Activision Blizzard Stands Tall; EA Stumbles
Source: Tom's Guide US | Keywords: Intel, Electronic, Arts, Activision, Blizzard | Themes: Digital Entertainment
In this day and age, the words "technology" and "economy" usually come together when bad news is being delivered. Whether its layoffs, restructuring, corruption, or lackluster earnings reports, the tech industry is no stranger to the recession and the tough times that come with it.
So, it comes as a very big (and refreshing) surprise to see good news coming out of the gaming industry. According to financial analysts, Activision Blizzard is one of the best companies to invest in during 2009.
Lazard Capital Markets has named the game publisher its top technology pick for 2009. AB beat out other top-shelf companies like Broadcom, Cisco Systems and McAfee for the prestigious title. In a note that became public today, LCM called Activision Blizzard's stock a "relative haven" for 2009. Activision Blizzard, which publishes games like Guitar Hero and World of Warcraft, was the only game development company to appear on the Lazard list, which includes 13 companies from the energy, health care, transportation and technology fields.
"The [Activision Blizzard] shares are attractive based on industry-leading operating margins, a diverse online and offline revenue base, several of the strongest video game franchises, and a depressed valuation following the recent market downturn."
With games like StarCraft II and new properties in the Call of Duty series expected in 2009, among other things, its no wonder why Activision Blizzard is considered a safe bet.
While AB is doing well, the other big dog in the game publishing sector is feeling the recession squeeze. Electronic Arts is set to begin the latest round of layoffs. Announced last month, the layoffs will see around 1,000 employees receive pink slips, along with the closing or consolidation of up to nine locations across the company. With any luck, those affected by the layoffs will find their way back into the workforce in a speedy fashion.
While Intel is not part of the gaming industry, the tech giant revealed that its financial numbers had taken a sharp drop compared to the same quarter one year ago. With net income down 90 percent and revenue down 23 percent, Intel said that it would not be providing a revenue forecast for the current quarter because of economic uncertainty. According to CNet, it "internal" forecast for the first quarter is about $7 billion. With worldwide PC sales seeing a drop for the first time since 2001, the recession is now in full swing for the tech sectors.
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Diablo 3 will be one of the best selling games of 2010. The demos are extremely promising, and there are fans like me who have been waiting since 2004 or so for it.
That's another good reason to invest in Activision Blizzard, I guess.
EA just needs a better rootkit to distribute with it's games. That should make them profitable.
Calling all your customers thieves and any who disagree pirates really isn't good business. Their job cuts need to start at the top.
EA has gotten pretty fat, during recessions: gaming is relatively cheap entertainment.
Smaller studios make the best games and offer creativity that goes outside the box, I hate playing games that feel like they had some sort of cookie cutter success formula applied.
When am I going to get a High-Definition SSX from EA BIG?
I bought Tricky, 3, On Tour, and the Wii one.
i believe activision is doing well because of blizzard. it's a good thing too.
ea is doing bad because they're stupid as well as those other companies. there is only one console company that is profiting from all this recession. so i don't understand how people can say that video games isn't recession proof. how do you explain the profitability of the wii. nintendo is profiting and as a company like ea, it tells you where the money is at. but for some reason, the company doesn't want that money. why?! i have no idea.
Any gamer could have told you this a long time ago.
I actually was thinking today about how much money blizzard makes with World of Warcraft and it kinda shocked the hell out of me. They have 10,000,000 (10 million) players paying $15 a month. So 10,000,000 x $15 x 12 months. That's $1,800,000,000 a year (1.8 billion) in gross profit.
Awesome! EA sucks! With their insane draconian DRM and their hatred of PC Users (canceling all EA Sports games this year because of alleged piracy.), I hope they go under.
Intel is suffering because who's going to upgrade your computer if there are no blockbuster titles? Grand Theft Auto IV was absolutely horrid with its DRM. All these games like Far Cry 2 now have ridiculous DRM. Personally, I've been playing PC video games exclusively for the last 15 years and I feel like the end is near for the PC as a gaming platform. Sucks for Intel, ATI, and Nvidia.
is the decline in profits the reason that EA is now releasing their games on steam? i wonder.
now if only they would learn and completely drop DRM...
