During his hour-long — and highly quotable — presentation on Monday to the Deutsche Bank Securities Technology Conference in California, Kotick was asked by attendee whether he considered the gaming industry to be a hit-driven business.

"It is hit-driven business, but it's not as volatile as you would think," he said. "If you look at the top 10 products this year, eight of the top 10 products are based on franchises that were out last year and the year before that and the year before that.

"There's always been a confusion about the value of new intellectual property and also the difficulty of introducing new intellectual property. You still have the great challenge every year of innovating in your franchise, but one of the great benefits of having franchises is that you have a road map for innovation. When you are developing a new intellectual property from the ground up, you have to invent the story, the characters, the gameplay dynamics, and you're doing it without the benefit of audience knowledge.

"If you're really disciplined, as we are, about spending time surveying your audiences, you can take a lot of that knowledge — and the audience can give you a lot of guidance about what they want in their innovative new products. The pathway to innovation on a franchise is easier and better defined than it would be in something new.

"The companies that have proven franchises and have the discipline to leverage them are always going to do better and have a greater level of success. The single hardest thing to do in the video game business is to introduce new, original intellectual property and that's why it doesn't happen very often."

Who among us can deny that some highly innovative games were also sequels? Most games must be born without a number at the end of them, but Kotick makes a strong argument that when they get that numerical appendage, they get... better.

You can listen to the full Kotick presentation at the conference's official site. The quoted excerpt above begins close to the 42:00 mark.

Our wanderings had us walking through GDC Europe and all four of the show's halls, where we couldn't help but notice what we'd be seeing when the show opens to press tomorrow.

The biggest presenters at the show seem to be Activision Blizzard, Sony, Microsoft and Nintendo. Many of the booths were elaborate constructs featuring cars, plenty of screens and consoles, life-sized cutouts and at least one giant snowball.

Watch this vid for a taste of one of the booths, which included DJ Rapstar and Sony's booth.

Kotick made the comment during a conference call between Activision Blizzard executives and financial analysts yesterday to discuss the company's performance from April through June.

Kotick was quoted as telling an analyst that "I would raise the prices even further," a line that was interpreted to mean that he's ready to jack up game prices. (Destructoid provided Kotick a forked tongue for this one.)

What hasn't been as clear is what Kotick was replying to and the tone in which he offered his comment.

The question Kotick fielded involved the price of peripheral-bundled games like Guitar Hero and Tony Hawk Ride. It came from analyst Tony Gikas, according to a transcript of the call: "... if you don't mind, just your comfort level regarding pricing of some of your new games that have some expensive controllers and any feedback that you had from retail as we move through the holidays."

Company CEO Mike Griffith first fielded the price question, saying: "We've had for all of our launch titles in the back half of this year, some of which contain peripherals, as you point out, very strong retailer acceptance and support for all parts of our plan, including our merchandising plans, our marketing programs, and our price points."

Kotick responded, prompting laughter, with: "And Tony, you know if it was left to me, I would raise the prices even further."

I've asked Activision representatives to clarify Kotick's statement, to specify what price the company feels is ideal for games and what price Kotick would like to raise peripheral-based games to. I've not heard back yet, but if I do, I'll update the post.

The company reported $1.04 billion in revenue for the company's second quarter of 2009, ended June 20, 2009. Executives credited sales of franchises World of Warcraft, Guitar Hero and Call of Duty as well as new games Prototype, Transformers and Wolverine.

Testifying to the continued strength of World of Warcraft, company executives said that more than a third of Activision Blizzard's revenue from the past three months came from MMOs.

But the mega-publisher lowered its revenue expectations for the year, from $4.3 billion for 2009 to $4.05 billion. The 2010 delay of StarCraft II and the first-person shooter Singularity were blamed, along with lower retailer orders for upcoming games, a byproduct of a weak economy.

