Support NeoGAF

[Northeastmonk]

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.

I want 3 copies and that toaster.

 

[Fularu]

Activision Blizzard should just sell the Spider Man rights back to Disney at this point.

I'm prety sure Activision whishes they could get rid of spidey's license if my friends at Beenox are to be believed.

 

[SparkTR]

The fuck were these people expecting????

CoD skewed expectation for these kinds of people, they want something like 15+ million copies sold consistently between entries, especially since it's on 4 platforms. Honestly the fact that this didn't out-performance Watch-Dogs is surprising.

 

[JetBlackPanda]

so it did worse then Watch dogs?

 

[ScatheZombie]

The fuck were these people expecting????

It's not uncommon for publishers to have completely unattainable expectations for their products. It comes from a combination of:

Setting unrealistic expectations for investors in order to justify bloated budgets (both for development and marketing) and to generate investor interest and venture capital.

And

Setting unrealistic goals for developers in order to ultimately justify not paying them out royalties or bonuses due to any one or more of missing unattainable deadlines in production, missing unattainable thresholds for development advances, missing unattainable thresholds for aggregate reviews, missing unattainable thresholds for quarterly and cumulative profitability.

For example(s): Tomb Raider selling ~4m units and still being publicly considered a 'disappointment' by SquareEnix. Or THQ seeing Darksiders sell about 1.2m units turns around and expected Darksiders 2 to sell more than double that (only sold around 1.5m, still more than the original but 'below expectations'). Or that Titanfall numbers still haven't been released (which implies that they were 'below expectations') even though it's obvious they did pretty well.

 

[a.wd]

Now THATS a loot drop.

Legendary

 

[Sothpaw]

Well Destiny just isn't that great and the reviews reflect it. Stock declines due to the future prospects for the series not looking as strong as before the launch. Makes sense.

 

[injurai]

Dat AAAA bomba

for real, industry keeps getting unhealthier

 

[Mman235]

One of the biggest entertainment launches in history and it's still not enough? In terms of AAA crashing/contracting it seems that the straw that breaks the Camel's back is only a matter of time at this point (of course, looking at how few releases there have been recently it seems like it's already somewhat happening).

 

[Aquamarine]

One of the biggest entertainment launches in history and it's still not enough? In terms of AAA crashing/contracting it seems that the straw that breaks the Camel's back is only a matter of time at this point (of course, looking at how few releases there have been recently it seems like it's already somewhat happening).

When you spend $500 million on one game, and plan to spend a lot of money (perhaps even $1 billion+) on a franchise, expectations are off the charts. It needs to continuously smash records just to break even.

Anything less than Call of Duty / GTA V just isn't enough.

 

[ShinMaruku]

I don't know who's more silly, the investors or the hyperbole here. I'll just assume they are one and the same.

 

[MightyHedgehog]

Legendary

No, just rare.

 

[March of the Crabs]

It is very sad that the industry has reached a point where smashing sales records just isn't enough.

 

[Gestault]

Wait, more than 15 million copies need to be sold from this franchise of 3 games to make a profit? And then there's taking the anatomy of a $60 box into account. Damn.

Based just on that estimation of the retailer cut, this is a poor reference point for the breakdown of what expenses go into a game.

 

[Fine Ham Abounds]

buy on rumour, sell on news

.

Legendary

 

[we.are.the.armada]

So basically they expected a legendary... but got a rare.

 

[Beer Monkey]

It is very sad that the industry has reached a point where smashing sales records just isn't enough.

Front'-loaded sales records don't really mean that much when you are trying to make the next CoD/Halo 'evergreen' franchise.

I don't know who's more silly, the investors or the hyperbole here. I'll just assume they are one and the same.

Since you are smarter than the investors you should spend your life saving's on the Activision stock, since it has to be undervalued due to the dumb investors dumping it.

 

[DudeWithNoName]

I just wish that we could go back to games being previewed, talked about, then released without all of this ridiculous hype [marketing $$$]. Let the games speak for themselves. No high expectations.

I know, I know. Unicorns and rainbows...

 

[boiled goose]

Best selling new ip? Didn't wiifit sell 30 million at $90?

 

[flkraven]

Best selling new ip? Didn't wiifit sell 30 million at $90?

And Wii Sports is the second best selling game of all time, but Wii games don't count because of reasons.

 

[Orayn]

Best selling new ip? Didn't wiifit sell 30 million at $90?

According to Wikipedia, it sold 4.53M from May to the end of the year in the US, 18.22M worlwide in 18 months.

 

[JinjoUnchained]

Anyone here buy Activision stock during the open beta and then sell after launch day? This all seems like classic arbitrage to me.

