Not owning Destiny IP limited how much money we could make, says Activision Blizzard

Not owning Destiny IP limited how much money we could make, says Activision Blizzard

Publishing giant Activision Blizzard has told its side of the story about its breakup with Destiny developer Bungie.

Speaking to investors - as transcribed by Seeking Alpha - the company was asked to tell a bit more about why the two games firms decided to part ways.

COO Collister Johnson said that it was a mix of factors; Activision Blizzard didn't own the IP which he says limited how much money the publisher could make from the franchise.

This is likely one of the reasons that Johnson said during the company's last financial call that Destiny just wasn't meeting its fiscal expectations.

In addition, Johnson says that Activision was expending development resource on the sci-fi MMO - likely a reference to the fact that Vicarious Visions helped out on the PC edition of Destiny 2, while High Moon Studios has been providing support for the game's DLC.

"Let me say first that we're confident that this was the right decision for both parties," Johnson said.

"Bungie gets to focus on the IP they created and we get to focus on our biggest opportunities on our biggest franchises with our best resources. Our decision was reach the mutual agreement with Bungie to sell back the commercial rights. And for us, at least, it was rooted really in our strategy overall. First, as you know, we didn't own the underlying Destiny IP and we do for all our other major franchises, which we think is not just a differentiator for us in the industry, but also controlling the underlying IP gives us the chance to move with new experiences and new engagement models which also come with new revenue streams and of course structurally higher economics when you own the IP.

"And that leaves to probably the second factor in our decision process, which is Destiny, it is highly critically acclaimed, high-quality content, but it was not meeting our financial expectations. As we went through at the end of the year our financial planning for 2019, it indicated that Destiny would not have been a material contributor in operating income to our business.

"And third, we had internal resources supplementing Bungie's work, and that means they're tying up one of our scarcest resources, which is developer time, which now under the arrangement we have reached, will be freed up after short transition period. So late last year when we're exploring all our options on Destiny, in November after earnings release we learned that Bungie was willing to acquire our rights and we engage discussions with them and ultimately wound up consummating the deal in late December, and it was a mutual amicable agreement. And I just emphasise I really do think for both parties this is the right path forward and it allows us to go implement the plan that we talked about today."

This comes as Activision Blizzard announces a record year while also making an eight per cent cut to its workforce. The company says that it is - on average - increasing its development headcount by 20 per cent. 

PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for, VGC, Games London, The Observer/Guardian and Esquire UK.