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Tuesday, May 6, 2014

Activision to Spend $500 Million to Develop and Market Destiny

Activision has announced some of it's financial plans for Bungie's upcoming title 'Destiny'. I am unsure how I feel about this... on one hand people will always say that throwing money at a studio doesn't guarantee success. On the other hand, it definitely doesn't hurt. There is a reason that GTA V is approaching $2bn in revenue. Analysts have said that it would require 15-16 million copies of Destiny sold for it to break even. 

Here is what I think will happen. Destiny will not break even. Bungie and Activision know this and they are going ahead with it anyway. Why? Well, when you are playing in the big leagues of AAA FPS games and you try and enter it with a new IP, you are not just creating the game you are buying a market share. Like when a new console comes along, it is sold at a loss (or thereabouts). 

So, now this first edition of Destiny may loose money, but they will have an audience... then when 'Destiny: Modern Advanced Space Survival Horror Elite MMOF2PFPS' comes out, people will recognise the brand and will be more willing to buy it.  Reduction in marketing costs. Then a few years down the line, if current trends persists, COD continues to decline, BF continues to be a mess and Destiny is the shimmer of light in the darkness. 

Activision also signed a 10-year contract with Bungie in 2010 that gives it worldwide distribution rights and significant control over the potential franchise's development. "If you're making a $500 million bet you can't take that chance with someone else's IP," The CEO of Activision commented. 

What you guys think? Is Destiny the COD killer Titanfall was supposed to be?
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