Last week Activision Blizzard, Inc. talked about the company’s first quarter earnings in a conference call with shareholders. Much of the commentary from the company’s executives addressed the industry’s shift toward digital distribution platforms and the ability to deliver their product directly to gamers. With the approach of the E3 Convention in June, Activision Blizzard CEO Bobby Kotick says he hopes console makers focus on their online networks more than the consoles themselves.
“The industry is evolving – we had more than 50 per cent of our revenues from digital this quarter – and one of the things you realize is that there’s less of a need for new hardware when people become much more enthusiastic about the online components of the game,” said Kotick during last week’s conference call.
Activision Blizzard publishes the wildly successful Call of Duty series. The most recent installment in the series, Call of Duty: Black Ops, broke all records, to become the best video game launch of all time. So far, Activision has digitally released two content packs for the game that contain additional gaming maps and forms of gameplay. The two digital releases, Call of Duty: Black Ops First Strike and Call of Duty: Black Ops Escalation, are available directly through Xbox LIVE and have sold extremely well. In fact, Black Ops: First Strike logged 1.4 million downloads in the first 24 hours.
“We’ve more confidence in consumer spending, we feel like spending has stabilized and there are price cuts on the [console] hardware in the works,” said Bobby Kotick. “With an increasing amount of business available in digital markets, it makes sense to make it easier for more people to access those digital products.”
Bobby Kotick’s remarks towards console makers coincided with a security breach that occurred of the PlayStation Network. While a shutdown of the Network did not affect Activision’s financial outcome in the first quarter, it is still a cause for concern. Kotick believes that the gaming industry will benefit from console makers focusing more on their networks and not so much on creating state-of-the-art hardware.
“The platform used to be just the box, but the platform today is really the box plus all the online services and capabilities,” said Robert Kotick.
Activision has plans to release its own gaming platform specific to the Activision Call of Duty franchise. The new platform will offer users a specialized experience geared towards optimized Call of Duty gameplay. While Activision is not abandoning physical game releases, it believes the future lies in the digital sector of the industry. The company is expected to showcase its new platform at this year’s E3 Convention in Los Angeles.
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