Activision, Inc. publishes interactive entertainment software products worldwide. The company’s products cover different game categories, including action/adventure, action sports, racing, role-playing, simulation, first-person action, and strategy. The company’s target customer base ranges from casual players to game enthusiasts, children to adults, and mass-market consumers to ‘value’ buyers.
The company offers its products primarily in versions that operate on the Sony PlayStation 2 (PS2), Nintendo GameCube (GameCube), Microsoft Xbox (Xbox), and Microsoft Xbox 360 (Xbox360) console systems, Nintendo Game Boy Advance (GBA), Sony PlayStation Portable (PSP), and Nintendo Dual Screen (NDS) hand-held devices, and the personal computer (PC). The company had also offered its products on the Sony PlayStation (PS1) and Nintendo 64 (N64) console systems, and the Nintendo Game Boy Color (GBC) hand-held device.
The company’s publishing business involves the development, marketing, and sale of products directly, by license, through its affiliate label program with certain third-party publishers. The company’s distribution business consists of operations in Europe that provide logistical and sales services to third-party publishers of interactive entertainment software, its own publishing operations, and manufacturers of interactive entertainment hardware. The company primarily operates in the United States, Canada, the United Kingdom (UK), Germany, France, Italy, Spain, Japan, Australia, Sweden, and the Netherlands.
Segments
The company operates its business in two segments: publishing and distribution. Publishing relates to the development (both internally and externally), marketing and sale of DVD, CD, UMD, online, and cartridge-based interactive entertainment software products owned or controlled by it directly, by license, or through its affiliate label program with certain third-party publishers. Distribution primarily refers to logistical and sales services provided by the company’s European distribution subsidiaries to third-party publishers of interactive entertainment software, its own publishing operations and manufacturers of interactive entertainment hardware.
Products
The company offers superheroes and skateboarding categories with its release of titles based on the Spider-Man and X-Men properties, and the Tony Hawk franchise. The company has also been successful in the first person action categories through the Call of Duty original intellectual property, which it plans on continuing as a successful long-term franchise. The company has established itself in the ‘value’ software publishing business with products under its Cabela’s, Rapala’s, World Series of Poker, and Greg Hasting’s Paintball licenses, and with products distributed on behalf of its ‘value’ affiliate label partners.
Hardware Licenses: The company’s products are being developed or published primarily for PS2, GameCube, Xbox, and Xbox360 console systems; GBA, PSP, and NDS hand-held devices; and PCs. The company is also developing products for the PS3 and Wii next-generation console systems expected to be released in calendar 2006. In order to maintain general access to the console systems and hand-held devices marketplace, the company has maintained licenses for PS2, GameCube, Xbox, and Xbox360 console systems and GBA, PSP, and NDS hand-held devices with the owners of each such platform.
Intellectual Property Rights: Many of the company’s planned releases are based on intellectual property and other character or story rights licensed from third parties, and a combination of characters, worlds, and concepts derived from its extensive library of titles, and original characters and concepts owned and created by it. In acquiring intellectual property rights from third parties, the company seeks to obtain rights to publish titles across various platforms, to include the ability to produce multiple titles and to retain rights over an extended period of time.
Publishing Activities
Marketing: The company’s marketing efforts include online activities, such as the creation of World Wide Web pages to promote specific titles; public relations, print and broadcast advertising, coordinated in-store and industry promotions, including merchandising and point of purchase displays; participation in cooperative advertising programs, direct response vehicles, and product sampling through demonstration software distributed through the Internet or on compact discs.
Significant Events
The company and Glu Mobile, Inc. have entered into a strategic worldwide partnership to develop an upcoming Call of Duty title for mobile phones. Through this exclusive agreement, Glu would create a future title in the critically-acclaimed Call of Duty franchise, giving gamers around the world a way to experience Call of Duty directly on their mobile phones.
GameLoft SA and Activision, Inc. have entered into a joint venture to offer Massively Mobile, a game development studio committed that would provide entertainment for mobile devices.
Sales and Distribution
The company primarily sells its products in North America, the United States, and Canada. The company distributes interactive entertainment hardware and software products in Europe through its European distribution subsidiaries - Centresoft in the United Kingdom; NBG in Germany; and CD Contact in the Benelux countries. These subsidiaries act as wholesalers in the distribution of products and also provide packaging and logistical and sales services. The company entered into the distribution business to obtain distribution capacity in Europe for its own products, while supporting the distribution infrastructure with third-party sales, and to its operations into the European market.
Affiliate Labels: In addition to its own products, the company distributes interactive entertainment products that are developed and marketed by other third-party publishers through its ‘affiliate label’ programs in North America, Europe, and Australia. The company’s affiliate label partners include LucasArts, and various affiliate label partners in its ‘value’ business. Each affiliate label relationship pertain to distribution in certain geographic territories, such as the North America, Europe, or Australia and may be further limited to specific titles or titles for specific platforms.
Marketing and Customers
The company through its distributors provides services to its publishing operations and to various third-party publishers, including Sony Computer Entertainment (Sony), Nintendo Co. Ltd. (Nintendo), and Microsoft Corporation (Microsoft). Centresoft is Sony’s exclusive distributor of PlayStation products to the independent channel in the United Kingdom.
North America – The company’s products are available for sale or rental in thousands of retail outlets domestically. The company’s North American customers include Best Buy, Blockbuster, Circuit City, GameStop, Target, Toys ‘R’ Us, and Wal-Mart. As of March 31, 2005, the company’s major customer is Wal-Mart.
The United States and Canada: The company’s products are sold primarily on a direct basis to mass-market retailers, consumer electronics stores, discount warehouses, and game specialty stores. The company sells its products to a limited number of distributors.
International: The company’s products are sold internationally on a direct-to-retail basis, through third-party distribution and licensing arrangements, and through its wholly owned European distribution subsidiaries. The company conducts its international publishing activities through offices in the United Kingdom, Germany, France, Italy, Spain, the Netherlands, Canada, Sweden, Australia, and Japan.
Competition
The company’s third-party software competitors include, Atari, Inc.; Capcom Co. Ltd.; Eidos PLC; Electronic Arts Inc.; Konami Company Ltd.; Midway Games Inc.; Namco Ltd.; Sega Enterprises, Ltd.; Take-Two Interactive Software, Inc.; THQ Inc.; Ubi Soft Entertainment; and Vivendi Universal Publishing. In addition, the company also competes with integrated video game console hardware and software companies, such as Sony; Nintendo; and Microsoft.
History
Activision, Inc. was incorporated in 1979.
