Activision Will Focus on Online Business and Margin Growth

Bobby Kotick, the Chief Executive Officer at publisher Activision Blizzard, has stated that his company will not focus on increasing revenue in the coming years but on developing business models that have higher profit margins that simply selling packaged video games at retail.

The statements coming from the CEO of one of the biggest video game companies in the world might mean that players will soon have to directly pay for some features and services that they have so far taken for granted.

Kotick has previously talked about creating a MMO based on the Call of Duty franchise, which would allow the publisher to get a 15 dollars monthly subscription from gamers instead of getting a one time 60 dollar fee for a boxed copy (with some of the money going to other entities).

Talking at the business oriented Bank of America Merrill Lynch's Media, Communications & Entertainment Conference Kotick has said, “Being the world's largest online entertainment company, the focus of the company has always been on return on invested capital and improving profit. The revenue growth is much less significant to us.”

He added, “We're better focused on figuring out how to expand the operating profit right now than chasing the revenue growth that's only going to contribute 20 percent operating margins. But the business over the next five to ten years will continue to grow.”

Still Kotick was sure to tell the audience that Activision is not creating any product thinking only about the money it can squeeze out of gamers when it launches.

The big growth segment of the video game world is the free to play, micro transaction powered online game, presumably played on Facebook, and Activision is widely expected to launch something in this area.

Rival Electronic Arts has already acquired developer Playfish, the second biggest player on the market, and is exploring free to play models for FIFA and for Need for Speed.