Hollywood is gaining a new player, or maybe millions of them.
Video game giant
The company, based in Santa Monica and with revenue of $4.9 billion over the last year, is the world's fifth-largest video game maker by sales. The TV and movie studio announcement comes amid an ambitious expansion drive that also includes mobile games and spectator-based video game contests known as e-sports.
With the studio, Activision Blizzard is looking to deploy its deep trove of characters and plots into new mediums — a big and expensive bet that enough of its 150 million players will passively watch scripted shows featuring its video game characters, while drawing new audiences.
"The franchises that Activision Blizzard has cultivated have drawn the largest, most compelling fan bases in the world," Nick van Dyk, a former Disney executive tapped to co-head the new Activision Blizzard Studios, said on the eve of the studio's launch. "The thirst for engaging with their characters and universe has been great, but has only been minimally addressed."
The studio push is just one of several initiatives being highlighted at the company's BlizzCon fan festival Friday and Saturday at the Anaheim Convention Center. Activision Blizzard also is launching a media networks division to concentrate on e-sports. In addition, it's making a bigger push into the consumer products business. But the studio is perhaps the riskiest, given previous flops in the industry.
Activision Blizzard is counting on its understanding of its fan base, expanding distribution options and leveraging partnerships to make the business work.
"Film and TV — they are not simply stand-alone, profitable businesses, but they also amplify and extend the tremendous success of our core business," Van Dyk told analysts and media Friday morning.
For its first production, Activision Blizzard will release an animated TV series called "Skylanders Academy," based on "Skylanders," a popular game franchise with a toy tie-in that has generated $3 billion for the company, including the sale of 250 million toys.
The animated series will feature the voices of actors Justin Long ("Alvin and the Chipmunks"), Ashley Tisdale ("Phineas and Ferb"), Jonathan Banks ("Breaking Bad") and Norm Macdonald of "Saturday Night Live" fame.
Next up, the company said: movies based on "Call of Duty," a long-established military first-person-shooter series that has been played by 100 million people. The first film could arrive as early as 2018.
For Activision Blizzard, film and television are a natural product extension, especially as channels and platforms for TV watching proliferate.
"As games evolve into true cross-screen and transmedia franchises, we will see more movie and TV-type content appear that are directly or indirectly linked to games," said Peter Warman, co-founder and chief executive of video game market research firm Newzoo. "The biggest drivers behind this are consumers themselves that stream live game content and create videos or even animation series that are fun to watch."
That said, Warman remains cautious. Activision Blizzard announced Monday a staggering $5.9-billion deal to buy mobile game maker King Digital Entertainment, famous for its "Candy Crush" series, and starting a movie studio at the same time could prove too much to swallow.
Management needs "all their talent and focus on making the acquisition of King work," Warman said. "Being based close to Hollywood, I understand that it could sound tempting, but big investments should have an impact on a global scale, and I am not sure if making movies would do that for them."
Bobby Kotick, Activision Blizzard's chief executive, is no stranger to Hollywood. He's friends with Dreamworks Animation Chief Executive Jeffrey Katzenberg and even earned a cameo in the 2011 movie “Moneyball” playing Stephen Schott, the former co-owner of the Oakland Athletics.
Observers say the recent moves by the company underscores Kotick's ambitions to be a power player in entertainment.
“Bobby Kotick wants to be a media mogul,” said Michael Pachter, an analyst at Wedbush Securities. “To be a media mogul, you need an entertainment business, not just a video game business.”
Getting into film and TV is fraught with risk. Only a handful of video game franchises have successfully translated onto the big screen — namely “Lara Croft: Tomb Raider,” “Prince of Persia” and “Resident Evil.”
Then there are the flops: “House of the Dead,” “Silent Hill: Revelation 3D,” “Hitman: Agent 47,” “Doom,” “Max Payne” and 1993's “Super Mario Bros.,” which starred
“The truth is, results are mixed for video game movie titles,” Pachter said. “The game business doesn't tell immersive stories very well.”
There are exceptions, Pachter said, such as “The Last of Us,” an action-adventure game developed by the Sony-owned Naughty Dog studio, which places a premium on story lines and character development.
That may matter less and less now that the appetite for video game content has become so large that it can support a digital television platform such as Twitch. The Amazon-owned site boasts 100 million monthly unique viewers to watch other people play games in real time.
Activision Blizzard isn't the first game developer to try to break into the entertainment studio business. Microsoft launched
French game maker Ubisoft also operates a movie studio and will release a film next year based on its popular title “Assassin's Creed.”
Activision Blizzard also has a movie in the works that predates Friday's studio announcement. “Warcraft,” a collaboration with film studio
FOR THE RECORD:
An earlier version of this article referred to an upcoming film as "World of Warcraft." The name of the film is "Warcraft."
Activision Blizzard Studios co-head Van Dyk said he joined Activision Blizzard because video games had become a major "phenomenon" in the broader entertainment business.
By his count, the more than 14 billion hours that people spent playing or watching Activision Blizzard games over the last year equaled the hours of movie-viewing in theaters worldwide over the same period.
Van Dyk's role at Disney had him involved in the acquisitions of Marvel and Lucasfilm as the entertainment powerhouse built a stockpile of intellectual property that could turn into all forms of media.
He described seeing a similar opportunity at Activision Blizzard, which is picking up even more games and an additional 475 million players through its pending acquisition of King. Together, they'll have 547 million players and 13 game franchises.
"It's an inexhaustible number of story lines, characters and universes, and every bit as rich as Disney's," he said. "Every studio clamors for these hugely impassioned fan bases and not many have it."