The companies will provide what the market demands, if they don't, someone else will step in and do it. Is EA feeling the pressure of creative destruction?
http://en.wikipedia.org/wiki/Creative_destruction
it's blizzards games and how they are targeted for the audiences which creates the massive audiences, which develops the income. when diablo 3 is released, it'll be a big seller because the people of blizzard is like nintendo, that is they think outside the box when they make games, which creates uniqueness. if activision can learn and use this to their advantage from blizzard, they can actually be a good third party supporter for wii and make loads of money like nintendo. but of course, we live in an imperfect world, so that won't happen.
The only problem with your Nintendo analogy is that Blizzard actually makes a lot of good games whereas the vast majority of Nintendo's games are terrible. I'm pretty sure that, like Apple, Nintendo's success is much more to do with marketing and hype than their actual product.
I actually was thinking today about how much money blizzard makes with World of Warcraft and it kinda shocked the hell out of me. They have 10,000,000 (10 million) players paying $15 a month. So 10,000,000 x $15 x 12 months. That's $1,800,000,000 a year (1.8 billion) in gross profit.
Want to know what their net profit is?
(Average number of active accounts since release) x (cost of original game) x (expansion) x (expansion) x (monthly subscription) - (250 million) = Net Profit.
yep, disagree too with the analogy.
blizzard games actually don't have uniqueness in them. i know a lot of gamers not fans of blizzard games but still play them.
they just work hard and make the game of best quality, thereby, mass appeal. they even produce game patches non stop.
i still remember the quality of diablo 1 during its time, quite scary and immersive for the hardware back then.
EA just needs a better rootkit to distribute with it's games. That should make them profitable.Calling all your customers thieves and any who disagree pirates really isn't good business. Their job cuts need to start at the top.
to badteh A-holes at top are teh oens doing the cutting work , i'm pretty sure they won't be cutting thier own jobs, even though theya re the ones that have screw the compnay into the spot it is in right now
Awesome! EA sucks! With their insane draconian DRM and their hatred of PC Users (canceling all EA Sports games this year because of alleged piracy.), I hope they go under.Intel is suffering because who's going to upgrade your computer if there are no blockbuster titles? Grand Theft Auto IV was absolutely horrid with its DRM. All these games like Far Cry 2 now have ridiculous DRM. Personally, I've been playing PC video games exclusively for the last 15 years and I feel like the end is near for the PC as a gaming platform. Sucks for Intel, ATI, and Nvidia.
it'sfar from the end , there are still plenty of honest companies , out ther that refuse to use any root kit like DRm , and they will be sticking with good ol cd key DRM , or better yet no drm (such as edios with the tomb raider series) I used to hate EA over thier drm (securom) ,but after thinking about it , i'm quite glade teh jerks in EA showed thier true colors, now pc gamers can focus on companies that don't use securom or other root kitish DRm's these companies al;l tend to be the little guys, the only out come i can see is better growth for siad little guys , while EA continies to lose money for thier DRm and thier Upper managament's behavior and insults they directed at the customers
it's blizzards games and how they are targeted for the audiences which creates the massive audiences, which develops the income. when diablo 3 is released, it'll be a big seller because the people of blizzard is like nintendo, that is they think outside the box when they make games, which creates uniqueness. if activision can learn and use this to their advantage from blizzard, they can actually be a good third party supporter for wii and make loads of money like nintendo. but of course, we live in an imperfect world, so that won't happen.
unique ? ummm no , as a student for game art design, i can 100% guarantee you that activision and blizzard in aprticular are far from unique , both compnaies hinge on a formulatic buisness model, with only activision breaking the ice occasionally and making new ip , blizard hasn't done new IP since the mid 90's , every game they have made since thin has been eitehr a sequel , or a off shoot of an exsiting IP, This is no wher near the definition of unique. However , in today's world it definitely spells MONEY , you amke a good solid sequel that works mechanically and it will sell regardless of rather or not it is mediocre, or even if you make a totally mediocre game it is gauranteed to get some profit at elast from fans of that genre (look at activisons 08 turok, totally mediocre but it had just enough "newness" to make a small profit)
now what blizzard does , is make Great formulatic games , every one is based of IP's that were started in teh mid 90's many of the sequels don't cahnge any thign or they change so little it is hardly noticable thus the original joy of the first game is cept intact in the sequel this ensures sucess. but FOR god's sake IT IS NOT unique.
The gaming market is unilaterally posting higher sales figures except for EA and Sony. So its not really the economy garnering this but the actual business.
EA is economically unsustainable simply because it has no organic growth. They need to buy all their big titles unlike Activision.
EA is economically unsustainable simply because it has no organic growth. They need to buy all their big titles unlike Activision.
