Published On: Thu, May 7th, 2015

Activision Blizzard To Focus On Online Services

World Of Warcraft

The World of Warcraft owner is seeing it’s profits slide.

Creators of the popular video games Call of Duty and World of Warcraft, Activision announced this Wednesday that they will reorient their sales towards internet and online services since they are facing a big drop both in traditional sales and profit. The reason for the new plan is simply because every $3 out of $4 they make comes from the internet.

The two latest games of this company, Destiny, the space shooting game and Hardstone: Heroes of Warcraft, a card game had over 50 million new users last year, which brought 1 billion dollars in sales to the company. Both games earn most of their money by users buying upgrades, additional items and storylines while they are playing. Hardstone for tablets and smartphones comes as a free app, but it makes a lot of profit just from users that want to experience more from their game.

World of Warcraft which is the company’s longest and most successful franchise showed executives that they need to make more in-game updates and extensions than releases and extensions that come in physical form.

Once the user buys a game profit of the company comes to an end, but if you just make enough updates between two games your revenue can go sky high. The numbers are clear, as Activision reported around 538 million dollars come just from users buying extensions and new game items online.

Activision’s competition Electronic Arts and Take-Two Interactive have noticed that it’s not important how often you put out a new game, but how to keep players interested in the game and making users spend more time playing just one game. This approach is the reason for their growth compared to the loss Activision has experienced.

Call of Duty’s latest title Advanced Warfare is by far the most successful release counting double digits in the rise of sales, but what helped a lot in the company’s profit improvement is the fact they’ve put numerous additional items and supplies that the player can buy in game for small amounts of money.

Right now Activision is looking for new multiplayer games that will keep them on top. Their new World of Warcraft: Titan project failed, so they are now focusing their resources on the next Call of Duty extension called Black Ops 3: Overwatch that will be released as a beta version this fall. Also, they are trying to revive their game Guitar Hero which changed popular culture a few years back, challenging users to play popular rock songs with a plastic guitar controller.

The search for Activision will eventually come to an end but they must find a formula that will provide a game that can offer a sustainable income otherwise the company may face trouble .

Receive News & Ratings Via Email


Enter your email address below to get the latest news and analysts' ratings for your stocks with MarketBeat's FREE daily email newsletter:


Navigation