Activision Blizzard loses 1.5 Billion $ Market Cap valuation since launch of Destiny

FStop7

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325$ Million in the first week for a new IP is insanely good. The majority of sales occur within the first two months of a game's launch, so I wouldn't declare it a disaster yet.
$325 million is a ton of money but given what's been put up by Activision, the question is if it's enough to satisfy them.

I always wondered what might happen to Bungie if their new IP underperformed after it was announced that Activision was going to publish... sounded like a deal with the devil. Of course Activision was a different company back then, Kotick seems to have mellowed out a bit.
 

Aquamarine

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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.
Bobby Kotick, the CEO of Activision Blizzard, stated the $500 million figure for the one title.

But I agree with madmackem....that $500 million figure is probably the total, complete cost throughout the life of the original Destiny title.

I don't think Activision has spent $500 milion on the title 'to date,' but I do think they will have spent $500 million on the title before the next iteration of the Destiny series comes out.




AND guess what, man? I have some good news for you!


Because I just did some more research on the $1 billion figure.



Originally I read this link which stated the $1 billion figure:

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."

...and I can easily believe that, over a 10 year period and 4 iterations...Activision Blizzard could very well rack up $1 billion on developing and marketing the series of titles in the Destiny series (since they're spending $500 million on just the first one).


But UNLIKE THE $500 MILLION FIGURE DIRECTLY STATED BY THE CEO OF ACTIVISION BLIZZARD FOR THE ORIGINAL DESTINY TITLE, I haven't been able to find any---direct---figures stated by Activision Blizzard that allude to a $1 billion total cost.

Therefore, I'll concede that point and edit my post.

So no more bickering, okay? ;-)
 

gatti-man

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W can't have all the information. Why would you give a launch IP title 500 million and be happy with 4 million in sales given they get $30 per sale. That's a disaster. This doesn't add up.
 

silvermember

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W can't have all the information. Why would you give a launch IP title 500 million and be happy with 4 million in sales given they get $30 per sale. That's a disaster. This doesn't add up.
It adds up or in this case down, when you realize that the reaction is based on the disappointing sales. When expectations are met, stocks usually go up, not down.

BTW I don't think the investor gives a cares whether or not it is a new IP. All they see is that their investment did not pay off in a way they expected.

New IP is just a silly gamer justification for an overhype game not succeeding. I doubt the guys at JPMorgan will be saying "expectations were not met, but it is OK because the product was a new IP".
 

Valonquar

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Ship what doesn't sell back, repackage as GOTY edition with an extra code that includes some DLC everyone else already bought and restock at full price. 3 months later ship those back and repackage as Greatest Hits without the DLC codes.
 

Orayn

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It adds up or in this case down, when you realize that the reaction is based on the disappointing sales. When expectations are met, stocks usually go up, not down.

BTW I don't think the investor gives a cares whether or not it is a new IP. All they see is that their investment did not pay off in a way they expected.

New IP is just a silly gamer justification for an overhype game not succeeding. I doubt the guys at JPMorgan will be saying "expectations were not met, but it is OK because the product was a new IP".
I don't see how it's a silly justification when a lot of major annual or semi-annual franchises took several installments to reach their current sales numbers.

Not saying that Destiny couldn't have missed projections, but it's also silly to act as if a series' history is a complete non-issue with respect to how well it sells.
 

Beer Monkey

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New IP is just a silly gamer justification for an overhype game not succeeding. I doubt the guys at JPMorgan will be saying "expectations were not met, but it is OK because the product was a new IP".
Agreed. In May 2003, a brand new IP was released by Microsoft, only on Xbox. This new IP set first day and first week sales records for the Xbox. The game was targeted to consumers as the next Halo (it even intentionally used the Halo control schemes).

The game, as everyone knows, was an abject failure. The IP went nowhere. The studio was shut down.

Now, nobody should predict the same outcome for Bungie and Destiny, but it's worth looking back and seeing the similarities, especially when it comes to those front-loaded sales numbers. Launch week sales shouldn't be used as a measurement of any title's success unless it is a low budget game which can immediately hit profitability.

I'm trying to find any still-available analyst's remarks from the 2003 title.

Anyhow, never forget.

 

Biker19

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Apr 1, 2013
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$325 million worth of sales and they're still almost 200 million below their projections.

Welcome to the games industry.
Perfect example of why the AAA business model is unsustainable and downright idiotic for the most part.
3rd party companies need to learn to stop making bloated budgets on development & on advertising the games. That's the main issue.

Either that, or start cutting back on making AAA titles.
 

hodayathink

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Bobby Kotick, the CEO of Activision Blizzard, stated the $500 million figure for the one title.

