Project 1 Activision Blizzard PDF

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Summary

Project 1 for Marketing Essentials. Research a publicly-traded company and provide a detailed analysis....

Description

Marketing Essentials Project 1 MKTG 260 X

Table of Contents Table of Contents 2 Title Page………………………………………………,,,………………………………………………..1 Introduction…………………………………………………………………..……………………………3 Value Proposition…………………………………………………………………………………………4 SWOT analysis and summary………………………………..…………………………………………5 SWOT analysis and Summary Continued………………………………………….………………….6 SWOT analysis and Summary Continued……………………………………………………………..7 Target Market and Positioning………………………………………………………………………….8 Conclusion and Recommendation……………………………………………………………………..9 Reference List…………………………………………………………………………………………. 10

Introduction

Activision Blizzard is one the most successful interactive entertainment company in the world with an entertainment network spanning nearly 500 million active monthly users in 196 countries (Activision Blizzard, 2019). Iconic and blockbuster franchises such as Call of Duty, World of Warcraft, StarCraft, and Candy Crush are all owned by Activision Blizzard through one of their five operating units: Activision, Blizzard Entertainment, King Digital Entertainment, Major League Gaming, Activision Blizzard Studios. Activision Blizzard continues to expand its capabilities through different genres, audiences, and geographies to bring their video game franchises all around the world. Prior to 2008 Activision and Blizzard were unmerged as separate companies, as such there are two mission statements.

Blizzard is “Dedicated to creating the most epic entertainment experiences… ever.” the principles and beliefs that have guided Blizzard throughout the years follow eight core values: Gameplay First, Commit to Quality, Play Nice; Play Fair, Embrace Your Inner Geek, Every Voice Matters, Think Globally, Lead Responsibly, Learn & Grow (Blizzard Entertainment, 2019).

Activision states “We believe great games start with great people” Activision prides itself on recruiting the worlds brightest and best talent to build their great games. Activision Blizzard values their team and the community of players who play their game the most and strive to achieve good standing with them first (Activision, 2019).

Value Proposition

Focusing on Activision’s Call of Duty franchise, a long-lasting franchise starting in 2003 and continuing through the present. The Call of Duty franchise is a first-person shooter video game franchise originally focusing on games set in World War II but has since evolved to other timelines including futuristic worlds. Though Call of Duty’s themes and gameplay is more suited for mature audiences the demographic that buys or receives the games are teenagers and young adults. The newest Call of Duty game yet to be released, Call of Duty Modern Warfare a soft-reboot of the original Modern Warfare from 2007 that has been remastered previously in 2016.

The value proposition has been changed from the consistent style seen in previous games, as of late the games mainly multiplayer-focused has had loot boxes that can be purchased that unlock different types of customizations for the player or boosts in the form of experience, guns, or characters. Loot boxes are seen as the black sheep for video games as it locks content behind a paywall encouraging teenagers and young adults to pay for the extra experience in the form of gambling as none of the good content is promised when a loot box is opened. The new Call of Duty plans to remove loot boxes in favour of a battle pass, a pass that both have a normal and premium (paid) option which has the players level up and gain experience to unlock new content, though the content is unlocked faster through the paid version of the battle pass. Nevertheless, Call of Duty’s value proposition is to deliver three expansive and distinct game experiences in each game: Campaign, Multiplayer, and Zombies (in some games the Zombies mode is not included instead opting for another mode called Spec Ops). Most video games follow a similar pricing scheme and are within a similar range of prices, Call of Duty is no different and as such charges around $60-$80 a game. Like said in chapter 2.3 “A schedule or timeline provides a nice bookend to the marketing plan process, bringing to life the reality and expectations associated with the completion of the plan.” game developers take the consistent pricing scheme into consideration at the start but do try to pack as much content as they can into the game during their consistent yearly release schedule so that consumers favour the game over the competition (Gaudet, Boivin, 2018, 2.3).

SWOT Analysis and Summary

Strengths    

One of the biggest franchises for the shooter genre Large shelf space at retailers Strong cash amount Smooth revenue stream

Weaknesses    

Difficult relations with developers Legal issues High product development costs High risk to produce games other than main franchises

Opportunities    

Pre-owned market Esports Mobile Gaming Movies

Threats    

Government regulation and video game rating Failure of high-cost production Recessions Seasonal demand

SWOT Analysis and Summary Continued

Activision Blizzard and the Call of Duty franchise has many strengths and opportunities but many weaknesses and threats as well. The strengths of Call of Duty are that they are one of the biggest shooter game franchise, competing with Halo and Battlefield. The consistent release of a Call of Duty game from one of the three developers; Infinity Ward, Treyarch, and Sledgehammer Games, keeps consumers satisfied as it brings new experiences to the table regularly. Both Halo and Battlefield follow inconsistent release dates, as well as the games, differ from Call of Duty as Call of Duty appeals to consumers with a quick arcade-style while maintaining a realistic genre. As Call of Duty is one of the leading franchises, they hold a considerable amount of shelf space at retailers helping to promote and grab the attention of consumers by placing the game at the forefront of the store (Mueller, 2019). Activision Blizzard helps to reinforce the strength of Call of Duty with a highcost production due to their strong cash amount from a steady income flow (Activision Blizzard, 2019). The weaknesses that hinder Activision Blizzard and the Call of Duty series is a high product development cost due to the large studios that produce the games as well as the large marketing expenses to further promote a new entry into the series each year. Due to the large investment for the current franchises, Activision Blizzard has a high risk to invest and produce new intellectual properties due to the impact on the company if they fail. After the amazing success of Call of Duty Modern Warfare 3 former Infinity Ward heads Jason West and Vince Zampella were dismissed from the company and started a long and drawn-out legal battle. Zampella and West said that Activision owed the two royalties from the most recent game, but Activision accused them of conspiring to defect to create a new studio with Activision’s main competitor Electronic Arts (Fogel, 2019).

