Even before I came to blog about the inner workings of Activision, I had seen the same negative comments made about the company over and over again. Whenever someone wants to slam Activision lately, they often turn to the same phrases, the same offenses, and — let’s be completely honest — the same handful of controversial public comments made by the guy in charge.
I actually don’t think that people truly hate Activision as a company or even its individual development studios; I think they just disagree with any number of the company’s business decisions, and that manifests as bitter, often irrational, comments about Bobby Kotick. And gamers really love to focus on him because of…Those Infamous Comments.
When I saw how frequently these comments were brought up, I decided to put my journalistic hat back on and investigate them. I mean, saying you want to take all the fun out of gaming…that can’t be real, can it? Sure enough, when I looked at the original statements in their original context, I found that many people are citing Those Infamous Comments incorrectly, reinforcing factual errors and misinterpretations — maybe accidentally, maybe willfully.
I think that Those Infamous Comments have become entrenched simply because nobody has stopped to consider that there might be more to the story than those soundbites suggest. But now that I’ve done some research, I’d like you to look at them again. Be warned that what follows is very dense — it’s not casual reading and there are no pictures to jazz it up. It’s just analysis.
But I would like to lay Those Infamous Comments to rest once and for all.
Belief: Bobby Kotick wants to “take the fun out of making videogames.” He cultivates a culture of “skepticism, pessimism, and fear,” and wants to keep his employees “focused on the deep depression.”
Source: Comments made at the Deutsche Bank Securities Technology Conference, September, 2009
Truth: As soon as I heard this quote when I was at OXM, I knew (and said at the time) that what was being reported, while likely word-for-word accurate, was not the full information or spirit of the quote. So I went digging and found the full, correct meaning.
You have to start with a look at exactly what was said in full and in its conversational context, which was transcribed from the audio recording and posted by Gamespot:
Jeetil Patel, Deutsche Bank Securities – Analyst
“What do you think the retailers’ willingness these days is to hold inventory on the video game side? Are they building positions today or are they still very reluctant and very careful of how they are buying?”Bobby Kotick, Activision Blizzard, Inc.
“I don’t think it is specific to video games. I think that if you look at how much volatility there is in the economy and, dependent upon your view about macroeconomic picture and I think we have a real culture of thrift. And I think the goal that I had in bringing a lot of the packaged goods folks that we brought in to Activision 10 years ago was to take all the fun out of making video games.”“I think we definitely have been able to instill the culture, the skepticism and pessimism and fear that you should have in an economy like we are in today. And so, while generally people talk about the recession, we are pretty good at keeping people focused on the deep depression.”
Looking at the original statement in full (not to mention the question that spurred it), it’s clear that all the key terms that people have since cited — “focused on the deep depression,” “skepticism, pessimism, and fear” — are not in relation to human effort, but are all related to the financial aspects of running a big business. That depression is economic, as in 1929 stock market crash; please note that it’s preceded by a comment about the recession, which was the hottest financial topic of 2009, and he is talking to a room full of financial professionals. He’s not talking about depriving someone of happiness or breaking someone’s creative spirit, which is how a lot of gamers took it.
As for “taking the fun out of games,” it sounds to me like a joke that flopped. What’s more, I found it’s a joke he has told before — as early as 2004 to the Hollywood Reporter, where it was not misinterpreted — but it clearly wasn’t so funny this time. A better way to put it would have been to take the financial irresponsibility out of publishing videogames. It helps to know the history here: Gaming is littered with companies that reached too far, got too risky, and in some cases, just thought the business of fun was more fun than business actually is. As gaming has evolved, many publishers have gone out of business despite many hit games — even pioneering ones. No CEO wants that fate for their company.
As Bobby Kotick discussed in his Game Informer interview in the February 2010 issue (couldn’t find this available online, sorry — it pays to subscribe!), when he invested in Activision in 1990, the company was in dire straits. The fiscal term is “insolvent” — severe, company-ending debt. The glory days of the 2600 were gone; the company was trying to do business software under the name Mediagenic and was not doing it well. Bobby loved games and wanted to spend his time working with something he loved. He turned the company around and built it into a success through disciplined business practices. If you want to succeed on the level Activision has reached, there’s no guesswork, no “close enough,” no “whatever happens happens.” There’s a lot of people around the world looking forward to playing these games — so get serious! In other words…take the fun out of making games.
