ATVI is focusing on key franchises
Gaming companies’ performances are cyclical in nature. Not every game they release is a hit. There are a few hits and misses as companies try to understand what players want. However, once a game captures the collective imagination, a company can leverage its popularity by developing it into a popular franchise.
During Activision Blizzard’s first-quarter earnings call, CEO Robert Kotick stated that the company’s primary focus was the allocation of resources to its biggest franchises to drive operational excellence. Kotick stated, “We are increasing our focus and investment on our biggest franchises in order to better execute and unlock their great potential.”
More relevant approach
Activision Blizzard believes that prioritizing existing franchises and player communities will drive its long-term sales. The company wants to do a few things well instead of unnecessarily expanding into unknown territory. While Activision Blizzard will continue to invest in the development of new franchises, its primary focus will be on improving and innovating its existing ones.
ATVI has claimed that gamers now play fewer games for longer periods of time, and creating new franchises and sustaining player engagement is difficult. ATVI has a large base of popular franchises. According to Activision, over 500 million users have played Candy Crush since its launch.
Call of Duty has completed its 15th anniversary and is a multibillion-dollar franchise. Call of Duty is one of the most successful entertainment franchises of all time and has sold over 300 million units. Other popular games for ATVI include Diablo and Warcraft.
ATVI expects to benefit from tailwinds such as strong industry growth and company-specific opportunities. The total number of gamers continues to increase, providing the company with new opportunities to increase and manage user engagement and drive monetization.