But I agree with madmackem....that $500 million figure is probably the total, complete cost throughout the life of the original Destiny title.

I don't think Activision has spent $500 milion on the title 'to date,' but I do think they will have spent $500 million on the title before the next iteration of the Destiny series comes out.
This makes sense. The base game hasn't cost $500 million, but developing and advertising this game plus developing and advertising all of it's DLC over the course of two years plus other costs associated with keeping the game going could get to that amount. Which would mean that when figuring out whether of not it will "make it's money back" off that $500 million number, you'd need to know how much DLC they'll sell as well. And that's where the lukewarm reception will hurt it just as much as anywhere else.
 

silvermember

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I don't see how it's a silly justification when a lot of major annual or semi-annual franchises took several installments to reach their current sales numbers.

Not saying that Destiny couldn't have missed projections, but it's also silly to act as if a series' history is a complete non-issue with respect to how well it sells.

Like I said, "new IP" is a gamer excuse. It is not the excuse Activison or its investors care about. They invested a lot of money into Destiny because they had faith in Bungie whether it is a new IP or not is not relevant. Also they have been a lot of new IPs selling gangbusters. They were betting on Bungies years of experience and apparently their bet did not pay off.

At the end of the day, all that matters is, Destiny did not meet projections, any other reason is simply a gamer's excuse. This is a very binary issue for Activision: Did destiny meet expectations: Yes Or NO, there is not "but" or "because"
 

BuzzJive

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The stock price is still about double what it was before Destiny was announced - which averaged about $11-$12 a share in the 3.5 years before the reveal...

I think there's some perspective lost here.
 

Hindle

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If Activision are including subscription sales amongst the $325m revenue, then it's possible Destiny isn't at 3m copies sold yet. Let's say Destiny sold 2.5m so far and close to 1m have also signed up to the season pass, then sales could actually be a lot lower then we think.
 

test_account

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That they lost 1.5 billion sounds a bit "misleading" in my opinion because if the stock goes up again, suddently, they've "made" tons of money again (i used "made" since unless they sell the stocks, they dont technically get that money). Stocks usually fluxuate all the time. Even a few cents can lead to big money in total if there are tons of stocks.
 

Ingueferroque

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Agreed. In May 2003, a brand new IP was released by Microsoft, only on Xbox. This new IP set first day and first week sales records for the Xbox. The game was targeted to consumers as the next Halo (it even intentionally used the Halo control schemes).

The game, as everyone knows, was an abject failure. The IP went nowhere. The studio was shut down.

Now, nobody should predict the same outcome for Bungie and Destiny, but it's worth looking back and seeing the similarities, especially when it comes to those front-loaded sales numbers. Launch week sales shouldn't be used as a measurement of any title's success unless it is a low budget game which can immediately hit profitability.

I'm trying to find any still-available analyst's remarks from the 2003 title.

Anyhow, never forget.

....wow.
 

zychi

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Apr 5, 2010
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Destiny is a success sales wise.

The "loss" in stock value will change once the wow expansion and cod come out.
 

Hindle

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With regards to word of mouth, i think Destiny's lack of identity will prevent the game from having any legs in terms of sales. There is literally nothing that makes the game stand out to the Cod audience, There's still a lot of confusion amongs the mainstream:

In terms of gameplay, is it like Borderlands, Halo, Mass Effect, what's the main hook?

What's the traveller?

Who are those guys on the cover of the game?

They really made a mess out of it, and as I said earlier, I think sales are even lower then we think.
 

hodayathink

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If Activision are including subscription sales amongst the $325m revenue, then it's possible Destiny isn't at 3m copies sold yet. Let's say Destiny sold 2.5m so far and close to 1m have also signed up to the season pass, then sales could actually be a lot lower then we think.
I seriously, seriously doubt that they've sold season passes to 40% of their audience. In fact, I seriously doubt that any game has ever sold season passes to 40% of its audience.
 

mercenar1e

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I've always said that destiny won't reach expectations from both Activision and it's shareholders but you can blame that on Call of Duty.
 

Hindle

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I seriously, seriously doubt that they've sold season passes to 40% of their audience. In fact, I seriously doubt that any game has ever sold season passes to 40% of its audience.
That was just a rough estimate, although It is possible IMO. Destiny does have a sizeable following who would buy the season pass.

In any case, my point is I think Actvision are including the season pass revenue in the $325m.
 

ryan299

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Actually most sales occur within the first week from pre-orders/hype. Given the bad reviews I don't think it will sell well into the holiday season.
I agree with you. The repetitive nature and bad reviews will hurt this game. I think people will leave for COD and MCC and not look back at Destiny.

