No matter how successful free-to-play games like Fortnite become, the traditional $60 business model isn’t going anywhere, says Activision Blizzard President and COO, Collister Johnson.
During their Q1 financial review conference call yesterday, Activision Blizzard execs discussed the impact games like Fortnite are having on the company’s revenue and player base.
In the context of Fortnite’s undeniable foothold on the gaming marketplace at large, Johnson was asked whether Activision Blizzard would reevaluate the efficacy of the $60 business model for games. In response, he argued that different business models can co-exist without being detrimental to each other:
“Right now, today, we have a full range of business models, free-to-play, subscription, upfront payments, downloadable content packs, ongoing microtransactions, all of these succeeding at scale. [We] do believe $60 games will continue.”
Opponents of the idea could argue that not all business models are created equal. Downloadable content and microtransactions, for example, have been plaguing new releases with controversy for years, often overshadowing the substance of a game’s core experience. What seems to make a difference to gamers is whether those microtransactions are affecting competition, otherwise known as “pay-to-play.”
CEO Bobby Kotick acknowledged the elephant in the room with an optimistic tone, emphasizing the industry-wide benefits of Fortnite’s monumental success by saying, “This game is attracting new players of all ages and gender and it is helping gaming become even more mainstream entertainment.” Without a direct competitor to Fortnite, it’s clear the top executives at Activision Blizzard don’t feel threatened by the battle royale juggernaut.
On the financial side, Activision Blizzard reports hopeful numbers in Q1 revenue, proving minimal impact on sales figures from Fortnite alone. That being said, Chief Financial Officer Spencer Neumann admitted that Activision Blizzard has “seen some near-term impact from Battle Royale.”
There are few companies better positioned than Activision Blizzard to defend their business model in the face of Fortnite, considering the worldwide success and longevity of franchises like Diablo and World of Warcraft, not to mention the phenomenon that is Overwatch. What remains to be seen is whether its reluctance to consider more modern business models, specifically free-to-play, will have an effect on its position in the marketplace.
Overwatch‘s director expressed interest in adding a battle royale mode to Overwatch last year, although nothing further has surfaced.
Source: Activision Blizzard