Today, Activision gave stock investors a glimpse of what their business strategies were for the year 2006 and the future. CEO Robert Kotick gave his assessment and comments to an assembled audience of shareholders and the game press at the Merrill Lynch Media and Entertainment Conference held in Pasadena, California.
Kotick told stockholders that Activision will continue the course of developing successful proven game franchises. He said the company would keep, “…expanding control of intellectual property rights, either those that we own, or those that we rent for very long periods of time.” He spotlighted the franchises Shrek, Spiderman, Madagascar, and the X-Men, along with future titles that will coincide with the release of new DreamWorks films.
As far as the short term direction of the company is concerned, Kotick remained firm in his support of the present gen Playstation 2 game console. He said, “We are still going to be largely reliant on PS2 for this year. We have a lot of new [next gen] platforms, but we,re still looking at a relatively small installed base. Depending on what Sony does next year on [the PS3,s] price point, there,s still a lot of life left in the PS2…as long as there are innovative products based on existing franchises. [The PS2] should have some life left next year.”
Kotick sees developing games for the next gen platforms as a challenge for the company. “We,ve higher priced hardware than we,ve ever had before. Higher priced software than we,ve ever had before, [and] longer lead times to really take advantage of hardware…for the next couple of years, there still is a lot of volatility and a lot of risk in the release of software.”
In spite of the risks associated with developing new software for next gen consoles, Kotick also remarked that gaming would increase substantially during this period of new game consoles. He attributed the surge not only to the arrival of new hardware, but also to the increasing numbers of females who will be entering the causal game market.
Activision is taking strong efforts to make the company a lean, mean, game production machine. In steps to achieve their goals, Kotick described his company,s intention of “reengineering the production process.” Activision will be involved in “outsourcing and outshoring” production elements such as art and quality assurance (game testing) to India, China and Canada. Kotick indicated that Canada has business polices that are very favorable to the game industry, and will take steps to further their plans to establish a strong base there.
Activision is the world,s oldest video game publisher, established in 1979, and is ranked as the second largest game company in the world.
