, as you can guess, can be mitigated by spending real world money. However, Treyarch has flipped the switch for this weekend as players will get double tier progression until Monday.

Source: SeekingAlpha (login required)

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LordCancer Kain
LordCancer Kain
5 years ago

this is why they are going mobile, core games are not worth the effort. this happens when you have a base unwilling to pay for games. ipad is now as powerful as an xbox. we are witnessing the end of an industry as it is supplanted by another and a more profitable consumer.

Alex
Reply to  LordCancer Kain
5 years ago

There is some truth to this. Gamers might see mobile gaming as this niche thing. but it generates a TON of money, and the cost to make these games are significantly lower than AAA titles.

Just a guy
Just a guy
Reply to  LordCancer Kain
5 years ago

Nobody is going to solely to mobile games.

They might make both, but they aren’t cutting out hundreds of millions of console and PC gamers to only make games for iPads.

LordCancer Kain
LordCancer Kain
Reply to  Just a guy
5 years ago

konami? but seriously they have adopted mobile schemes into console games. i can not think of a single game coming out that isn’t affected in one way or another by ridiculous progression systems and microtransactions.

you are seriously deluded if you do not think activision generating 4 billion in microtransactions doesn’t affect the kind of games they are going to make, just look at diablo immortal. it has been more than six years since diablo 3 released.

read what they are saying before you correct me.

“In terms of Blizzard’s approach to mobile gaming, many of us over the last few years have shifted from playing primarily desktop to playing many hours on mobile, and we have many of our best developers now working on new mobile titles across all of our IPs,” Adham replied.

many of blizzards best devs are working on mobile games, resources taken away from core games. they have shifted their focus from core to mobile, remember diablo 3 launched may 15th, 2012.

hundreds of millions of pirates and price whiners trashing steam reviews because a game goes on sale after a month when sales fall off versus those generating 4 billion dollars, the market has shifted.

AinurThunder
AinurThunder
5 years ago

Iwata warned us about mobile models damaging quality in the industry years ago when Apple introduce in-app purchases in mobile games. And he was 100% correct. Publishers are essentially allowed to stealth price gouge game assets via “small payments.” A skin asset that’s commonly practice to be included with a $60 base price may only be worth a few pennies (as it should in a fair, win-win transaction), but chop that skin out and shove it in a marketplace and you can charge $2 or a lot more – fabricating a much higher value by simply moving the asset from out of game and into a in-app marketplace. Markups for marketplace assets have hit 1000 fold in many cases and people pay. Shareholders got a taste of that blood and want more and more.

And because mainstream gaming sites, streamers and youtubers are 100% supported by publisher ads and also receive insider favors, perks, exclusives, etc. ALL of them are responsible for this anti-consumer state of the industry for not calling out companies in their price gouging schemes. Instead they helped to peddle these MTX marketplace apps on behalf of billion dollar publishers handing out 8s and 9s while watching their channels and sites grow as a result. A game only need to be perceived as “fun” (even if only for a day) as criteria – while simultaneously lacking content, story, proper AI, NPC/enemy design, level design, etc to be awarded a 9/10 and many subsequent “Why we’re so extremely excited for game X to release” articles.

Then the hype is built, massive sales are done with preorders, and publisher is then left to do as they please in terms of price gouging.

These publisher execs are the same greed-riddled, post 2008 crash finance execs who when left jobless went into gaming bringing all their banking scams from nickel and diming consumers when opening new accounts to squeezing what they can from a home loan (such as Well Fargo being charged with even more mortgage fraud this week alone).

TL:DR – Since consumers do not have the same reach as gaming sites and famous youtubers, when the latter start being the voice of the consumer proper vs publisher friendly and vehemently call out publishers for their price gouging then the industry might get back on course to quality.

AinurThunder
AinurThunder
5 years ago

Activision’s stock has been suffering as well. Iwata warned us about mobile models damaging quality in the entire gaming industry as a whole years ago when Apple introduce in-app purchases in mobile games and markets were inundated with extremely low quality Microtransaction apps. And he was 100% correct and was only a matter of time before MTXs went industry wide. The 80s had the same happen, but was limited to the 2600 in the form of low quality titles at high prices. Nintendo brought back and revived AAA gaming after that crash, so they speak from experience.

Publishers are essentially allowed to stealth price gouge game assets in low quality games now via “small payments.” A skin asset (like an armor set) that’s commonly practiced being included with the $60 base price may only be worth a few real world pennies (as it should be in a fair, win-win transaction), but chop that skin out and shove it in a marketplace and you can charge $2 or a lot more – fabricating a much higher value by simply moving the asset from out of game and into an in-app marketplace. Markups for marketplace assets have hit 1000 fold in many cases and people pay. Shareholders got a taste of that blood and want more and more.

And because mainstream gaming sites, streamers and youtubers are 100% supported by publisher ads and also receive insider favors, perks, exclusives, etc. ALL of them are responsible for this anti-consumer state of the industry for not calling out companies in their price gouging schemes. Instead they helped to peddle these MTX marketplace apps on behalf of billion dollar publishers handing out 8s and 9s while watching their channels and sites grow as a result. A game only need to be perceived as “fun” (even if only for a day) as criteria – while simultaneously lacking content, story, proper AI, NPC/enemy design, level design, etc to be awarded a 9/10 and many subsequent “Why we’re so extremely excited for game X to release” articles.

Then the hype is built, massive sales are done with preorders, and the publisher is then left to do as they please in terms of price gouging. People took the bait and paid – so done.

These publisher execs are the same greed-riddled, post 2008 crash finance execs who when left jobless went into gaming bringing all their banking scams from nickel and diming consumers when opening new accounts to squeezing what they can from a home loan (such as Well Fargo being charged with even more mortgage fraud this week alone).

TL:DR – Since consumers do not have the same reach as gaming sites and famous youtubers, the latter must start being the voice of the consumer proper vs publisher friendly. Time to vehemently call out publishers for their price gouging so the industry might get back on course to quality.

Alex
Reply to  AinurThunder
5 years ago

FYI, gaming sites usually have an ad publisher that handles ads for said site, which the editorial team doesn’t talk to. This is the same with us and the other sites I worked for.

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