Yes, sales of new Destiny discs will likely tank once Gamestop has a large stock of cheaper used discs on the shelves from trade-ins. Used stock should be enough to satisfy post-launch demand. Sales will likely drop off like they drove over a cliff, Thelma & Louise style.

This is exactly why the used game market is a good thing. The trade-in market will be large enough to satisfy post-launch demand BECAUSE the game didn't satisfy launch day customers. Had it been received better, launch day users would hold on to their discs and not create a secondary market, so post-launch demand would only be fulfilled by new copies. It all comes down to the quality of the game, so potential lost sales due to a launch-window used game market acts as a quality control measure.

 

[gatti-man]

When you spend $500 million on one game, and plan to spend $1 billion+ on a franchise, expectations are off the charts. It needs to continuously smash records just to break even.

Anything less than Call of Duty / GTA V just isn't enough.

Yeah except that's not how much they are spending lol.

 

[Peltz]

The past few days however, it seems investors are singing a different tune due to Destiny lukewarm reviews and disappointing sell-through - over 500 million $ worth of shipments were sent out to retailers - nonetheless only 325 million $ sold-through thus far effectively leaving 175 million $ worth of inventory on store shelves.

I'm pretty sure that straight line subtraction isn't even a remotely accurate way of valuing the inventory.

 

[LordOcidax]

Best selling new ip? Didn't wiifit sell 30 million at $90?

I think, they are talking about the debut.....

 

[Opiate]

They still have Call of Duty to come out later this year, I dunno looks like a end of the quarter sell off by investors.

Something like CoD success is already factored in to the price of the stock.

Think of something like toilet paper sales as an example here. Every quarter, Charmin* reports that they continue to sell a lot of toilet paper. Why doesn't the stock go up? Because those sales are expected, and the price of the stock already reflected the assumption that, yes, people were still going to keep buying lots of toilet paper. If Charmin wants their stock price to go up, they need to do something unexpected. If they not only sell a lot of toilet paper, but sell 2x as much as usual? Yes, that would bump the price, because that would be unexpected.

Now use that same idea in the gaming realm. CoD11 selling as much as CoD10 would have little effect on the stock price, because that's what everyone already more or less expects. The price of ActivisionBlizzard stock already values continued CoD sales, continued Diablo sales, and continued WoW subscriptions. The price changes if one of those things either 1) Suddenly, unexpectedly stops bringing in money, which would drive the stock price down or 2) Suddenly, unexpectedly shoots up way more than people predict, like WoW subs suddenly going up 50% again or something. Destiny is doing worse than investors predicted, so prices are going down.

Hope that helps explain how stock prices work.

*Charmin is actually part of a larger corporate conglomerate, so you can't actually buy stocks specifically in Charmin. It's just an example.

 

[Aquamarine]

Yeah except that's not how much they are spending lol.

Okay, then prove me wrong.

http://www.reuters.com/article/2014/05/06/us-activision-destiny-idUSBREA4501F20140506

Activision Blizzard Inc intends to spend $500 million developing and promoting "Destiny," potentially breaking industry records as it seeks to build the sci-fi role-playing videogame into its next multibillion-dollar franchise.

CEO Bobby Kotick revealed the number, which dwarfs Hollywood spending on some of its biggest firms, during the Milken conference in Los Angeles last week. A company spokesperson said on Monday the number was accurate but also included marketing, packaging, infrastructure support, royalties and other costs.

Activision, eyeing the flagging growth of its long-running "Call of Duty" action-shooter franchise, is eager to lay the foundation for its next multi-game blockbuster series.

Investors hope that "Destiny," scheduled for release on September 9 from Bungie, the same studio that created Microsoft's best-selling "Halo" franchise, could re-invigorate Activision's revenue, which slid 6 percent in 2013.

The company signed a 10-year contract with Bungie in 2010 that gives it worldwide distribution rights and significant control over the potential franchise's development.

"If you're making a $500 million bet you can't take that chance with someone else's IP," Activision CEO told the Milken conference. "The stakes for us are getting bigger."

Analysts said $500 million would likely be a record spent on a single game - especially one without an established track record. To break even, Activision would have to sell about 15 million to 16 million units of a $60 game, analysts said.

http://thehightechsociety.com/007-bungie-destiny/

The original makers of Halo, one of the most popular Xbox 360 games ever released, are in the process of working on a new game. Bungie’s Destiny was recently leaked as a 10 year project with more than a 1 billion dollar budget. The goal, says the leak, is to create a gaming franchise deeper, and potentially just as popular, as Star Wars. An ambitious motive, but with their funds, time, and some of the best game developers on the planet, the Bungie Destiny video game could be just that.

 

[spwolf]

disappointing sell-through - over 500 million $ worth of shipments were sent out to retailers - nonetheless only 325 million $ sold-through thus far effectively leaving 175 million $ worth of inventory on store shelves.

actually, if I remember correctly from the sales threads, 70% sell through is pretty damn good, it means they planned well.

