Careers at Activision Blizzard
Activision Blizzard’s mission is to create the games that unlock the player in everyone.
Activision Blizzard is a provider of interactive entertainment software. The company operates two reportable business segments:
- Activision Publishing (“Activision”) – Develops interactive software products and content
- Blizzard Entertainment (“Blizzard”) – Develops online PC games, including massively multi-player online role-playing games (MMORPGs)
The company also participates in other business opportunities grouped into a non-reportable segment called “Other“. They are the Activision Blizzard Media Networks (“Media Networks“) and Activision Blizzard Studios (“Studios“) businesses.
In 1972 Nolan Bushnell and Ted Dabney founded Atari, a producer of video arcade game systems. In 1977 it released its first home video game console system, the Atari 2600. In 1979 four programmers for the company, David Crane, Alan Miller, Bob Whitehead, and Larry Kaplan, met with its CEO to request that their names be included on the packaging of the games they developed and that they receive royalties. They were rebuffed, and Crane, Miller, and Kaplan decided to leave.
The three men launched Activision along with venture capitalist Richard Muchmore and music industry executive Jim Levy; Kaplan joined later. A producer of video games, the company’s name was a combination of the words “active“ and“television.“ It was the first third-party game developer, as up until then console makers had designed their own software. The founders‘ goal was to capture a large share of the home gaming market before competitors could realize its full potential.
In 1980 Activision published its first set of titles, a series for the Atari 2600 called “Pitfall!“ This was followed by “Kaboom!“ in 1981 and “River Raid“ in 1982. Its releases became hugely successful, selling millions and making Activision a big name. In 1983, it took advantage of this fortune by going public. In 2007 the company announced it was merging with fellow game developer Vivdendi Games, which was the parent of Blizzard Entertainment. The new entity was called Activision Blizzard. Sales grew even stronger with the move, and by the end of 2010 it was the world’s largest publisher.
Business model of Activision Blizzard
Activision Blizzard has a mass market business model, with no significant differentiation between customers. The company targets its offerings at a broad selection of consumers, ranging from core gamers to casual players and from children to adults.
Activision Blizzard offers three primary value propositions: accessibility, risk reduction, and brand/status.
The company creates accessibility by offering a large variety of options. While it is mostly known for its first-person action titles, it develops games spanning a wide range of genres, including the action/adventure, simulation, role-playing, and strategy categories. The firm expanded its selection further by acquiring King Digital Entertainment in 2015, which added mobile games to its portfolio. Moreover, Activision Blizzard makes titles for all major consoles, including Microsoft’s Xbox One and Xbox 360, Nintendo’s Wii and Wii U, and Sony’s PlayStation3 and PlayStation4.
The company reduces the risk of low quality through an evaluation procedure. Called the “Greenlight Process“, it consists of in-depth reviews at critical stages of development by a group that includes high-ranking operating managers and from the worlds of sales, marketing, and development. The firm also vets external game developers who contribute content based on past track record.
The company has established a strong brand as a result of its success. It bills itself as the most successful interactive entertainment company in the world. Its games have over 500 million monthly active users in 196 countries, and provide 42 billion hours of entertainment annually. Its selection includes some of the most prominent titles of all time, including “Call of Duty“, the best-selling Western interactive franchise, and “Skylanders“, “World of Warcraft“, and “StarCraft“.
Activision Blizzard’s main channels are digital online channels and physical retail outlets. Retail outlets include consumer electronics stores, mass market retailers, game specialty stores, and discount warehouses. Specific retailers include GameStop, Amazon, Target, Best Buy, Toys ”R” Us, and Wal-Mart. The firm promotes its offerings through its website, social media, online/print/TV advertising, industry and in-store promotions, direct marketing, and product sampling.
Activision Blizzard’s customer relationship is primarily of a self-service, automated nature. Customers utilize its products while having limited interaction with employees. That said, there is a personal assistance component in the form of phone and e-mail support, as well as 24/7 online support.
Activision Blizzard’s business model entails designing and developing software games for its customers.
Activision Blizzard occasionally utilizes independent third-party developers to create content, chosen for their expertise in specific categories for specific platforms. Doing so enables it to lower fixed development expenses, share development risks, and gain access to proprietary technologies. The company uses sub-contractors for disk duplication, packaging, printing, and manufacturing.
Activision Blizzard’s main resources are its human resources, which include creative, technical, and production professionals. They maintain expertise in programming, animation, script-writing, music development, and sound/special effects. The company also depends heavily on sales/marketing staff.
Activision Blizzard has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of sales, a variable expense that includes product and online costs, as well as those associated with software royalties and intellectual property licenses. Other major drivers are in the areas of sales/marketing and product development, both fixed costs.
Activision Blizzard has two revenue streams:
Product Revenues – Revenues generated from sales of games, including digital full-game downloads and physical products
Subscription, Licensing, and Other Revenues – These include the following:
- Subscription Revenues – Primarily obtained from ”World of Warcraft”, which is typically sold on a subscription-only basis
- Licensing Revenues – Royalties obtained from third-party licensees in China, Taiwan, and Russia that host certain Blizzard games in their countries
- Other Revenues – Primarily include revenues from micro-transactions, digital downloadable content (e.g. multi-player content packs), and the licensing of intellectual property other than software to third-parties
info: Bobby earned a degree from the University of Michigan. He previously served as Chairman of Activision, CEO of Four Kids Entertainment, and Presiding Director of Yahoo! He is the Founder and Co-Chairman of Call of Duty Endowment, a non-profit.
info: Dennis earned a B.A. in Government from Dartmouth College and an MBA from Harvard University. He previously held a number of executive positons at Microsoft, including Chief Operating and Financial Officer of its interactive entertainment business.
info: Thomas earned a Master's degree in Economics and Social Sciences from the Vienna University of Economics and Business Administration. He previously served as Chief Corporate Officer and Chief Financial Officer of Activision, and also worked at P&G.
info: Brian earned a B.A. in Marketing and Management from Marquette University. He previously served as EVP of Global Sales at Cadbury Schweppes, and held various executive roles at Wyeth Pharmaceuticals, Pillsbury, and GlaxoSmithKline.
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