Activision Worried over Next Gen Development Cost, Game Prices
The company relies on Call of Duty and Skylanders for revenue
Video game publisher Activision, the creator of Call of Duty and Skylanders, says that its future performance might be affected by increased prices for retail titles, the development costs associated with next-gen consoles and a shifting business landscape.VG247 is quoting a Securities and Exchange Commission document that reads: “If we are unable to sustain premium pricing on current-generation titles, our operating results will suffer.”
It says that “competitive pressure, because retailers elect to price these products at a lower price or otherwise” could make Activision “experience a negative effect on our margins and operating results.”
The company does not have a clear evaluation of how big the overall impact might be.
There are also worries about the creation of entirely new business models and how they might challenge the company’s financial position.
Activision Blizzard is one of the biggest video game companies in the world, creating no less than 4.86 billion dollars (3.69 billion Euro) in revenue during 2012 and it is seeking to improve on that sum for the current fiscal year.
The company was present at the PlayStation 4 reveal event in New York, announcing that Bungie’s Destiny would be launched on the new Sony home console and that it would come complete with exclusive downloadable content.
At the moment, the biggest revenue generator for Activision is the Call of Duty series, which is expected to get a new installment during the fall, presumably created by Infinity Ward and labeled Modern Warfare.
The company has also managed to deliver a hit with Skylanders, the franchise that combines real-world toys and virtual experiences.
Recently, Activision has fired a small number of employees at its international divisions and has suggested that during the coming years, it will launch a smaller number of titles based on licensed properties, like James Bond.