Activision becoming overly reliant on successful franchises

Activision is one of the biggest and richest videogame developers in the world. Its merger with Blizzard Entertainment has generated an incredible amount of revenue from World of Warcraft subscriptions, in addition to Activision’s own Modern Warfare titles. Activision announced it had sold over 20 million Call of Duty map packs to date. Considering each map pack costs between $10 and $15, Activision has earned at least $200 million from map packs alone. When you add revenue from millions of copies of Modern Warfare 2, you’ll see that Activision needs its own vault to store all its money.

However Activision’s success with its biggest money makers could be its downfall. Michael Pachter of Wedbush Securities points out the mediocre success of Activision’s games such as Blur, Shrek Ever After and Singularity as evidence of the companies growing dependence on a couple intellectual properties.

“We fear that after so many years of near-flawless execution, Activision has begun to slip a bit, perhaps in the process becoming overly reliant on the parts of the business that are phenomenally successful,” said Pachter.

Part of Pachter’s concerns are caused by the delay of some of Activision’s games. He points out that Blur and Singularity were delayed to give the developers more time to polish the games. The two games suffered from lower than expected sales when they were released. He feels the same thing will happen with the recently delayed True Crime: Hong Kong.

Call of Duty: Black Ops is set to be released on November 9, 2010. While Wedbush feels Black Ops will sell exceptionally well, it doesn’t believe it will mirror the success of Modern Warfare 2. They aren’t questioning the quality of Black Ops, but rather looking at competition the game faces from Halo: Reach and Medal of Honor. Wedbush estimates Black Ops, Halo: Reach and Medal of Honor will sell between 25 to 35 percent more copies than Modern Warfare 2, totaling in approximately 25 million games sold this holiday season. Black Ops will have to sale significantly more units faced with this competition to upstage the success of Modern Warfare 2.

Read [Industry Gamers]