I think Bungie will need to give a lot of free dlc for this one
 

The Shogun

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If Activision are including subscription sales amongst the $325m revenue, then it's possible Destiny isn't at 3m copies sold yet. Let's say Destiny sold 2.5m so far and close to 1m have also signed up to the season pass, then sales could actually be a lot lower then we think.
Its way over that. GameStop alone in NA sold over 1 million copies of Destiny in less than 24 hours
 

kinoki

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Haven't had the time to play it so I've yet to jump into the gaming outrage du jour. However, it's not like there's a new Call of Duty and a World of Warcraft expansion coming soon. Destiny will sell great this holiday and so will its DLC.
 

geordiemp

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I agree with you. The repetitive nature and bad reviews will hurt this game. I think people will leave for COD and MCC and not look back at Destiny.

I think Bungie will need to give a lot of free dlc for this one
True, but Activision probably have a string of DLC at 15$ a pop lined up for next 2 years ....

Think they were a bit greedy....if they had say 2 more worlds, 2 more different races the game would have reviewed and sold more....

Having consumers think they had already seen 50 % of the game (Earth and Moon) in the BETA is not good for reviews....this is what hurt them.

The grindy nature would not have seemed or felt so bad in new surroundings - I found I enjoyed Venus much more than Earth.....was it because of the fresh jungle setting ?

Destiny needed a snowy setting etc to break it up...
 

AusRoachman

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I often wondered what would happen with bungie if destiny didn't succeed (still way too early to call that) , do bungie own the ip? I thought that was the main reason for the Microsoft split.

Now that Microsoft has a new halo team and bungie jumping ship to ps4 I doubt they would welcome them with open arms without requiring some kind of exclusivity.

Really hope they can turn it around as I love the gameplay and art , give me tons more content and I'll be here for the whole 10 years.
 

Principate

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I often wondered what would happen with bungie if destiny didn't succeed (still way too early to call that) , do bungie own the ip? I thought that was the main reason for the Microsoft split.

Now that Microsoft has a new halo team and bungie jumping ship to ps4 I doubt they would welcome them with open arms without requiring some kind of exclusivity.

Really hope they can turn it around as I love the gameplay and art , give me tons more content and I'll be here for the whole 10 years.
They don't own anything Kotick has said as such.
 

BuzzJive

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Because Destiny is what has impacted Activision's stock price the most in the last 3.5 years.
You're missing my point. For the 3.5 years BEFORE the Destiny reveal, it did very little - and that's counting Blizzard games and COD games. For the 1.5 years since the reveal of Destiny, the stock more than doubled in price - from about $12 to about $25. Now it's gone back down $3. Yes - $1.5 billion in lost valuation is a blow, but they're still what - $5 billion above where they were before Destiny.
 

thewhitehawk

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Analysts also devalue Apple's worth whenever a new product of theirs doesn't sell twice as much as the previous one or if they spend a couple of new years without announcing a new product category. It's nothing special, and it doesn't really impact the company's operation. A few stockholders might be a bit disappointed but if a certain stock hits an all time high it's perfectly normal for it to go down afterwards.

With that said, I'd like to leave that I know very little about the stock market other than hearsay from some people I know who happen to invest in it, but a negative rumor or piece of news is enough to send a company's stock down a pitfall before it picks up and stabilises again.
 

Orayn

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Like I said, "new IP" is a gamer excuse. It is not the excuse Activison or its investors care about. They invested a lot of money into Destiny because they had faith in Bungie whether it is a new IP or not is not relevant. Also they have been a lot of new IPs selling gangbusters. They were betting on Bungies years of experience and apparently their bet did not pay off.

At the end of the day, all that matters is, Destiny did not meet projections, any other reason is simply a gamer's excuse. This is a very binary issue for Activision: Did destiny meet expectations: Yes Or NO, there is not "but" or "because"
I don't think we're actually disagreeing here.

"New IP" isn't a valid excuse for why a game didn't meet a realistic sales projection.

It can be a valid reason for a new series selling fewer units (in terms of absolute numbers) than a well-established one.

Did Activision set a sales target that's unrealistic for any new IP to achieve? Possible. Did Activision set a perfectly reasonable target and Destiny is under-performing relative to that? Also possible.

I'm just saying that Destiny being a new IP is worth taking into consideration when talking about the series' performance in a general sense.
 

sörine

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You're missing my point. For the 3.5 years BEFORE the Destiny reveal, it did very little - and that's counting Blizzard games and COD games. For the 1.5 years since the reveal of Destiny, the stock more than doubled in price - from about $12 to about $25. Now it's gone back down $3. Yes - $1.5 billion in lost valuation is a blow, but they're still what - $5 billion above where they were before Destiny.
When did Skylanders happen?
 

