In 2015, Activision Blizzard announced the creation of the their own movie and television studio. They didn’t just announce it as an upcoming project though; they had already hired a former Disney exec to develop and head the fledgling studio which already had some wheels in motion with the Warcraft movie releasing in June 2016.
At the same time, they announced the development of an e-sport division they created and to make sure the bookends match, they hired a former ESPN exec (which is owned by Disney) to head the studio. Not ones to rest on their laurels, Activision has purchased assets from the sinking MLG as of December 2015, meaning they now have some resources and framework with which to begin hosting their own tournaments and events for their existing and upcoming competitive games.
“I have a simple vision for this,” Mr. Kotick said in a phone interview. “I want to build the ESPN of video games.” - Robert Kotick, CEO via NYTimes interview
Movies and TV based on beloved (video game) characters and a sports network; you’ve now created a new baby Disney. (They’re only missing the actual TV networks and the theme parks, but give them some time and they might surprise us.)
Activision hasn’t been shy about throwing cash around lately, with the King purchase to go with the two studios and the MLG purchase. The strategy that seems to be forming is to invest the money they have in the bank to aggressively expand their footprint within their core market (gaming, via mobile games and competitive gaming) and branch out to mediums that can leverage their existing IP (TV and movies).
As with anything, there are risks here. The biggest between the studio announcements would probably be costly movie projects vs. the risk associated with esports; investments that could range in the hundreds of millions of dollars are a large risk for any company. But, based on their choice of partners in Legendary Pictures for their first film Warcraft, I have a hard time believing they’re going to fare poorly.
Of all of the moves they’ve made, the King deal has the greatest risk just based on what a failing mobile division would do to the Activision stock after a $5.9bn investment. In comparison, the media studios are peanuts.
On the up side, Activision has the potential to engage fans on multiple formats and medium, and the amount of time fans spend with IP increases exponentially. You can go from playing one of many Activision Blizzard games, watch a few episodes of their shows, see the newest movie on the weekend, and go back to playing the games. They also have the opportunity to expand the universe of any given IP through these channels providing the deep lore that hardcore fans love (and also helps create new hardcore fans). Or from a competitive gaming standpoint, they now have the capabilities to host their own series of tournaments and service or create fans who care deeply about the competition the Activision Blizzard titles afford.
It also consolidates power and resources in a way we haven’t seen from a publishing company. Sony and Microsoft were already large with heavy resources, and Nintendo never relinquished control of their IP but also hasn’t done a great job of expanding it. Square-Enix might be the closest comparisons as publishers who ventured into another medium with Square Pictures, trying (and failing financially) their hand at the overly ambitious technical feat that was Final Fantasy: The Spirits Within which caused Square to shutter their movie studio, but it’s different this time. Where Square’s ambitions were a reach technologically and the gaming industry was not quite mature enough, Activision has established themselves as a media giant at the right time as technology has finally caught up with the capabilities Square Pictures envisioned many years ago and a more willing and capable audience to consume the media. With a stable of characters and worlds that are already primed for these mediums, it seems almost a logical progression at this point.
So bravo Activision Blizzard. Absolutely brilliant. If you can pull this off, it will put you in the driver’s seat of the gaming industry for many years to come and create whole new trends in the business of the gaming world. Not only that, but you've also positioned yourself to become a real media force in future, using a few Disney-esque blueprints from the past.