That's because they treat their developers like crap and fuddle their minds with making them churn out crappy sequels (another madden anyone?). Of course suggesting your loyal customers are thieves and punishing them with destructive DRM measures won't win you any brownie points *cough spore cough*.
EA just needs a better rootkit to distribute with it's games. That should make them profitable.Calling all your customers thieves and any who disagree pirates really isn't good business. Their job cuts need to start at the top.
Since 2004? Damnnn lightwight
I've been waiting since they changed drop mods to prevent 20fcr from spawning on rare ammulets. (bastards!) and str/life on boots....
D3 is'nt going to be one of the best of 2010, (or whatever year they release it,) its going to be one of the best in history of a PC game, maybe even of all gaming media. Yes, noobs who have not played d1/d2, D3 will make GTA, halo and Titanic look like a a light fury in winter. D3 will be a "BLIZZARD."
Since 2004? Damnnn lightwight I've been waiting since they changed drop mods to prevent 20fcr from spawning on rare ammulets. (bastards!) and str/life on boots....D3 is'nt going to be one of the best of 2010, (or whatever year they release it,) its going to be one of the best in history of a PC game, maybe even of all gaming media. Yes, noobs who have not played d1/d2, D3 will make GTA, halo and Titanic look like a a light fury in winter. D3 will be a "BLIZZARD."
D3 will be-
a sequel
a repeat of what was already done.
a repeat of repetative hack and slash gmae play
a total money whoring game
another blizard game
a big whoopie s**t
i doubt the D3 will be revolutionary , in fact given blizzards track record will be quite what peopel expect from it , which in my book equals REHASH. sure it may be a great game , and sure millions of fanboys will go and grap it. but times have changed and hack N slash rpg's jsut don't cut it any more for me , and further more sales figures don't make for great games they only tell you the gmae sold well. perfect example is the Transformers movie , sure it sold super numbers at box office , but when you really disect the movie you come to realize what a turd of a film it was.
not saying that D3 willb e a turd , but i seriously doubt it wilkl make all those othe gmaes look "weak". especially since the diablo seires was never really much for story , i doubt that will change in D3 so it will actually look quite weak story wise compared to the likes of , GTA , halo , titanic, Mass effect, Fallout 3. oh and for teh record whya re you even comparing it to shooters ? D series is a rpg so get a grasp on reality my friend and compare it to same genre games (which it definitely falls short in the story when you stand it up against mass efect and fallout 3)
@ Demonhorde : Just because you don't like a given thing, doesn't make it bad. You're known for being wrong anyway.
I'm not impressed with the diablo 3 footage I've seen so far, but then, diablo 1 and 2 weren't particularily well done in the visual department either. Blizzard focus on gameplay, and that's why it'll be a hit. When the game is released it will 1) work out of the box 2) get support from blizzard for 5+ years 3) be patched if something doesn't work.
I think EA is losing ground because of the way their business works. Blizzard focus on quality. Every game they make, and they don't make many, is well developed and lives up to expectations. EA on the other hand lives on quantity. And when people can no longer afford to buy 3 new sports games, a new driving game, a new sims expansion and various other stuff every year, they'll lose money. With blizzard the customers pay for a select few titles, and most likely regard these expenses as nessecary. So while they may spend the same amount of money on wow and stuff, they may not feel they are doing so.
In short - I'm sure diablo 3 will be a great game, despite the shortfalls of the currently available data.
EA suffering because of alienating pirates? Ridiculous. It's like saying the banks are suffering from installing bulletproof glass to ward off bank robbers. No, thieves are customers you DON'T want, and they aren't customers in the first place, thus the theft part.
Stop the BS, most people who pirate do not buy the game once they have a free copy, there is just no reason to do so. If you are immoral enough to pirate in the first place, you aren't going to buy the game because "it's the right thing to do".
EA is suffering because its games suck. The Madden and Sports series were so unpredictable that often the newer version was worse than the previous year's version. They never seemed able to get the playability, realism, and cool abilities parts into balance for more than one year out of five. A new Madden won't be missed because people are so tired of "upgrading" to an unplayable version that they've stuck with their old Madden games that actually are playable and fun.
Spore was a flop from a gaming perspective, it just wasn't re-playable like awesome classics are. It wasn't due to DRM.
And to make it even more clear, pirates aren't customers so calling them thieves, which they are, won't change the bottom line. It's sad that lower budget games and smaller publishers/developers can't survive anymore because of pirating. Oh sure there's the occasional guy who makes it, but they need an absolute hit, they can't just make a solid game that is fun to play, but not revolutionary, or a niche type game like a turn based RPG or strategy simulation anymore.