-PXG-

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i'm a finance nut and i don't give a fuck about this. this is a market over reaction. Fucking full time day traders are scum of the earth...no offense to anyone who is a full time day trader. they read articles to get the gist of whether its good new or bad news, then sell or buy.
This so much. I can't say it enough.
 

JaggedSac

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



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.
Did PS4 bundles have a disc or a code. Just curious.
 
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I always wondered what might happen to Bungie if their new IP underperformed after it was announced that Activision was going to publish... sounded like a deal with the devil.
Based on prior Studios, they get to make two licenced titles (I'd say James Bond titles, but not sure Activision still have the licence) before getting shuttered.
 

BuzzJive

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sörine;130773173 said:
When did Skylanders happen?
2011 was the first release. It was a hit at the end of that year and huge in 2012. Not much stock reaction there for whatever reason. The stock price really started climbing in early 2013 - Destiny reveal time.
 

Beer Monkey

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2011 was the first release. It was a hit at the end of that year and huge in 2012. Not much stock reaction there for whatever reason. The stock price really started climbing in early 2013 - Destiny reveal time.
Oh, stop it. Really. PLEASE. Sales beat projections, business was looking great.

Here are the highlights from their quarterly report. They didn't even mention Destiny.


  • As of March 31, 2013, Blizzard Entertainment’s World of Warcraft remains the #1 subscription-based MMORPG, with 8.3 million subscribers.
  • For the first quarter, Blizzard Entertainment had two top-10 PC titles in both North America and Europe with Blizzard Entertainment’s StarCraft II: Heart of the Swarm and Diablo® III.
  • As of March 31, 2013, in North America and Europe combined, Activision Publishing was the #1 publisher overall for the quarter, including accessory packs and figures, with the #1 and #2 best-selling franchises – Skylanders and Call of Duty®.
  • In both North America and Europe, including accessory packs and figures, Activision Publishing’s Skylanders Giants™ was the #1 best-selling game overall in dollars for the first quarter of 2013.
  • For the quarter, in North America and Europe combined, Activision Publishing’s Call of Duty: Black Ops II was the #2 best-selling title in dollars.
  • During the quarter, non-GAAP digital revenues from Activision Publishing’s Call of Duty franchise increased more than 100% year over year.
  • On May 1, 2013, Activision Publishing announced that it will release its new Call of Duty game, Call of Duty: Ghosts, on November 5, 2013.
http://investor.activision.com/common/download/download.cfm?companyid=ACTI&fileid=661950&filekey=3ea10697-2721-46d6-a188-c25fea50736e&filename=ATVI Q1 2013 press release.pdf
 

BuzzJive

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Oh, stop it. Really. PLEASE. Sales beat projections, business was looking great.

Here are the highlights from their quarterly report. They didn't even mention Destiny.


  • As of March 31, 2013, Blizzard Entertainment’s World of Warcraft remains the #1 subscription-based MMORPG, with 8.3 million subscribers.
  • For the first quarter, Blizzard Entertainment had two top-10 PC titles in both North America and Europe with Blizzard Entertainment’s StarCraft II: Heart of the Swarm and Diablo® III.
  • As of March 31, 2013, in North America and Europe combined, Activision Publishing was the #1 publisher overall for the quarter, including accessory packs and figures, with the #1 and #2 best-selling franchises – Skylanders and Call of Duty®.
  • In both North America and Europe, including accessory packs and figures, Activision Publishing’s Skylanders Giants™ was the #1 best-selling game overall in dollars for the first quarter of 2013.
  • For the quarter, in North America and Europe combined, Activision Publishing’s Call of Duty: Black Ops II was the #2 best-selling title in dollars.
  • During the quarter, non-GAAP digital revenues from Activision Publishing’s Call of Duty franchise increased more than 100% year over year.
  • On May 1, 2013, Activision Publishing announced that it will release its new Call of Duty game, Call of Duty: Ghosts, on November 5, 2013.
http://investor.activision.com/common/download/download.cfm?companyid=ACTI&fileid=661950&filekey=3ea10697-2721-46d6-a188-c25fea50736e&filename=ATVI Q1 2013 press release.pdf
That release can explain the beginning of the uptick, but to completely discount any effect that Destiny had on the stock over the past 1.5 years is really pushing it.
 

Shmuely Bully

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Stock swings aren't a new thing, if it remains depressed then they should be concerned but with the herd mentality of stock traders it shouldn't surprise anyone to see price swings that large from time to time.