A lot of people took this quote to mean “I don’t want Activision’s developers to enjoy making games” or even “I don’t want the games Activision makes to be fun.” But when you consider the original context, that’s clearly not true. I will agree it was not the best choice of words, and if it’s taken at face value, I would see why people would be upset. But at the 2010 DICE conference, Bobby admitted that it was a stab at humor to a serious crowd of bankers, and the joke failed.
“When I said ‘I want to take all the fun out of video games,’ I was talking to investors. And what I meant was that our development isn’t some disorganized Wild West mess.”
It may be unfunny, but it’s definitely not the negative worldview people have made it out to be. He was speaking financially; gamers were listening emotionally. That’s the disconnect.
Belief: Bobby Kotick doesn’t play games.
Source: “In an industry full of passionate gamers, Kotick stood apart: the guy who never picked up a joystick. (He vaguely recalls enjoying the arcade hit Defender as a teenager. In college he abandoned playing videogames for good.) Still, despite his personal dislike for using his own product, he was determined to make his mark by catering to the needs of deeply passionate game designers.” – Forbes Magazine, February 2009
Truth: As inaccurate statements go, this is a whopper. This is based on a kernel of truth, but it’s not accurate to say he plays no games, and it’s flat out false to say he dislikes them.
In the past, Bobby has talked about playing Guitar Hero with his family, and he does dabble in Call of Duty, but he was actually a hardcore gamer back in the arcade and early PC days (not something he “vaguely recalls”). However, he was so into gaming that he had trouble doing anything else. As he got older he got more responsibilities (like, you know, running Activision) and that left less time to game, or at least less time to game responsibly. What’s more, he identified that he had an addictive personality and had to put a limit on his playing, which he mentioned at this year’s DICE keynote. Again, it’s best to go right to the direct quote:
I play from time to time, but the nature of my personality is such that if I was regularly playing Modern Warfare 2, I would not be able to stop it. It would be at the expense at all my regular responsibilities.
You can also hear this quote for yourself if you watch the keynote video, courtesy of G4TV.
So. Bobby Kotick does not play with the same intensity or volume that you or I do, but that doesn’t mean he plays no games. Think of this as a guy who owns a Ferrari dealership but has lost his license due to speeding tickets; he loves being surrounded by the cars even if he doesn’t get behind the wheel. And as for a “dislike of his own products”? The only person saying that is the author of the Forbes piece; you will note there is no Kotick quote to this effect in the story.
Belief: Bobby Kotick wants to raise game prices.
Source: “You know, if it was left to me, I would raise the prices even further.” — Activision second-quarter earnings conference call in August 2009
Truth: Bobby was adding a self-deprecating joke to a straight answer by then-CEO Mike Griffith, who answered a financial question from analyst Tony Gikas. It was a one-liner at his own expense.
Here’s the transcript of the original exchange, available from investment website SeekingAlpha:
Tony Gikas:
“[...] And a second question, if you don’t mind, just your comfort level regarding pricing of some of your new games that have some expensive controllers and any feedback that you had from retail as we move through the holidays. Thanks, guys.”Mike Griffith:
“[...] On the pricing, we’ve had for all of our launch titles in the back half of this year, some of which contain peripherals, as you point out, very strong retailer acceptance and support for all parts of our plan, including our merchandising plans, our marketing programs, and our price points.”Bobby Kotick:
“And Tony, you know if it was left to me, I would raise the prices even further.”