Activision chairman Bobby Kotick said he expects game sales to be "flat to down slightly in America and Europe" for the year. "We are very concerned," he said about the forthcoming holiday market. "There's a lot of reason to be concerned and cautious." Activision's line-up is strong, he said, but the market overall is facing a tough period with shoppers not as eager to buy new games.

Activision's big hopes for the end of the year are Guitar Hero 5, Modern Warfare 2, DJ Hero, Blur, Band Hero, Tony Hawk Ride and Marvel Ultimate Alliance 2.

The company's CEO, Mike Griffith said that, in addition to the delayed Singularity, now expected between January and the end of March, the company will publish new games in the James Bond, Tony Hawk and Spider-Man franchises. Griffith also promised tie-ins to Dreamworks movies Shrek 4 and How To Train Your Dragon. More mysterious was his reference to an unnamed "innovative property in the $4 billion action genre."

Later in the call, a financial analyst tried to get top Blizzard exec, Mike Morhaime, to clarify whether the delay of StarCraft II to 2010 would push back an anticipated 2010 release for the studio's Diablo III. The analyst recalled an earlier comment by a Blizzard representative that the studio would release a single major game per year.

"The move of StarCraft into next year does not impact the schedule," Morhaime said. "And so it would be correct to conclude that you could expect two releases of Blizzard for next year. But I would not make any conclusions on what those titles would be."

Activision also announced plans to offer "new releases" in the Call of Duty series next year, though how those releases will mix downloadable map packs for existing games and brand-new games was not specified.

The biggest change? Blaming the economy, the company lowered expectations for console sales in 2009 by one million units.

The day after Activision pushed back sci-fi first person shooter Singularity, Sterne Agee analyst Arvind Bhatia believes that the signs that StarCraft II will be ultimately be a 2010 title, according to a report from the Wall Street Journal.

We've already braced ourselves for the bad news, considering Dustin Browder, the game's lead designer, told us the developer needs four to six months of public beta exposure to get the game in tip-top shape. Still a possibility, as Blizzard released StarCraft: Brood War at the end of November 1998, but looking less and less likely as the days progress.

Blizzard has never officially dated the game, only saying the highly anticipated StarCraft sequel would be released when the game "meets our standards and the expectations of our players." And those expectations are, well, kinda high.

Activision Seen Delaying Two Big Games [WSJ]

But considering that we're already six months into 2009, a four to six month beta period is kind of cutting it close, if the game has any intentions of shipping this calendar year. Granted, Blizzard hasn't officially committed to that, but StarCraft II: Wings of Liberty is the company's best bet for a "front line release" this year. So... will it ship this year?

"It's getting there," Browder said, adding "We can still make four!"

While what we played at Blizzard's recent hands-on felt beta ready to us, we're obviously not calling the shots. Browder says that StarCraft II needs to be in the best possible shape before it gets its beta coming out party.

"Beta is extremely distracting for us," he said. "We're playing. We want to see what other people are doing. We need to fix bugs right now. The minute beta goes out, we lose a lot of efficiency."

"So, we don't want to be in beta for nine months."

Hey, neither do we!

Following the 2007 merger between Activision and Blizzard, the old Vivendi headquarters at 6060 Center Drive became redundant, closed as a cost-cutting measure to help streamline the massive new company. And it has remain a closed lot, until now.

Activision Blizzard has now granted a sublease with a company called Kiewit Pacific to occupy the space through February 2011. What does Kiewit Pacific do? Why, they are a design and development company of sorts, only instead of games, they design roads. Awarded part of a $950 million government contract, the company will use Vivendi's old digs while they work on the planned expansion of the 405 (San Diego Freeway) between the Santa Monica and Ventura freeways, an expansion that will have quite an impact on the commutes of local developers.

The Los Angeles Business Journal writes that the deal reflects a boom in government contracting and the state of the video game industry. I think it's just interesting that the space that once held Vivendi is being used in a project that will have such great impact on the area's development community.

Activision Blizzard pulled in $981 million in revenue in the first quarter of this year ending March 31. That's up from the company's projected $860 million (which happens to be the revenue rival EA earned in its last quarter).

