Sho_Nuff82
Member
This only applies if you have money to burn, not if you're in the business of making more money.
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Activision Blizzard loses 1.5 Billion $ Market Cap valuation since launch of Destiny
- Thread starter vinnygambini
- Start date
This only applies if you have money to burn, not if you're in the business of making more money.
99.9% of the time, "owning" stock does nothing to help the company grow. You just own a share of the company, that you usually bought from some other guy who already owned a share. There are rare instances that you are buying directly from the company treasury (i.e. the company is selling stock or an IPO), but you would never know this to be true. The money the company made on the stock was already made for the company sold the stock whenver it initially offered that share. Your buying or trading it is immaterial apart from some kind of benchmark of what the company is "worth". It does not materially affect the company's cash flow.
speculawyer
Member
The important word in that sentence is 'new'.
Looks like they dropped another $1Billion today.
Their market cap has dropped by more than the entire market cap of TTWO. Their market cap has dropped by more than the bloated amount Microsoft paid for Mojang (Minecraft).
This is just a small southern chain so far but...:
Now, did these games "fall off a truck" i.e. is this store selling stolen merch? Or are some distributors already starting to dump excess inventory?
If it's the latter, look to be able to buy Destiny from Tigerdirect or Buy/Rakuten or some other huge seller for $30 shipped on eBay within a week or two.
Brandsmart is essentially Big Lots. Been to the one in Kennesaw, Ga before they sold out to the college there. Overstock merchandise is essentially what they deal in, with shady financing terms sometimes.
Damerman
Member
yea, companies have gotten that big... but my demand for the stock has some kind of effect. IPO's are making people billionaires left and right, but that doesn't keep me from feeling like i'm playing my part even if i consistently invest in a company's common stock.
EDIT: also like Sho_nuff82 said, if you are a corporate raider like carl ikhan, its also possible to be my idea of an investor.
maabus1999
Member
Still amazing to see any retailer sell at this price one week out. You could buy all of their titles and give it to GameStop for 10 dollar profit/unit. Ha.
Edit:I now wonder if game stops trade in promotion is costing them more then they expected.
This is what I was thinking.
Other than a very few people getting really very rich, nothing good ever seems to come from companies going public.
speculawyer
Member
A+, would laugh again.
Yes, they sure did.
Ice cold. But hilarious.
BTW, there is still lots of CoD:Ghosts still sitting on store shelves from its initial shipment. I just picked up the Prestige edition for $84 (PS4 version) because it comes with a generic GoPro 960-like HD video camera. PS3 version with the HD camera is only $53:
http://www.amazon.com/dp/B00EEMLPR2/?tag=neogaf0e-20
If we assume Activision get $30 per game sold then that means they got $162.5M which would be a loss of $337.5M on Destiny as of now. If they sell the rest of the first shipment at full price the loss goes down to $250M(assuming their $500M was based on retail price).
I don't know how much was budgeted to development vs marketing but if the marketing budget for future installments goes down then that of course would lead to sales going down. Yeah it's the biggest new IP launch but it was also the biggest gamble with the biggest budget. Destiny 2 might not be viable and even Bungie might have to restructure their business because they might not be getting a budget like this again.
I don't know how much was budgeted to development vs marketing but if the marketing budget for future installments goes down then that of course would lead to sales going down. Yeah it's the biggest new IP launch but it was also the biggest gamble with the biggest budget. Destiny 2 might not be viable and even Bungie might have to restructure their business because they might not be getting a budget like this again.
CosmicQueso
Member
And that's the real catch.
The actual price of a game like this over the course of its life will not be $60. It actually usually ends up being in the ballpark between $33-$44. So it's not really 15 million, its quite a bit more.
shungokusatsu
Member
Hopefully this means loot 2.0 inbound? Pretty shocking they went with the current loot system given the reaction to Diablo 3, albeit that did see great reviews and it was ultimately consumer complaints and a drop in players that forced Blizzard to act.
So based on the above, it looks like Destiny shipped about 8 million units to retailers. (500 million divided by $60 equals 8.33 million, but a limited edition was sold for $100, probably reducing the total copies shipped to 8 million.)
About 5.3 million copies have been sold and 2.9 million copies are sitting on store shelves.
Considering Activision probably takes in half of the price of a game (with the other half going to the retailer), Acitivision has made about $162 million off of Destiny sales.
So it kinda looks like a bomb for them if sales don't have a decent tail — and with reviews and general buzz lukewarm post-release, a decent tail is unlikely. That's partially why investors jumped out today. (The other reason is the simple "buy low on rumor, sell high on news" stuff that's been mentioned in this thread.)
you think they know how people reacted to Diablo 3?
that would require them acknowledging the PC as a gaming platform.
That's just stupid. Ignoring the collectors editions and expansion pass this game is designed for a 10 year plan. THIS game doesn't need to sell 15 million copies, it needs to be a strong start to an IP that needs to grow.
maabus1999
Member
@ $30 a unit, 15 million unit sales is $450 million, so it is right in the ballpark of expectations of 15-16 million units sold to break even.
shungokusatsu
Member
They won't have a choice once folks start bailing left and right. The story can be completed in mere hours, leaving players with nothing to do but grind away at the same missions over and over and over again, or take a chance in PVP which is equally as random with drops and even more frustrating.