What you do not get from the transcript is that it was said with a laugh, which then elicited other laughs from other people on the phone call. I would have thought that would have explained it away for critics. The laugh was noted by a few websites including VG247 and the now-extinct EndSights. He was poking fun at his own image…but it would appear few people noticed, or they didn’t find a joke like that funny during a recession (which is understandable), or maybe they didn’t want to believe that he could have a sense of humor about himself. It’s like me saying I’m waiting for my Pulitzer, or Al Gore saying “Hello, my name is Al Gore, and I used to be the next president of the United States” at the start of An Inconvenient Truth. It’s self-deprecation…plus misinterpretation.
Belief: Bobby Kotick doesn’t want to publish any games he can’t “exploit.”
Source:Activision earnings conference call, November 05, 2008 — specifically, the Q&A section with investors and analysts
Truth: Similar to the earlier example of taking financial terms in an emotional context, this one was boiled down to one charged word — “exploit” — and made it sound much worse than it was on the call. The topic of discussion was the recent merge with Vivendi Universal — specifically how the games already in development at the other company would be handled under the new umbrella. Here’s the exchange from the transcript, once again courtesy of SeekingAlpha:
Jeetil Patel – Deutsche Bank
“[...] Why are you de-emphasizing some of the kind of lesser known brands and focusing on the bigger franchises out there? Is it industry that is causing that or do you think it is more strategy on your part that seems to be [winning] big? I kind of want to understand the dynamics there.”
Robert A. Kotick
“With respect to the franchises that don’t have the potential to be exploited every year across every platform with clear sequel potential that can meet our objectives of over time becoming $100 million plus franchises, that’s a strategy that has worked very well for us. It’s something that we have been very disciplined about and so while there are lots of promises for a lot of these products that we had in the portfolio, I think generally our strategy has been to focus, especially given the increase in development expenditures on the products that have those attributes and characteristics that we know if we release today, we’ll be working on 10 years from now. And that has been — you know, narrow and deep has been essential to our strategy of how you expand operating margins. The difficulty in establishing new franchises or unproven franchises as we have seen over the last 20 years, that is one of the great challenges of the business and I think that you have a less than accepting and tolerant retail environment.
A little earlier in that transcript, speaking on the same subject on the same call, Bobby told Tony Gikas:
“There were a lot of different projects and businesses that we identified as not likely to achieve the profit margin potential that we look for. Most of those products had found homes at other places and are probably more appropriate strategically for other publishers.”
Focusing on big games made for large audiences is a business approach you either agree or disagree with — I’ll respect either outlook — but I don’t feel there’s compelling evidence to suggest this statement was made with or reflects an evil intent. Activision is hardly unique by saying “we want to keep focusing on what works best for our business.” Every company, from restaurants with signature dishes to Honda’s ubiquitous Civic, wants their success today to continue and grow tomorrow. And “exploit” in a business context means exactly that: Let’s keep this good thing going. I found EA’s Nick Earl using “exploit” in the same financial context. Here’s John Carmack using it the same way talking about id’s big IPs. It’s just biz speak.
Gamers took issue with the word on an emotional level — nobody wants to think of someone taking advantage of a hobby they love or preying on it when it’s weak. But that definition of “exploit” simply isn’t this definition, and I think people who only heard that one word had an instant negative reaction to it. I understand why, but it’s not the right interpretation.
I think the core disconnect and gleeful gamer anger all stems from this: Bobby Kotick is responsible for the business end of Activision, but the developers are responsible for the creative and emotional ends. Gamers don’t connect with boardroom balance sheets; they connect with game experiences. When the biz stuff comes through on the gaming wavelength, it’s an easy jump to a poor conclusion — “Bobby doesn’t play games much so that (illogically) means he hates them, and I like games, so I don’t like him. Bobby makes a comment about the economy, but I think (illogically) that he was talking about people, and I am people, so I don’t like him.”
Throughout my media days, I’ve always tried to determine the truth, whether that’s popular or unpopular. If what has been alleged about Those Infamous Comments were true, I could totally understand the outrage. But when these “facts” are really just negative assumptions and faulty interpretations, and people keep repeating them anyway as if they’re truth…well, I felt that should be straightened out.
That’s what I’ve learned and how I learned it. I’m looking forward to your comments.
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