"Our better-than-expected first quarter results were driven by strong global consumer response to the Call of Duty and Guitar Hero franchises and Blizzard Entertainment's World of Warcraft, despite challenging economic times," the company's CEO, Bobby Kotick, said in a statement.

Kotick claims Activision as the #1 third-party console and handheld third-party publisher in North America and as the top third-party for the Wii worldwide.

Among the highlights for Activision Blizzard's quarter were Wrath of the Lich King maintaining the top spot on the PC charts according to NPD and Guitar Hero's sales rising by 84% year over year in Europe according to Charttrack and Gfk.

Activision is bullish on its next quarter, which will see the release of Transformers and Ice Age games along with Prototype, the already-released Wolverine game and new Guitar Hero titles (Smash Hits and Modern Hits, for consoles and DS, respectively.)

The mega-publishers's current chairman - Rene Penisson - will be stepping down because his "mandate expires this year". His replacement, Jean-Bernard Levy, has been with Vivendi since 2002, and has been a director at Activision since the merger between the two companies last year.

In case you were wondering, current Activision "boss" (ie the Chief Executive) Robert Kotick is staying right where he is.

Vivendi CEO Levy to chair Activision Blizzard [Reuters]

"Global consumer response to the Call of Duty and Guitar Hero franchises and Blizzard Entertainment's World of Warcraft remains strong despite the challenging economic environment," said Robert Kotick, CEO of Activision Blizzard. "We exceeded our quarterly financial goals as the video game market continues to grow and our franchises continue to perform. This bodes well for our upcoming spring titles Transformers: Revenge of the Fallen, X-Men Origins: Wolverine and Ice Age: Dawn of the Dinosaurs, which are inspired by theatrical feature films releases, Prototype, a new intellectual property, and the release of Guitar Hero Smash Hits as well as continued sales of our recently released Guitar Hero Metallica game."

Kotick also took a moment to point out that they've penned a deal to transition the Chinese licensing of their money-making massively multiplayer title World of Warcraft to NetEase. That deal will also include licensing of Warcraft III and StarCraft II there as well.

Last fall, model Heidi Klum stripped down to shill Guitar Hero. This year? It's Victoria Secret model and Sports Illustrated swimsuit cover girl Marisa Miller. Klum is also a Victoria Secret model and SI cover girl. Hey, we're beginning to see a pattern here...

Also like Klum, it appears that Miller will be appearing in not only her skimpies, but her skimpies and her socks.

But beyond that, we're clueless due to the giant green screen — leaving everyone to fill in CGI from their brains.

Marisa Miller to star in new Guitar Hero Commercial [Banned In Hollywood via Netharuka]

Activision Blizzard's top publishing executive Mike Griffith told Bloomberg that the current economic climate is perfect for creating acquisition possibilities, whether they be game companies or intellectual property rights held by companies hungry to make a quick buck.

"The combination of Activision holding a fair amount of cash and presumably prices being depressed, not only for publicly traded companies, but also likely for new intellectual property licensing rights, should certainly create opportunities"

So who is on the menu? Griffith wouldn't say, but don't worry. Activision Blizzard didn't become the world's largest video game publisher by making rash decisions. "We won't rush to judgment just because we have cash. We will be very disciplined."

Activision Looks for Acquisitions Amid Recession, Griffith Says [Bloomberg]

According to Blizzard COO Paul Sams, the StarCraft II beta is likely just months away. Two months? Ten months? We hope it's not the latter, especially since we're counting on the first entry, StarCraft II: Wings of Liberty to hit sometime this year, if only for sanity's sake.

While Blizzard is cagey on locking down a date, Sams says that we'll get a taste of the next iteration of Battle.net when the StarCraft II beta goes public. Exactly what changes Blizzard will be adding to the online matching service that "support online tournaments, eSports, and enhanced communication between players" haven't been confirmed.