Astral Dog
Member
Meh,they will be fine, they have CoD coming, and Destiny made big money, even if the critical reception was mixed,they didnt spent $500 M just on a single game, apparently. a bit of a overreaction imo.
9/10
1st Course
Member
Remember guys the question is not whether Destiny is successful or not. The question is "Is Destiny successful enough to offset the decline from COD/WOW/Skylanders and other Activision properties?"
You don't buy a company stock based on one product performance, you buy based on the company performance as whole + their future outlook.
You don't buy a company stock based on one product performance, you buy based on the company performance as whole + their future outlook.
Always depends on the profit margin. Destiny has a huge budget, right?
Don't forget the retailers get their cut, Sony/MS their licensing fees etc. I think there was a breakdown which said publishers get $27 for each $60 game they sell. They'll get less for sales at lower prices.
Principate
Saint Titanfall
Of course, the main issue of a Destiny greatly underperforming is that Activistion will likely enter an era of contraction rather than expansion which is what Destiny was supposed to prevent and why they invested so much in it in the first place.
CosmicQueso
Member
Exactly... every time the price drops the pub eats the full amount of the wholesale price change.
Ingueferroque
Banned
Tidal wave of ruthless negativity around this game.
Yup!
silvermember
Banned
There are certain industries you can invest with that will be reliable for decades. Unfortunately, the gaming industry isn't really one of them. A especially a company like Activision, where their main products are beginning to wear out their welcome.
There are significant advantages to taking a company public, the main advantage is you have less personal risk involve with the added bonus of having a HUGE cash inflow.
But the fact that you made such a declaration definitely means you WILL never be in a position to make such a decision either. So it doesn't matter.
But there are a LOT more benefits to going public than staying private. Especially, for the individuals currently in the company that wants to go public. Depending on the size, they make bank with little risk other than that their stock might lose value by the time they can sell it. I doubt those employees from facebook care that their stock lost some value versus having no stock at all.
LOL without investors, Destiny would have not existed, or any game for that matter.
Must be. I get why people do not like the story or bullet sponges, but the gameplay is excellent. While bosses are bullet sponges, the regular enemies can easily be killed in one or two well-aimed shots, not something possible with the majority of Halo weapons. Also, the PVP is better, if played as a well-coordinated team of 3 or 6. Halo 4 had very little team building.
actually it's more like a psycho/analytic computer with a really good internet connection running super crazy expensive algorithms, buying and selling stuff in milliseconds. Or at least the part of it that makes money for the insiders is.
Chezzymann
Member
Besides indie games
Mr.Squirrel
Tom
Did they really spend 500m? I heard 500m was for 3 games, not just the first one.
mikekennyb
Member
There is a headline on the Activision Yahoo Finance page about the new raid launching this week.
It's a brave new world.
It's a brave new world.
Canis lupus
Member
It deserves the reviews. Destiny is disappointing. Where's the story? Where's my epic Mass Effect like campaign? It's not even a good Borderlands game. Also I got kicked out of my game a few times due to some wifi problems.
They didn't spend 500 million on Destiny, my god why is there still misinformation. The budget is for the entire franchise that Activision currently is willing to spend. GTA V had a budget of 265M and that game had a gigantic marketing. Destiny's marketing or production values aren't even close to GTA.
They didn't spend 500 million on Destiny, my god why is there still misinformation. The budget is for the entire franchise that Activision currently is willing to spend. GTA V had a budget of 265M and that game had a gigantic marketing. Destiny's marketing or production values aren't even close to GTA.
Primethius
Banned
Halo 3 had amazing SP (4 player coop to boot) and MP. Destiny without loot and drops just doesn't offer nearly the same amount of replayability.
Mr.Squirrel
Tom
According to Bungie, no they didn't.
http://www.gamespot.com/articles/destiny-budget-nowhere-near-500-million-bungie-says/1100-6420802/
I find it slightly strange for two reasons. One, Destiny is merely an addition to their lineup. It isn't like they actually took a year off from COD and this has to make up for it. Second, Activision does not own it, so it was never going to contribute as much to their bottom line.
Then again, stock prices depend on speculative outlook. If the sell through is less than they expected after a week, that will deflate the stock a bit.
Then again, stock prices depend on speculative outlook. If the sell through is less than they expected after a week, that will deflate the stock a bit.
Unlike WoW, COD has a lot of churn. What activision needs to know is how many "I just got my first console + game" type people are buying into COD. I'm just guessing, but the popularity of LoL, DuCO, Minecraft, and possibly DOTA (do 13 year olds play that?) are hurting the influx of new blood.
sono
Member
Indeed.
GungHo
Single-handedly caused Exxon-Mobil to sue FOX, start World War 3
Marketing isn't just for consumers. They're marketing for prospective investors.
access to capital.
Canis lupus
Member
If Destiny 1 had a 500m budget(which it hasn't), why would it need to sell 15m to break even? With those GTA numbers, it's implying that Destiny has to make 1 billion(lol)?
iamvin22
Industry Verified
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