Posted by: Matt Vella on April 17
This month’s issue of Portfolio has a nice question-and-answer with Activision (ATVI) CEO Bobby Kotick. The piece, written by Kevin Maney, goes over the basics of how Kotick got into the games business, the rise of Guitar Hero, and his relationship with his business mentor Steve Wynn. All eyes are on Activision as it embarks on a nearly $19 billion merger with Vivendi’s (VIV.D) World of Warcraft-owning games division. Expectedly, everybody is wondering how the proposed take-over of Grand Theft Auto maker Take-Two Interactive (TTWO) by Electronic Arts (ERTS) might affect the competitive landscape.
Two questions in particular stood out to me. Firstly this bit about how Guitar Hero may be changing peoples’ experience of music:
Guitar Hero is huge—with more than $1 billion in sales since it was introduced in 2005. Essentially, it lets people play along on a fake guitar to real songs. Given that the Universal Music Group is part of Vivendi, will any special emphasis be given to its songs and artists?
One of the big benefits will be access to the Universal library. Guitar Hero takes an artist to a whole different place in the popular culture right now. Downloads on iTunes take off. The artist’s relevance and importance to 17-year-olds change in a way that you could never get in any other medium. Forty percent of its users are women. The age appeal is something we’ve never seen before—seven-year-olds who have no idea who Aerosmith is are playing the band’s music on Guitar Hero. So are 45-year-olds who spent a good portion of their lives following the band around.
And, this bit about what – on Kotick’s estimation – separates Activision from EA.
Is there a key to Activision’s growth?
It’s about really being considerate of the culture in the game studios that Activision buys. That’s the biggest difference between us and any of our competitors. We built a model that celebrates entrepreneurial, opportunistic, independent values. It’s almost the opposite of Electronic Arts, which has commoditized development. It did a very good job of taking the soul out of a lot of the studios it acquired.
It’s worth a read, and a nice spread in print to boot.
No longer child's play, the booming global games market is worth billions of dollars. In Games, Inc., BusinessWeek Innovation writer Matt Vella and Tokyo correspondent Kenji Hall analyze emerging business trends in video games and interactive entertainment. They’ll examine everything from button-mashing, chart-topping, console games to serious games commissioned by big corporations to train staff. They’ll also map the evolution of expansive virtual worlds and go behind the strategies at companies that are turning play into big business.