Activision to Spend $500 Million Promoting Destiny
Activision is going all-in on Destiny, with a $500 million marketing spend planned.
During the Milken conference in Los Angeles last week, Activision CEO Bobby Kotick talked about the plan, reports Reuters.
“If you’re making a $500 million bet you can’t take that chance with someone else’s IP. The stakes for us are getting bigger,” said Kotick.
According to a company spokesperson, the number was accurate but also included marketing, packaging, infrastructure support, royalties and other costs.
Activision signed a 10 year contract with Bungie in 2010 that not only specified that the latter would make the game, but that they would also develop further installments every two years, with DLC in-between.
Analysts told Reuters that $500 million could be the most ever spent on a single game, and speculated that Activision would need to sell 15 to 16 million units just to break even. Sterne Agee analyst Arvind Bhatia said, “It’s a head scratcher. For brand new IP, it’s tough but it could post a big surprise.” He went to predict that the game would sell 8 million units.
“Bungie’s very ambitious plan is designed to unfold over a 10-year period. The depth of creative content, scope and scale is unprecedented and is required to bring Bungie’s vision to life,” an Activision spokesperson told Reuters. “Over the long term, we expect the ultimate product costs to be roughly in line with other Triple-A titles.”
Regardless of how confident Bungie might be, this is a big bet for Activision. With Call of Duty sales down a bit last year and World of Warcraft subscription numbers declining, the company needs another big hit to add to its stable. Destiny might be that hit, but whether or not it’s worth $500 million remains to be seen.