Today, during Activision Blizzard’s financial conference call for investors and analysts, the Chief Operative Officer Coddy Johnson explained the rationale behind the decision to part ways with Bungie and the Destiny franchise.
Johnson mentioned that Activision is confident that it was the right decision for both parties.
“Bungie gets to focus on the IP that they created, and we get to focus on our biggest opportunities and on our biggest franchises with our best resources.”
He also added that the decision was rooted in Activision’s overall strategy.
“First, as you know, we didn’t own the underlining Destinty IP. We do for all our featire franchises. I think that’s a differentiator for us.
Also, controlling the undelining IP gives us the chance to move in with new experiences and engagement models, which also come with new revenue streams, and of course structurally higher economics.”
Speaking of economics, that also played a role.
“Destiny is highly critically acclaimed and high-quality content, but it was not meeting our financial expectations.
As we went through the end of the year and our financial planning for 2019, it indicated that Destiny would not have been a material contributor to operating income to our business.”.
On top of that, Johnson explained that the resources used to support Bungie can now
“Third, we had internal resurces supplmenting Bungie’s work, and that means that they’re tying up one of our scarcest resources, which is development time, which now will be freed up after a short transition period.”
Lastly, he stressed that the decision to part ways was “a mutual, amicable agreement,” and it’s the “right path forward” for both parties.
If you want to read more about Activision’s financial performance and on the plans to restructure its production pipeline, you can check out our dedicated article.