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Activision’s half a billion dollar Destiny gamble

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Whether you’re interested in the game or not, Destiny is starting to make a lot of noise. It’s Bungie’s first game since being freed from Microsoft’s Halo shackles and adds a number of MMO elements to the online co-op shooter. It’s a bit like Halo and Borderlands had an MMO-tainted baby.  Activision’s taking a gamble by footing the bill. It’s a pretty big bill.

Activision-Blizzard boss Bobby Kotick revealed that his company will be spending half a billion dollars making and then marketing Bungie’s Destiny. That includes “marketing, packaging, infrastructure support, royalties and other costs,” but it’s s till a ludicrous number – and it would make Destiny the single most expensive video game ever produced.

It’s a huge gamble, as while Bungie knows what they’re doing, the game is entirely unproven, and spending this sort of money on a brand new IP is unheard of. To break even, Activision would have to sell about 15 million to 16 million copies of the game, which is rather unlikely – but not impossible. Grand Theft Auto V has sold over 32 million copies to date. that game however, is part of an established franchise.

And that’s likely what Activision is gambling on. They’ve signed a 10 year publishing deal with Bungie, and they’re banking on Destiny becoming the next big thing, perhaps even usurping Call of Duty.  they may not make their money back with this first game, but they’re hedging their bets that can establish Destiny as another of the company’s key pillars.

“If you’re making a $500 million bet you can’t take that chance with someone else’s IP,” Activision CEO Bobby Kotick told the Milken conference. “The stakes for us are getting bigger.”

Honestly, I’m glad to see the company investing in new titles and not just relying on Call of Duty (and now Skylanders!) to bring in the big bucks. Activision’s switched focus of late from publishing tons of licenced fodder to just a few key titles, and it very much hopes Destiny will be the next big one.

For reference, half a billion US dollars is around 5 261 350 000 South African Rands. That’s enough to buy 228 754 347 Big Macs, 21 and a half Nkandlas, 8 333 333 copies of Grand theft Auto V at full retail price.

Last Updated: May 6, 2014

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