On Bungie, Activision, and Speculation

by Darius Kazemi on April 29, 2010

in business

To everyone who is trying to draw a connection between the Infinity Ward mess and the announcement of Bungie’s 10-year exclusive publishing deal with Activision: you don’t know what you’re talking about.

First of all, we don’t know anything about the deal. Here’s what we do know: Bungie has a new IP, and Activision has dibs on that IP for 10 years. Bungie retains IP ownership. But that doesn’t even really matter. What matters here is the pace of business.

It takes me about six months to a year to secure a $150k deal for my company. We don’t know how much money is involved in the Bungie deal, but certainly the long-term publishing rights to a new Bungie IP are worth many millions of dollars, if not upfront then at least on the back-end of the deal. This is not the kind of deal that happens overnight, or even for over the course of a few months. ┬áDeals like this one take years to negotiate.

As a friend put it, Kotick didn’t just call up Bungie after IW employees started leaving and say, “Hey guys, we’re missing a premier FPS studio in our portfolio. Would you like to partner with us for ten years? You would? Great, let’s get that paperwork going.” That would be absurd.

Moral of the story: never assume that business decisions are made overnight. There’s no way this deal is related to IW in any way.

{ 8 comments }

Michel April 29, 2010 at 1:42 pm

The only crazy link I could see is knowledge of an imminent (or already signed) Bungie deal influenced how Activision handled West and Zampella. Would they have been fired if Activision wasn’t getting Bungie?

Darius Kazemi April 29, 2010 at 2:02 pm

CoD/IW are a cash cow for Activision. Activision is smart enough to know that firing the IW heads would cost them a shitload of money in the short term (restaffing) and in the long term (possible damage to the franchise). Believe me, Activision would much rather have an IW-led CoD6 AND a new Bungie IP on their hands than whatever it is they have now.

Matthew Weigel April 29, 2010 at 5:00 pm

I was just reading that the Halo franchise has made $1.5B in revenue since Halo first launched. Modern Warfare 2, all by itself, hit $1B in revenue two months after launch. I’m sure Activision intends to more fully exploit Bungie’s next IP than Microsoft did (for one thing, hitting more platforms more quickly than Microsoft let Bungie), but those kinds of numbers don’t really support ditching IW in favor of Bungie.

Also, Darius: ‘The deal, termed an “alliance” by both Bungie and Activision executives, took nearly a year to lock down, Tipple said.’ -http://kotaku.com/5527137/bungies-first-post+halo-game-coming-to-all-platforms

Just the same, this comic is funny… http://www.cad-comic.com/sillies/20100429/

(I’m not sure if I can embed HTML, so I’m just leaving raw links, sorry)

Dan April 29, 2010 at 1:46 pm

Not directly related. Say West and Zampella catch wind of the deal that Bungie is working out with Activision. Or better yet, they look at what Bungie was able to do with Microsoft. They think that this arrangement would be great for Infinity Ward and proceed to try to work with Activision toward that goal. After a lot of back and forth over several months, West and Zampella are dismissed for insubordination.

The timing of this announcement is suspect. Infinity Ward is bleeding talent and Activision is being raked over the public opinion coals. What better way to improve the image of the company and appease shareholders by announcing this partnership with Bungie.

Darius Kazemi April 29, 2010 at 1:59 pm

It’s possible that the press release was timed in relation to IW stuff. But the actual deal? No way in hell. If IW was trying for a Bungie-style buyback, that would still be independent from any ATVI/Bungie deals.

Dan April 29, 2010 at 2:06 pm

Current events aside, are these kinds of partnerships the best way to go for developers? Will we see more proven developers own their IP and negotiate the publishing of their titles?

Darius Kazemi April 29, 2010 at 2:14 pm

The best kind of deal is one where the developer owns the IP, absolutely. That’s where the real money is. Sure, Halo makes X amount of money. But look at all those crazy deals with soft drink companies and movie studios and whatever else. The person who controls the IP controls the long-term profitability. From the details that have been made public so far, it looks like Bungie was negotiating from the power position here. And rightly so!

Nicholas Brown April 30, 2010 at 12:09 am

More than that the person that controls the IP can avoid bad versions of those types of connections. It also makes it easier for the developers to tell a coherent story that’s believable and fun. Nothing ruins a hard-core fan’s day faster than a glaring continuity error.

Personally I’m happy to hear that the people of IW are sticking together as a studio and I’m happy to hear that Bungie and Activision are working together on a new IP.

Comments on this entry are closed.

Previous post:

Next post: