Student Name: Kyle Thompson Date: 12/10/2011
SWOT Analysis for: Activision – Blizzard Games
Supporting Facts and Figures:
Within the 11.5 million subscribers worldwide segmentation is shown with demographic, economic, sociographic, and psychographic charts based on usage. 48% of subscribers are from Asia, 22% North America, 17% Europe, and 13% Other continents (Cavale, 2010). For the three months ending March 2010, Activision-Blizzard had revenues of $1.308 billion up from $981 million in the previous March quarter. Net income (profit) reached $381 million for the March 2010 quarter - up from $189 million in the previous March quarter (Mazel, 2010).
Stock information of Activision-Blizzard Games and the cost-basis calculator of original share price from 10/22/1993 to the present. $999.99 invested on 10/22/93 would be valued at 11,197.54 today (Activision-Blizzard Investor Relations, 2011)
World of Warcraft dominates the massively multiplayer online role playing (MMORPG) market with a 62% market share with Lineage I & 2 accounting for 12.9%, Runescape 7.5%, Final Fantasy XI 3.1% (Cavale, 2010).
A total of 600,000 subscribers have been lost since the latest games release of Dec 7 2010 (Wolfshead, 2011).
With the PS3 not lowering its systems retail price, Activision-Blizzard CEO Bobby Kotick is complaining about the costs to design new products on the system (Crossley, 2009).
Approach to new products with a conservative design and playing it safe kind of mind set with minimal upgrades and only extended content (Watters, 2011).
World of Warcraft is releasing its Cataclysm game to the Brazilian market 12/6/11 (Blizzard Press Release, 2011). 5TH highest number of Internet users by countries in the world (Internet World Stats, 2011).
Could Sam Raimi be the director to finally film the upcoming World of Warcraft movie with a projected budget of $100 million dollars (Tanner, 2007).
Will the in-game advertising hitting $77.7 million dollars in 2006 could 2011’s expected $971 million come close to 1 Billion dollars and help push games into a greater variety of opportunities (Yankee Group, 2011).
With 22.7% of the population engaging in social network activities, will online games be able to cut into that top market with their second place of 10.2% (Nielsen Wire, 2011).
With Blizzard’s games being released every few years, the consumer is tired of waiting for new products and same old stories. Blizzard plans on releasing two separate titles for the upcoming year, a first in their history (Cifaldi, 2011).
Number of application available for download- The Apple Store 333,214; Android Market 206,143; Blackberry 26,771 (Wong, 2011).
Conclusions:
Having the financial backing of such a large parent company in Activision, Blizzard has a strong future ahead of them. Already working within a niche market of MMORPG games, Blizzard has the opportunity to continue their dominance of that market and use it to an advantage in expanding their brand name. Blizzard does not need to diversify its games as they have proved doing one market extreme well works better than doing water downed products spread out over several genres. Looking ahead Blizzard needs to build upon their global market and reach the global consumer. With the release of their Brazilian-Portuguese language game, Blizzard is starting to see what the potential global market has for them.
As trends continue to change from one means to another, Blizzard has to re-invent itself in the way it makes games. Being labeled as a “perfectionist”, Blizzard needs to find a better way of giving the consumer what is wants and not having to sacrifice the content of its game with a speedier turnaround on games release. The development process on phone application games and consoles are being released from all across the gaming genre within days and months compared to the yearly and bi-yearly production schedule at Blizzard.
Knowing that the video game market is only going to get stronger with technology advancements, Blizzard needs to be aware of this and plan accordingly. A possible merger with a few other companies like Square-Enix (Final Fantasy), Mystic Entertainment (Warhammer) and Perfect World (Lineage) would help the global growth of Blizzard. Having online revenue exceed retail game sales is helping Blizzard cut expenses and production costs. Having fewer employees on the retail side of things has enabled Blizzard to shift those workers to their Battle.net server for less load times and delays and better online gaming product for the consumer.
In their mission statement Blizzard’s eight core values state “gameplay first, commit to quality, play nice play fair, embrace your inner geek, every voice matters, think globally, lead responsibly, learn and grow” these values showcase their desire to be the best and listen to the consumer.
References:
Activision-Blizzard Investor Relations. Stock Information and Cost-Basis Calculator. Online Posting. 9 Dec 2011. investor.activision.com. 10 Dec 2011. http://investor.activision.com/calculator.cfm?PostBack=1&initialAmnt=1000.00&calc_method=amnt&historic_Month=10&historic_Day=22&historic_Year=1993&Submit=Calculate&ReinvestDividends=1
Blizzard Press Release. “World of Warcraft to Launch in Brazil December 6 2011.” Online Press Release Posting. 8 Nov 2011. us.blizzard.com. 10 Dec 2011. http://us.blizzard.com/en-us/company/press/pressreleases.html?id=3914935
Cavale, Jude. “World of Warcraft Statistics Made Easy for You!” Online posting. 17 March 2010. Walyou. 10 Dec 2011. http://walyou.com/world-of-warcraft-statistics/
Cifaldi, Frank. “Blizzard Speeds Up WoW Development to Address Subscriber Churn.” Online posting. 9 May 2011. Gamasutra. 10 Dec 2011. http://www.gamasutra.com/view/news/34569/Blizzard_Speeds_Up_WoW_Development_To_Address_Subscriber_Churn.php
Crossley, Rob. Kotick slams PS3 for ‘high’ dev costs. Online posting. 19 June 2009. Develop. 10 Dec 2011. http://www.develop-online.net/news/32222/Kotick-slams-PS3-for-high-dev-costs
Internet Word Stats. “Top 20 Countries with the highest number of Internet users.” Online posting. 7 Aug 2011. Internetworldstats. 10 Dec 2011. http://www.internetworldstats.com/top20.htm
Mazel, Jacob. Activision-Blizzard Q1 2010 Overview. Online Posting. 6 May 2010. Vgchartz. 10 Dec 2011. http://www.vgchartz.com/article/79952/activision-blizzard-profits-381m-in-q1-2010/
Nielson Wire. “What Americans Do Online: Social Media And Games Dominate Activity.” Online posting. 2 Aug 2010. Nielsenwire. 10 Dec 2011. http://blog.nielsen.com/nielsenwire/online_mobile/what-americans-do-online-social-media-and-games-dominate-activity/
Tanner, Todd. “World of Warcraft- The Movie; $100M Budget, and more info.” Online posting. 7 Aug 2007. Neowin.net. 10 Dec 2011. http://www.neowin.net/news/world-of-warcraft---the-movie-100m-budget-and-more-info
Watters, Chris. “Gut Reactions: Blizzard Breakdown.” Online posting. 16 July 2008. Gamespot. 10 Dec 2011. http://www.gamespot.com/features/gut-reactions-blizzard-breakdown-6193315/
Wolfshead. “Reflections on Blizzard Losing 600,000 WoW Subscribers.” Online posting. 18 May 2011. Wolfsheadonline. 10 Dec 2011. http://www.wolfsheadonline.com/reflections-on-blizzard-losing-600000-wow-subscribers/#28e71
Wong, George. “The success of mobile gaming detailed in an inforgraphic.” Online posting. Ubergizmo. 10 Dec 2011. http://www.ubergizmo.com/2011/07/success-mobile-gaming-infographic/
Yankee Group. “In-Game Advertising Revenue to Reach $977 MM by 2011.” Online posting. 23 July 2007. Marketingvox. 10 Dec 2011. http://www.marketingvox.com/in-game-advertising-revenue-to-reach-971mm-by-2011-031632/
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