 

[gatti-man]

Okay, then prove me wrong.

http://www.reuters.com/article/2014/05/06/us-activision-destiny-idUSBREA4501F20140506




http://thehightechsociety.com/007-bungie-destiny/

You just proved yourself wrong. You said 1 billion that says 500 million on the destiny IP not even specifically the destiny launch game.

 

[Orayn]

Okay, then prove me wrong.

http://www.reuters.com/article/2014/05/06/us-activision-destiny-idUSBREA4501F20140506




http://thehightechsociety.com/007-bungie-destiny/

Bungie responded to that, so it's their word against Acti's. See bdizzle's post, it's more recent than the Reuter's article.

 

[Aquamarine]

You just proved yourself wrong. You said 1 billion that says 500 million on the destiny IP not even specifically the destiny launch game.

You're not making any sense. I did not "just prove myself wrong."

Tell me precisely, using direct quotes from the websites I gave, where I proved myself wrong.


This:

Analysts said $500 million would likely be a record spent on a single game - especially one without an established track record. To break even, Activision would have to sell about 15 million to 16 million units of a $60 game, analysts said.

...indicates that the $500 million is for the launch game.

 

[Beer Monkey]

Bungie responded to that, so it's their word against Acti's. See bdizzle's post, it's more recent than the Reuter's article.

Bungie doesn't write marketing checks and Bungie isn't bound by SEC rules about what publicly traded companies can say.

 

[gatti-man]

When you spend $500 million on one game, and plan to spend $1 billion+ on a franchise, expectations are off the charts. It needs to continuously smash records just to break even.

Anything less than Call of Duty / GTA V just isn't enough.

You're not making any sense. I did not "just prove myself wrong."

Tell me precisely, using direct quotes from the websites I gave, where I proved myself wrong.


This:



...indicates that the $500 million is for the launch game.

It doesn't say that specifically and the original contract we saw was 500 million for the IP. And nowhere ever written has the number 1 billion like in your post been thrown around. You're making conjecture and trying to validate it with links.

 

[Jamix012]

Being the best selling new IP OF ALL TIME isn't enough!?

I thought I read it was behind Watch Dogs.

 

[Xav]

Activision's going to have to grind this one out to turn a profit.

 

[K-A-Deman]

Why are we harping on a damn video when we had our hands on an alpha and Beta that showed us what we were getting


Gamers, I swear, so... Entitled with out knowing half of what goes into making a game.

Was everyone able to play the Alpha/Beta? Did the Alpha/Beta receive widespread public attention like the demo video did? Not everyone followed this game religiously, and only saw the big highlights from E3 or Trade Shows, where they would be playing it up to it's absolute highest vertical boundaries.

And while I agree that there's a sad degree of ignorance involving game development, but that can't be helped with how concealed and secretive so many of these companies are

 

[Orayn]

June 24, Bungie COO said to ask Acti about marketing budget, but the dev budget isn't anywhere near 500 million.

Q: The $500 million figure that was bandied about, are you able to talk about the split of that between development costs and marketing at all?

Pete Parsons: For marketing you'd have to ask Activision people, but for development costs, not anything close to $500 million. I think that speaks a lot more to the long-term investment that we're making in the future of the product.

http://www.gamesindustry.biz/articles/2014-06-23-bungie-coo

June 28, repeat and clarification that it's still not $500 million with marketing included.

Back in May, Activision Chief Executive Officer Bobby Kotick revealed that the publisher will invest $500 million in Bungie’s upcoming shooter, Destiny. Since then, that figure has been associated with the development and marketing budget of the game, but Bungie recently said it isn’t accurate.

Responding to a question from a fan, Bungie’s Eric Osborne repeated the developer’s Chief Operating Officer Pete Parsons’ explanation: “For marketing you'd have to ask Activision people, but for development costs, not anything close to $500 million,” Parsons told GameIndustry International in an interview. “I think that speaks a lot more to the long-term investment that we're making in the future of the product.”

“We’re pouring everything it takes into Destiny to ensure it meets our fans' expectations, and our own,” Osborne added. “Activision is, too. But the budget for Destiny, including associated marketing costs and pizza Wednesdays, is nowhere near 500 million dollars.”

http://www.gamespot.com/articles/destiny-budget-nowhere-near-500-million-bungie-says/1100-6420802/

Activision did repeat the $500M figure again more recently, but not in any detail.

 

[Aquamarine]

It doesn't say that specifically and the original contract we saw was 500 million for the IP. And nowhere ever written has the number 1 billion like in your post been thrown around. You're making conjecture and trying to validate it with links.

You still haven't proven me wrong with any direct evidence. Come on, you can do it.

 

[maabus1999]

Bungie responded to that, so it's their word against Acti's. See bdizzle's post, it's more recent than the Reuter's article.

Activision is the publisher so they will have the correct numbers. also these professional analysts expectations are coming from information provided by the company

 

[gatti-man]

You still haven't proven me wrong with any direct evidence. Come on, you can do it.

Haha how can I prove something completely ridiculous like the claim Activision is going to spend 1 billion. On destiny wrong? Like I can just summon Kotick on whim to prove every crazy thing you post wrong.

Nothing you posted backs up your claims. You have nothing concrete at all. You're wrong.

 

[vinnygambini]

(Reuters) - Activision Blizzard Inc intends to spend $500 million developing and promoting "Destiny," potentially breaking industry records as it seeks to build the sci-fi role-playing videogame into its next multibillion-dollar franchise.

CEO Bobby Kotick revealed the number, which dwarfs Hollywood spending on some of its biggest firms, during the Milken conference in Los Angeles last week. A company spokesperson said on Monday the number was accurate but also included marketing, packaging, infrastructure support, royalties and other costs.

http://www.reuters.com/article/2014/05/06/us-activision-destiny-idUSBREA4501F20140506

It's right there. Let's stop with this budget nonsense. It's confirmed at 500 million $ as per Activision.

Bungie is right in their saying. The development budget was nowhere near 500 million $; however, if one includes the above, 500 million $ is the expected budget for the title.

 

[maabus1999]

look guys bungie is a public company so they don't have to be accurate in the information they provide the public. those quotes you are referencing are just expectation management quotes. Activision on the other hand is and must provide accurate information. and that is seen by a professional analyst expectations of selling 15 to 16 million to break even.

 

[gatti-man]

http://www.reuters.com/article/2014/05/06/us-activision-destiny-idUSBREA4501F20140506

It's right there. Let's stop with this budget nonsense. It's confirmed at 500 million $ as per Activision.

Bungie is right in their saying. The development budget was nowhere near 500 million $; however, if one includes the above, 500 million $ is the expected budget for the title.

1 billion. Where does your link say anything about 1 billion? I don't see it. We also have comments from Activision thrilled that they shipped out what they expected to sell the first year already. Why would you expect to sell 5 million units of something you put 500 million into specifically. It doesn't add up.

But one thing we do know. 1 billion is a made up number.

 

[Malyse]

 

[madmackem]

Front'-loaded sales records don't really mean that much when you are trying to make the next CoD/Halo 'evergreen' franchise.



Since you are smarter than the investors you should spend your life saving's on the Activision stock, since it has to be undervalued due to the dumb investors dumping it.

Cod didn't sell mw numbers till well modern warfare came out did it?. Destiny sold a shit ton of copies while being and online only shooter and on a smaller new install base, I don't even count last gen sale given the split we saw in the uk sales and most games that have done out in the past few months split new gen to old gen. People toss this 500 million number around like its gospel when it seems it steamed from and off hand comment.

 

[vinnygambini]

1 billion. Where does your link say anything about 1 billion? I don't see it. We also have comments from Activision thrilled that they shipped out what they expected to sell the first year already. Why would you expect to sell 5 million units of something you put 500 million into specifically. It doesn't add up.

But one thing we do know. 1 billion is a made up number.

Please point me to the direction where I have claimed that the budget for Destiny is 1 Billion #?

 

[madmackem]

http://www.reuters.com/article/2014/05/06/us-activision-destiny-idUSBREA4501F20140506

It's right there. Let's stop with this budget nonsense. It's confirmed at 500 million $ as per Activision.

Bungie is right in their saying. The development budget was nowhere near 500 million $; however, if one includes the above, 500 million $ is the expected budget for the title.

I'm sure the number was given expected budget over the life time of the title not day zero.

 

[Aquamarine]

Never mind.

 

[gatti-man]

Please point me to the direction where I have claimed that the budget for Destiny is 1 Billion #?

You didnt. Aquamarine did. That's what we were "bickering" about when you posted your rueters piece which is still suspect due to what I already said in my last post.

 

[Orayn]

http://www.reuters.com/article/2014/05/06/us-activision-destiny-idUSBREA4501F20140506

It's right there. Let's stop with this budget nonsense. It's confirmed at 500 million $ as per Activision.

Bungie is right in their saying. The development budget was nowhere near 500 million $; however, if one includes the above, 500 million $ is the expected budget for the title.

The second part of Osborne's quote to Gamespot says it's still not $500M with advertising included, so then the question is how much that extra stuff inflates the figure, and whether or not all of those costs are included when we talk about other games' budgets.

Also, I find it hard to believe that Bungie would be completely in the dark about their own game's advertising budget. When you have an exclusive ten-year deal with a publisher, you'd think there'd be enough communication that someone would at least have a rough idea.