Activision Blizzard 2019

Abstract

In February 2018, video game industry veteran Activision Blizzard announced that despite new revenue record year of US$7.26 billion it would lay-off about 800 employees in order to add on their development capacities [1]. Created through the merge of Activision Holdings and Vivendi Games in 2008, the company’s roots dated back to the golden age of video games when four developers decided to leave industry leader Atari to create the first independent third-party publisher, Activision. In 1987, young entrepreneur Robert A. Kotick bought the company that had filled bankruptcy after a severe backlash from the 1983 video game market crash and mismanagement practices. The company flourished again under his direction and became the largest pure-play and online publisher after merging with Vivendi Games. Having become the investors’ darling, the new CEO spearheaded many acquisitions entering the e-sports, mobile gaming and the motion picture markets. The aggressive expansion strategy eventually came to an end in October 2018 when Activision Blizzard’s stock price fell by 28% after the release of its third-quarter earnings. Not only had the last title of its top franchise Call of Duty sold less than the market had expected but the constant erosion of Activision Blizzard games’ monthly active users made investors worry. It seemed to the industry that in its frenetic expansionism the publisher had lost sight of its core business and with it, its customers. Being closer to a financial organization than the creative studio it used to be in the past, many wondered how Kotick would turnaround Activision Blizzard to catch up with the high-paced video game market.

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