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Activision CEO: Competitors' games 'are less than adequate'

The outspoken chief executive didn't mention competitors by name, but appears to believe that Activision is one of few companies delivering high-quality games.

Daniel Terdiman/CNET

Activision CEO Bobby Kotick took a shot at competitors during an earnings call with investors yesterday.

During the call, Hudson Square Research analyst Daniel Ernst asked Kotick why he believes Activision Blizzard is performing relatively well when the entire game industry "was down 30-something percent in the first half of the year."

Kotick first discussed issues with the "macroeconomic environment," saying that unemployment and other negative economic indicators are having an impact on the industry. But then he unloaded a shot directed squarely at his company's competitors.

"I think you have had, unfortunately, a stream of products that are less than adequate from some of our competitors and I think the demands and the expectations in the marketplace [are] for great quality products," Kotick said, according to a transcript published by Seeking Alpha. "And if you look at the success that we're having, it validates that there is an opportunity for great quality products, but I think where we are in the console cycle makes it more challenging for anything other than great quality products."

Kotick didn't say which competitors are delivering sub-par products. However, he obviously believes that his company's offerings, which include the Call of Duty franchise, are superior to what's being offered by many other companies.

It might be difficult to argue with Kotick's assertion. The fact is, the game industry, as a whole, is down considerably this year, and prominent publishers, including Nintendo, are having some difficulty attracting players. Meanwhile, as Activision Blizzard pointed out in its earnings report yesterday, it was the top independent game publisher in North America and Europe during the second quarter.

Activision's success has been aided by Skylanders Spyro's Adventure, which the company claims, was the "best-selling console and handheld game overall in dollars for the first six months of 2012." Add that to the wildly successful Diablo III, World of Warcraft holding steady, and the Call of Duty franchise still attracting online gamers, and it appears the company is on the right track.

The financials certainly seem to indicate just that. Activision generated $1.08 billion in revenue during the second quarter and a $185 million profit, beating Wall Street's expectations. More importantly for the company, many industry observers believe only better times are ahead.

"Activision is in a position to deliver dramatic revenue growth this year and next, and given the leverage from these high margin titles, it is likely that earnings will once again grow more rapidly than revenues in both years," Wedbush analyst Michael Pachter wrote today in a research note to investors.

(Via GamesIndustry.biz)