The two companies announced in January they are parting ways after eight years. Activision Blizzard is now transferring “Destiny’s” publishing rights to Bungie so it can focus on its own intellectual properties. During the earnings call, Activision said it’s confident this is the right decision for both parties.
“Bungie gets to focus on the IP that they created and we get to focus on our biggest opportunities and our biggest franchises with our best resources,” said Activision Blizzard president and chief operating officer Coddy Johnson.
Johnson cited three main reasons for the split. One, Activision Blizzard didn’t own the “Destiny” IP, and that lack of control meant it couldn’t create new experiences and new engagement models that lead to new revenue streams.
Second, while “Destiny” is a critically-acclaimed franchise, it wasn’t meeting the publisher’s financial expectations. “As we went through our financial planning for 2019, it indicated that ‘Destiny’ would not have been a material contributor in operating income to our business,” Johnson said.
Lastly, Activision Blizzard said supplementing Bungie’s work was using up one of its scarcest resources — developer talent. Now that it’s no longer “Destiny’s” publisher, those employees will be freed up to work on other projects once the transition period ends.
Focusing on its own intellectual property seems to be a major goal for Activision Blizzard in 2019. The publisher said on Tuesday it’s laying off approximately 775 people — 8% of its 9,600 workforce — as it turns its efforts toward live services and flagship first-party franchises like “Call of Duty,” “Overwatch,” “Diablo,” and “Candy Crush.”
Activision Blizzard net revenue for the fourth quarter of 2018 was $2.38 billion, beating its outlook of $2.24 billion. Net income for the year was $1.8 billion, up from $273 million in 2017.