Activision: Social Monetization 'Very Speculative,' Digital Sales Up

Despite the booming online social game market, Activision Blizzard CEO Bobby Kotick warns that, although his company is "hopeful" about the segment, "monetization opportunities are still very speculative" -- even as the publisher's performance in the digital download arena is at an all-time high. In an analyst conference call following financial results, Kotick said Activision is "spending a lot of time looking at" social games. "When there is an opportunity for a new platform or revenue opportunity, we always approach it thoughtfully, and we've had great success in doing that," Kotick explained, "and I don't think this new category is any exception." Nevertheless, he said, when "you talk about casual games like FarmVille in Facebook, the monetization opportunities are still very speculative." In the end, the CEO said, regardless of the platform or business model, the one key factor that drives long-term success in a market is the same. "Whether it's iPhone, or going back to the PC, or eventually a browser on a television, the one thing that's a critical skill in being able to exploit all these platforms it the ability to make compelling content," Kotick said. "When you look at the 8,000 people we have at the company, and the 20-year track record we have creating content and...doing it in an extremely profitable way, these new platforms will be no exception," he continued. "If there's an opportunity to take advantage of in social gaming, there's no company that's better positioned to capitalize on it than we are." Activision has been realizing significant returns in the digital download space, however. The company said it has has achieved an all-time high in digital revenues -- including digitally-distributed PC games, DLC for console and PC games, subscription-based games, and mobile games. That sector of the company's business is expected to grow by double digits in 2010, and Activision sees worldwide digital revenues rising 20 percent in contrast to projected single-digit retail declines. In particular, Activision pointed to a subscriber base of 11.5 million active World of Warcraft players, an "all-time high" of PC download sales with Call of Duty: Modern Warfare 2 (which incorporated Valve's Steamworks digital distribution API), and 8.5 million unit sales of the Call of Duty: World at War digital map pack. Furthermore, Blizzard said its revamped Battle.net online gaming service will be a digital distribution platform, not just a multiplayer hub, and as a result, Activision expects StarCraft II to be a big driver of digital sales in 2010.