SWOT Analysis and Summary Continued Activision Blizzard has started to expand their products and broaden their horizon by expanding into some of their opportunities. Recently Call of Duty released their Call of Duty mobile game in attempts to capture more consumers, though Activision Blizzard does have a good chunk of the mobile market as they own the Candy Crush franchise as well. With electronic sports growing bigger than ever, Call of Duty as well as other Activision Blizzard franchises like Overwatch has been incorporating esports into their focus especially since Activision Blizzard owns Major League Gaming a large e-sport company. Though two other markets have been left untouched, the pre-owned market mainly held by Gamestop and the movie market. Activision Blizzard previously expanded its World of Warcraft franchise into the movie market with the movie Warcraft: The Beginning though only scoring a 6.8/10 by imdb.com (IMDb, 2016). The pre-owned market has been largely untouched from many companies as Gamespot has had control for most of it, if Activision Blizzard can capitalize on the pre-owned market, they could increase their cash flow .

Activision Blizzard does have several threats looming over them as well including, government regulation and the rating of their games, the detrimental impact if a high-cost production fails, seasonal demand of their games, and recessions in the market. Since most of Activision Blizzard games are violent in nature, they run the risk of being regulated in certain countries and given mature ratings lowering their consumer base who can purchase their games. With many of the games produced having very high cost budgets the impact on a company if one were to fail would be detrimental as well as permanently affecting the perception of the game company from the consumers. Seasonal demands play a large role in when games are released and purchased. Many Call of Duty games were released in November none other than to solidify large promotions to entice consumers to buy the game in the Christmas season, though games released during the other parts of the year or released at the same time as games from other producers have a negative impact on sales. A recession in any market brings down the sales of mostly everything, as such Call of Duty as well as the other franchises of Activision Blizzard would be affected due to market fluctuations.

Target Market and Positioning

Call of Duty is mainly targeted towards the 16-30 range due to strong violence and language. The Pan European Game Information (PEGI) video game content rating system has a large factor in the target demographic of the game as they can rate it whatever they seem appropriate, previously Call of Duty has been rated PEGI 16 meaning the suitable audience is the age of 16 and above and PEGI 18 where the suitable audience is 18 and above. The demographic mainly appeals to males from the age of 14-30 where Activision Blizzard has been under fire for not putting enough steps to reduce kids under the age of 18 that play their violent games. The psychographic side aims to relieve stress from the day at school or work though again Activision Blizzard has been under fire as well as gaming for promoting violence in children that may or may not lead to shootings. Call of Duty is promoted far and wide in many different parts of the world including North and South America, Europe, and Asian. Activision Blizzard uses customer loyalty by offering exclusive items in games if players use the same account from previous games as well as target the purchasing behavior by offering games that stay in a safe similar style of one another.

Conclusion and Recommendation Activision Blizzard is one of the largest video game producers that are in the market now with several large profitable franchises with multiple strengths and opportunities. Employing several large teams made up of the best that the market has to offer Activision Blizzard is in the hot seat to make enjoyable games for consumers and continue to be very profitable as well. Activision Blizzard listens to the consumer base they built for improvements and ideas to continue to build great experiences, though have previously upset consumers due to greed. The company has already started to expand into new markets and hopefully will continue their growth throughout the different markets. Activision Blizzard should focus on the market penetration strategy to continue developing its current intellectual properties by releasing new games and continuing to support previously published games. Large amounts of the consumer base were upset with the direction of the Call of Duty franchise with the introduction of loot boxes and much of the content locked behind paywalls. As well as the Diablo franchise not continuing to grow the PC fanbase with a new game but instead attempting to branch off into the mobile market to much disagreement from the consumers.

Reference List

Activision Blizzard. (2019). Activision Blizzard: Our Company. Retrieved from https://www.activisionblizzard.com/about-us

Blizzard Entertainment. (2019). Blizzard Entertainment: Mission Statement. Retrieved from https://www.blizzard.com/en-gb/company/about/mission.html

Activision. (2019). Activision | About Us. Retrieved from https://www.activision.com/company/aboutus

Mueller, J. (November 24, 2018). Activision Blizzard: Strengths, Weaknesses, Opportunities, Threats. Retrieved from https://www.fool.com/investing/general/2010/06/15/activision-blizzardstrengths-weaknesses-opportuni.aspx

Activision Blizzard. (August 8, 2019) Activision Blizzard Announces Second-Quarter 2019 Financial Results. Retrieved from https://investor.activision.com/news-releases/news-releasedetails/activision-blizzard-announces-second-quarter-2019-financial

Fogel, S. (May 31, 2019). Activision settles lawsuit with former Infinity Ward heads West and Zampella. Retrieved from https://venturebeat.com/2012/05/31/activision-settles-lawsuit-withformer-infinity-ward-heads-west-and-zampella/

IMDb. (May 19, 2016). Warcraft: The Beginning (2016). Retrieved from https://www.imdb.com/title/tt0803096/ Gaudet, D., Boivin, M. (2018) Digital Core for Gaudet’s MindTap for Marketing: 1st Edition. Nelson Education Ltd....