Activision Blizzard, Inc.(ATVI) spending $500 million on ‘Destiny’ franchise

Posted May 6, 2014

Activision Blizzard, Inc. (NASDAQ:ATVI) will be spending $500 million on a new franchise called “Destiny,” which is being developed by Bungie. The $500 million figure does not include standard costs, like marketing, packaging, and royalties.

The number was revealed by Activision CEO Bobby Kotick at the Milken Conference in Los Angeles last week. Generally it is difficult to make a profit on a video game and seeing a return on a $500 million investment makes things even harder. Just to break even, Activision would need to sell 16 million copies of the game.

Activision needs to see another franchise win. The Call of Duty franchise generates a lot of money, but it seems to be peaking because of the same gameplay used in every sequel. Activision does not own Bungie, but Bungie went independent after handing the Halo franchise to former owner, Microsoft Corporation. Activision signed a 10-year publishing deal with Bungie, which ensures a stake in any game that Bungie makes.

Destiny is launching on September 9th and it is a massively multiplayer online/role-playing/first-person shooter. The game will initially launch on Sony and Microsoft’s previous and current-generation consoles.