So now we get less games and less variety. Of course the model is to release proven sequels because anything else can't survive due to pirating. You need a hit to make up for the thieves who are robbing the industry blind. Sad but true. Sequels have a better chance to become a hit thanks to familiarity and an established fan base. That's where the industry stands today.
@azxcvbnm321,
You are completely wrong. Many people I know will download a game to try it before they buy it. I don't even know anybody that pirates a game, enjoys the game, plays it a lot and doesn't buy it. The only time most people will pirate a game they enjoy and not buy it is if they can't afford it (e.g. students). Yes buggy games hurt a company, but the reason I don't (and many, many other people) buy EA games is because of DRM.
I bet you also think that people that download music don't buy it either. The vast majority of my friends work in the music industry and they whole-heartedly support pirating of music because they know that people that like their music will support them by either buying their albums, buying their merchandise and/or paying to see them play live.
As for your assertion that "lower budget games and smaller publishers/developers can't survive anymore because of pirating", that is just plain wrong. There has been a plethora of success stories of small publishers releasing games with absolutely no DRM and doing quite well with them. Its true that its hard to recoup the cost of development for games that are not huge blockbusters, but smaller games usually have much lower rates of piracy compared to actual sales.
Gm0n3y, maybe you can explain to me why the people you know will go and buy the game they just pirated. I think I understand what you mean, they will buy it if they get X amount of hours playing it and know that they'll keep on playing it forever. But a game that only gets them 60 hours of enjoyment, quite a lot I might add, but has no replay value and they'll never buy that game right, because it doesn't fit into their "good enough" category. Yet 60 hours or even 24 hours of enjoyment is quite a lot. A concert only lasts 3 hours or so if you're lucky, yet people pay hundreds of dollars just for that ONE TIME experience right?
So you're robbing developers that might want to create a cool game that has no replay value like Myst or some other game like that. What's wrong with a game that is set to be an one time experience like a concert or a movie? You've destroyed an entire category of games. So if you and your friends do what I think you do, which is only buy games that have great replay value, you've hurt the industry by pirating. Why would you buy a game that you've already finished thanks to pirating?
And there are demos out there for you to try, but of course the demos won't satisfy the pirate thief, the purpose is not to sample but to steal and get enjoyment. Then after playing for 30 hours and finishing the game, he can say the game sucked (even though he just spent 30 hours playing it) and justify not buying it. Yes, it's standard psychology for criminals to justify their immoral behavior. Look at Bernie Madoff, he hasn't apologized or looked sorry because he's somehow justified stealing $50 billion of other people's money. He's not wrong, what he did wasn't bad, maybe he gave money to a charity, so he thinks the rich people who he stole from are stingy and he's a modern day Robin Hood. Thus the criminal justifies his theft.
Companies don't want DRM either, but the damned pirates forced them to, blame the pirates. Wouldn't it be great if we didn't need car alarms and locks on our doors either? But damned thieves force us to and so when I hear an annoying car alarm, I blame the carjacker, not the owner who is forced to protect himself and his property.
That's not really how I work. To some degree, if a game only gives me 4 or 5 hours of enjoyment with no replay value, I will not buy that game. However, 60 hours is a huge number, that's probably a month of gaming for me. Most games I buy I don't even play for that long (unless they have great replay value).
I really get what you're saying, but to me a game that is only 4 or 5 hours of enjoyment (e.g. Spore) really isn't worth buying (though I did buy Spore and got fucked by EA's bullshit virus DRM). I guess you could say that I pirate games to use them as a full featured demo.
There are many games that I've bought that I have played for less than 24 hours total (e.g. Fallout 3). Perhaps I shouldn't be boasting about my choices, since there are less reputable types out there that will of course do as you have stated. I just felt the need to justify my actions, not because I feel guilty, but because I feel that it is not just a legitimate choice, but a moral choice that actually ends in me purchasing more games.
I fully agree with you gm0n3y.
I'd also like to point out the recent failure of Hellgate: London. I paid $49.95 and its $9.95 monthly fee ONLY to get a paid beta test and I could not return it for a refund. If you bought a car that didn't work you could take it back. Have I stolen a few games, yes , have I bought them afterwards, you bet. When EA releases a paid beta like Hellgate:London and refusing to refund my money, I think we as consumers diverse another game.