Bobby Kotick, previously known as CEO of Activision Blizzard, shared on a podcast an expensive lesson he learned from a studio acquisition around two decades ago. In conversation with Bing Gordon, former Chief Creative Officer at Electronic Arts, Kotick reminisced about the past forty years in the gaming industry.
When Gordon pointed out that Kotick and his team boasted an unblemished track record in mergers and acquisitions, Kotick corrected the assumption by recalling a single studio acquisition that didn’t turn out as planned, which he referred to as an expensive learning experience worth around $80 million.
‘We Wrote it Off’
In a recently released episode of the ‘Grit’ podcast (currently not available on YouTube), Kotick delved briefly into a regrettable purchase made by Activision prior to their merge with Blizzard in 2008.
He said:
It’s not true, we actually had a bad acquisition.
…We acquired the business located in Manchester, known for its Xbox driving game production, and it was named… (blank)
They had an exceptional individual managing daily operations, yet he was reminiscent of… An exceptionally intelligent person, much like a ‘McKenzie type’, and he specialized in strategic planning.
Two years ago, the total amount was $80 million, which we had to write off. Every aspect of it went against all our deeply held values and principles.
That guy was an expensive lesson.
Here, Kotick is discussing Bizarre Creations, the team behind the Project Gotham Racing series, exclusive to Xbox. After the acquisition, Microsoft retained the PGR brand. However, Activision utilized Bizarre Creations to create ‘Blur’, a game launched in 2010, three years after the acquisition took place in 2007.
2009 was the planned release year for Blur, but Activision postponed it to give Bizarre more time to refine and perfect the game.
Approximately a year after, Activision made the decision to shut down Bizarre Creations, effectively ending the studio that was actually located in Liverpool, not Manchester, as stated by Kotick. This action led to the release of approximately 200 employees from their positions.
To this day, the Project Gotham Racing series stands abandoned
Kotick guided Gordon through the past acquisition strategies of Activision, which primarily focused on preserving the unique identities of studios and letting them continue with their existing work. On the other hand, he clarified that Electronic Arts, Gordon’s previous employer, tended to absorb acquired studios and rebrand them, thereby altering their original character to some extent.
During the conversation on the Grit podcast, both Gordon and Kotick shared an interesting tidbit: At one point, Electronic Arts had considered acquiring Activision Blizzard, a move that could have placed iconic series such as Call of Duty under the EA brand.
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2025-02-12 11:18