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Kotick explains how to sell a $50 game, and get $500 out of it

Tuesday, 15th September 2009 22:32 GMT By Stephany Nunneley

bobbykotick2

During the Deutsche Bank Securities Technology Conference in San Francisco, Activision CEO Bobby Kotick explained how the company gets consumers to pay loads more for a Guitar Hero game, than the initial $50 price tag.

“In the last cycle of videogames you spent $50 on a game, played it and took it back to the shop for credit,” he told attendees. “Today, we’ll you a $100. You might add a microphone or drums, you might buy two or three expansions packs, different types of music. Over the life of your ownership you’ll probably buy around 25 additional song packs in digital downloads. So, what used to be a $50 sale is a $500 sale today.

“And the best of all margins – the 25 percent operating margin business – has the potential as we can see with World of Warcraft to be a 50 percent operating margin business. What used to be a low 20s return on invested capital business is now growing to a plus 40 percent return on invested capital business.”

Wow. Just wow.

More through Spong.

Thanks, GoNintendo.

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14 Comments

  1. ChrisPilote

    This guy is utterly despicable.

    #1 5 years ago
  2. BraveArse

    Like I said before – that’s satan’s nose on that pudgy little face. I’ll be steering clear of activision products for the forseeable. If I really want something by them I’ll wait for the secondhand market to provide. That way they dont get the cash.

    #2 5 years ago
  3. Grimrita

    He needs to take his face for a shit.

    #3 5 years ago
  4. Jadeskye

    He’s ugly, sometimes controversial and usually an asshole.

    But he’s a rich asshole that made 15 million dollars last year.

    he just got a lot more attractive lol.

    #4 5 years ago
  5. freedoms_stain

    “Today, we’ll you a $100″

    Any chance the missing word is “give”?

    Not bloody likely I know :(

    #5 5 years ago
  6. Yoshi

    Why does this dude remind me of tony blair lol

    #6 5 years ago
  7. DarkElfa

    So to sum up, today they charge for everything that used to be a perk that made your game worth its ridiculous price.

    #7 5 years ago
  8. bytemap

    Well, I don’t like it as much as the next person, but to be honest, we are to blame. Not us personally, but the individual that is paying for the items.

    If no one bought those items, do you think it would stay at $50 or whatever price? Most crappy games that started out that way tell us otherwise, but hey, the average consumer is telling him and every other marketer they are willing to pay.

    LOL, good luck to everyone.

    #8 5 years ago
  9. MasterChiefFenix

    and it’s all for karoake! mwuahahahaha!

    #9 5 years ago
  10. JPickford

    Nobody is buying add-ons for a game they don’t like. For his system to work, the initial game has to be excellent. Surely a good thing?

    #10 5 years ago
  11. Blerk

    That’s right – you can’t really blame him for milking a system which people are obviously happy with.

    Of course, perhaps he doesn’t have to be such a smug, smarmy git about it.

    #11 5 years ago
  12. bugmenot

    what alarms me most about kotick is his comment that they are not interested in games which “don’t have the potential to be exploited every year on every platform with clear sequel potential and have the potential to become $100 million dollar franchises. …”
    can you imagine how many games would never have been made if all publishers thought like this? If sega didnt spend its sonic dollars on Madworld for example or Capcom didnt spend its Resi bucks on GodHand..

    #12 5 years ago
  13. frostquake

    So Activision is going to be releasing Only BARE BONES games, and then you buy DLC over and over and over again! The only way to stop them from doing this…is to hit them in the WALLET! Which most consumers will not do, but if you can avoid buying their products, until they QUIT releasing BARE BONES games, then they will stop, otherwise, they will keep sucking your money out of your pockets and release BARE BONE subpar games..hoping that you will buy DLC over and over and over and over again, until you SPEND $500 Dollars!

    #13 5 years ago
  14. joshua nash

    kotick= hell spawn of satan, the man is just EVIL!

    #14 5 years ago

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