Will Activision Blizzard franchise their brands for iGaming?

When thinking about Activision Blizzard, game titles like the World of Warcraft, Call of Duty and Guitar Hero series all spring to mind and have undoubtedly made the company one of the wealthiest in the world as those titles have all been huge hits on their own.

According to data from the second quarter of the 2019 financial year, Blizzard were ranked fifth on a list of the top 25 public video game companies, having amassed an earning of $2,131m, behind gaming behemoths Tencent, Sony, Microsoft and Apple.

However, will the organization look to lend their titles to the iGaming sector and look to make more money in the future? Although it would be hard to say whether they will or not, there is certainly scope for it and no reason to suggest why they would not consider it.

History of Activision Blizzard

Current company CEO, Bobby Kotick, has continued to seek out other companies to try and acquire them and expand their portfolio and it has been something he has been extremely successful at doing.

Kotick spent a decade expanding Activision's products through acquisitions of an estimated 25 studios, which resulted in several successful series of games, including Tony Hawk's, Call of Duty, and Guitar Hero, before going on to successful merge with Blizzard and acquire the rights to the hugely popular World of Warcraft series in 2008.

The mergers and acquisitions have not stopped, though, as the company continues to add some of the biggest brands to their portfolio, with developers King, who created the hit game Candy Crush Saga and it’s variations, being acquired for $5.9 billion in November 2015.

Their focus on earning money remained clear to see that year as well, as they had managed to acquire the rights to the Major League Gaming eSports division, whilst continuing to make deals with video platforms, YouTube and Twitch.

Activision Blizzard do not appear to show any signs of slowing down with their merger and acquisition model, either, as they partnered up with Sportradar in 2020 in an effort to try and restore some betting integrity in their eSports offerings.

Scope for iGaming franchises

Therefore, there could be some movement in the future regarding Activision Blizzard and the iGaming market. There is certainly a scope for it, as well.

NetEnt Slots are one such company within that field that has an untold amount of success when it comes down to bringing some of the biggest titles to the online casino scene. The Swedish developers have recently brought classic arcade game Street Fighter 2 to players in the form of a slot game and there would not really be a reason as to why they would not be able to do something similar with the likes of Call of Duty or even the Candy Crush Saga series.

When taking the amount of money that each title brings Activision Blizzard and their desire to continue making as much money as possible, it would perhaps make a lot of sense to franchise the games to a new market in the future.

Estimates in 2015 had already placed the earnings for the Call of Duty franchise at $9.7 billion, however that appears to have been grossly underestimated as Activision’s own financial statements revealed in 2015 that the Call of Duty franchise has earned more than $11 billion over the course of its existence up to that point.

Indeed, things have changed since then, however the game title has continued to soar in popularity, with 2019 seeing the release of Modern Warfare 2 cross the $1 billion mark in terms of sales in just two months following its release - with the game amassing over $600 million in just three days.

In fact, due to the Coronavirus pandemic in 2020, Activision Blizzard have had to change their initial forecasted earnings and have revealed they expect them to be larger than previously thought, as more and more people have had to stay in lockdown and have turned to gaming as an option to help time pass by. Activision raised its 2020 adjusted revenue forecast to $6.9 billion from $6.73 billion.

That figure will also likely include forecasted earnings of their Candy Crush Saga offering as well, with the mobile game having proved to be an extremely lucrative game and one that may have benefited even further during the world’s lockdown. It had been reported that the series of games collectively made more than $1.5 billion in revenue from microtransactions in 2018 across iOS and Android; a figure that works out to a huge $4.2 million spent per day on average.

Developments

Although Activision Blizzard’s portfolio of titles are already world-renowned and do not necessarily rely on one particular market, recent changes to laws in certain areas may help to convince the company that the potential of franchising their games to the iGaming industry would not be a bad idea.

American lawmakers have started to ease the restrictions that some states have held over gambling and as it is still a relatively new market, it could be a potentially lucrative one for Activision Blizzard, with their games already having the well-known brand behind them.

“The driver for all of these companies is that the United States presents tremendous market opportunity, both for sports gambling and iGaming. It is the largest market, by far, in the world,” said Joe Stauff, an analyst with Susquehanna International Group. “So any company that believes it has the ability to offer sports wagering or iGaming would be crazy not to enter the U.S. market.”

Conclusion

With everything considered, Activision Blizzard would certainly be wise to branch out into the iGaming sector and use a partner like NetEnt to help them launch their products to a potential new type of gamer that they have not quite captured.

All the hard work regarding the promotional side of the brand will have already been completed, as the titles already speak for themselves and there would likely be a clamour from consumers to try and get in on the latest offerings from the beginning.