Activision CEO Bobby Kotick boasted that 2008 was the company's 17th consecutive year of growth, with operating income up 20% from the previous year. The company highlighted its publishing of two of the top-five best-selling franchises on the consoles across all platforms, Guitar Hero and Call of Duty, claiming it was the number one third-party publisher on Nintendo's Wii platform.

Similarly, World of Warcraft: Wrath of the Lich King was touted as the #1 PC title in North America and Europe for the calendar year.

Holiday quarter earnings were $1.2 billion, Activision Blizzard said. Thanks to being flooded with money, Blizzard Activision ended the year with $3 billion in cash and no debt.

Kotick said during a conference call that Activision Blizzard has "more products than ever before" planned for release in 2009, "a small minority of which will consist of a select few wholly owned, internally produced original intellectual properties."

It plans to launch new titles in the Guitar Hero and Call of Duty franchises, with new "properly vetted" intellectual properties such as the first-person shooter Singularity and music game DJ Hero in the calendar year.

CEO Bobby Kotick matter-of-factly spoke of the game, rumored to be handled by Activision's recently acquired FreeStyleGames and detailed first right here, on CNBC this week.

"We have this product called DJ Hero coming out later this year, which is a turntable that you actually can play competitively and spin discs and mix songs," Kotick said, looking frosty at the World Economic Forum in Davos, Switzerland.

Yeah. So, to sum up, Activision's making DJ Hero, it'll be out this year and it has a turntable controller. Doesn't get much more clear than that, kids.

Activision CEO: Nice To Have Cash [CNBC via Eurogamer]

According to a report from Edge Online, Stern Agee analyst Arvind Bhatia pegs WoW subscriptions as responsible for $400 million worth of Activision Blizzard's earnings per share. The mega-publisher is estimating $4.9 billion in revenue and $1.2 billion in operating income for the fiscal year. It will hold an earnings call on February 11th.

Analyst: WoW Made Up Half of Acti-Blizz Earnings [Edge Online]

Obviously, Prototype sounded pretty darn good in the THX stage room. It had better, if Activision's going to borrow demo room time from THX.

But we were more impressed with what was happening on-screen in Prototype, which follows the violent, sandbox-style adventures of superhuman amnesiac Alex Mercer. If you don't know the premise, Mercer wakes up, super-powered and pissed, determined to find out how he became blessed with the ability to turn his arms into blades and climb the walls of New York City's skyscrapers.

If you're looking for easy comparisons, Prototype looks to play like the hyper-violent bastard child of Crackdown, Spider-man and *gulp* State of Emergency. We were reminded of that last one because of the metropolitan beat 'em up chaos that permeates Prototype's version of the Big Apple — half populated by Infected humans and occupying Army forces.

What we saw at CES was a quick example of some of the game's missions, which can be accessed by GTA-style light columns. The mission, "Rolling Thunder," tasks Alex with killing as many enemies — infected or otherwise — with a tank under a time limit. Seeing Alex wreak havoc with tank shells on the zombie-like infected was exhilarating and packed with over the top violence.

We also saw Prototype's protagonist go on more free-form killing sprees, slicing up Infected with his razor sharp arms, crushing them with his "hammerfist" ability and blazing through them with an organic spiked shield.

Mercer also sprinted to the top of a New York skyscraper, switching quickly to a military disguise to avoid being spotted, then pulling down helicopters with a stretchy "whipfist" ability.

We got a peek at some of Prototype's other abilities, some in name only. These include muscle mass, armor, disguise, thermal vision, and infected vision skills.

While there's plenty of exciting action to be had in Prototype, Radical's Kelly Zmak told us a bit about the game's story telling tactics. Portions of the conspiracy-laden adventure will be told through traditional in-game cut scenes, with others pieced together bit by bit via absorbed memories — Alex can assume the identities and knowledge of the people he kills throughout the game.

Prototype looks far more promising — and frenetic — than I had personally anticipated. While it may not have blown me away graphically, the sheer amount of stuff packed on-screen impresses. It's slated for a Summer release and we look forward to going hands-on with the game as soon as possible.