GamesBeat

Despite a couple of bad moves, Activision Blizzard CEO says he runs a kindly mothership for game developers

Bobby Kotick, chief executive of Activision Blizzard, runs the biggest independent video game development company in the world. Some people have taken potshots at him because he doesn’t play games and has said some things that make him seems like an abrasive numbers guy who doesn’t respect creative game developers.

In a rare talk in front of game developers at the Dice Summit in Las Vegas, Kotick acknowledged that he has made some mistakes in finding and fostering some of the most creative people in the game industry. But he defended his decisions, saying doesn’t throw shareholder money away on bad investments. And he said that Activision Blizzard has become a good “mothership” for lots of game studios that are getting the chance and the resources to do the games that they’ve always dreamed of doing. Kotick used a lot of humor in his talk, dropped the F-word a couple of times, and didn’t come across as, in his own words, “a dick.”

The talk was a kind of olive branch to game developers, as Kotick has tried a little too hard to please investors at analyst conferences. He was quoted as wanting to “take the fun out of game development” at one event. At Dice, he said he only meant to convey that there were controls in place at Activision Blizzard to ensure that investors get a good return on their investments.

“It’s not a Wild West environment with a lack of process,” he said.

Kotick says he has an obsessive personality and avoids playing games because he knows he would play them too much if he did, and that would be bad for fulfilling his duties as chief executive.

If you look at games from a business level, about 50,000 feet above the actual creative process, you get a different view of things, he said. But he acknowledged that by doing so he can lose sight of what makes games really fun and who is really passionate about making them.

With that, he ticked off examples of his mistakes. He said that he thought it was ludicrous when Davidson Associates paid $7 million to buy Blizzard in 1995 and had to eat his words when he had to pay $7 billion (in a complex transaction) to buy them in 2007.

“It was mind boggling to me,” Kotick said. “It was an outrageous amount of money at the time.”

He also regretted how Activision Blizzard bought Red Octane, the maker of the Guitar Hero guitars, without also acquiring the game’s developer, Harmonix. MTV later bought Harmonix and, with Electronic Arts, challenged Guitar Hero with Rock Band.

“We never thought of going to Harmonix,” Kotick said.

Alex Rigopoulos, co-founder of Harmonix, sat in the audience listening to Kotick. When he heard that, he raised his eyebrows.

Kotick said that he reviewed the business of Maxis, maker of SimCity, years ago and decided to pass on it. He neglected to see a demo from Maxis co-founder Will Wright, who was passionate about a project code-named Jefferson. That game went on to become The Sims, a game franchise that has generated more than $2.5 billion in sales in the past decade for the Maxis buyer, Electronic Arts.

Kotick noted how it was a good thing that his company invested in developers who were leaving his company — and went on to form Jamdat and Pandemic — which were ultimately sold for a lot of money. This was a smart move because the employees were going to leave anyway. It was at least good that Activision Blizzard made a lot of money from the investments.

In most cases, Kotick said that it made sense that his company didn’t overpay for acquisitions. In the case of Blizzard, he said, it was probably a good thing to wait a long time because Activision really had to learn how to be respectful of the studios it owned, give them their resources, and stand back and let them run their own shops. But once Activision Blizzard learned how to run a mothership with lots of small studio satellites, the time had come to bring Blizzard into the fold. Now the mothership can let Blizzard retain its own culture, Kotick said.

If game developers want to get resources and support to make their huge games, they should come to Activision Blizzard, he said. During the talk, Kotick insisted that his company is respectful of creative talent and it appreciates what the studios — where many founders remain — had done for the mothership. But he added, “If you want to sell out and move on, there are a lot of other companies to go to.”

He added, “Some ego is healthy, but outsized egos should be checked at the door. As Hillary Clinton says, it takes a village to make a game. If you think you can do it all by yourself, you’re probably the village idiot.”

Kotick bemoaned the high budgets of console games and said, “Our industry has lost its way a bit.” But he said it was healthy that there are markets such as social games and iPhone games where developers with cool ideas can get their games to market without a ton of capital.

[Photo courtesy of Elisabeth Caren].

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