With Modern Warfare 2 pulling in $550 million in sales within the first five days of release, the $3 billion certainly makes sense. From the original Call of Duty right on up to one many of you are playing right now, more than 55 games have passed to gamers' hands, which might give Activision CEO Bobby Kotick's accompanying statement and speculation merit.

"Call Of Duty has become one of the greatest entertainment franchises of all time. If you consider the number of hours our audiences are engaged in playing Call of Duty games, it is likely to be one of the most viewed of all entertainment experiences in modern history."

Flush with the success of the launch, Kotick this week offloaded almost two million Activision stock options he'd held since 2000. When they were worth $1.03 each. In this post-Modern Warfare 2 world, however, they're worth around $11.50.

Want me to do the math for you? Subtract the $2 million strike price from the equation and Kotick earned himself just over $20 million. In less than a week.

Think he's an asshole? He can't hear you. His mansions are insulated with money.

Activision CEO reaps $20.2 million in three-day stock sale [GameSpot]

After chatting about the company's recent earnings, Fox Business guest host Charles Payne and Activision chief Kotick talked unemployment:

Robert Kotick, CEO, Activsion Blizzard: [Most] of our market is in their 20s or 30s.

Fox News host Charles Payne: That is a pretty hard hit spot right now. This is one of these unusual times when a lot of men, particularly men in that range have lost their jobs. Any chance that might impact your business?

Kotick: Well, look, I think that it's one of the profound challenges we face in our economy today and our country today. I think it is likely to affect every business. One of the nice things about video games is that it does give you the opportunity to escape from some of the difficulties in the day-to-day — in your day-to-day lives as you start to think about those challenges.

Whether it's "DJ Hero" or "Guitar Hero" or "Band Hero" or "Call of Duty: Modern Warfare 2," these are all products that give you hundreds and hundreds of hours of entertainment for good value.

Payne: Bobby, I put a few hundred dollars in your pocket too along the way. Congratulations and thanks a lot for coming on the show.

Out of work? Do you still play or buy games?

Activision Blizzard had kind words for the Guitar Hero and Call of Duty franchises, which apparently many of you bought over the last three months, helping Acti-Blizz zoom past its projected $700 million quarter. CEO Robert "Bobby" Kotick pointed to "positive audience response to Activision Publishing's Guitar Hero 5, Marvel: Ultimate Alliance 2, and the Guitar Hero and Call of Duty franchises, as well as Blizzard Entertainment's World of Warcraft."

The company also claimed that in September " sales of music games in the U.S. increased 72% in dollars year over year, which demonstrates the sustained interest in this new and important game category." So, nothing to worry about!

Kotick seemed similarly pleased with the company's expected ability to "deliver record non-GAAP operating margins based on the strength of the Call of Duty franchise and high consumer anticipation for Modern Warfare 2, which we project could be the largest entertainment launch of the year."

No one can deliver non-GAAP operating margins like these guys. No one.

Activision Blizzard Announces Better-Than-Expected Third Quarter CY 2009 Financial Results [Activision Blizzard]

Though always an industry mainstay, Activision didn't start to take its place front-and-center in the core audience's shooting gallery until years recent. It was theGuitar Hero and Call of Duty, franchises that became Activision's golden calves; early incarnations of those titles broke ground and dazzled audiences.

Then came the sequels, the sequels, and yet more sequels. As the publisher's stock soared (ticker: ATVI) its triumphant executive became a vocal and often controversial mainstay in the business press – and by extension, the gaming consumer press.

"Hating EA is so last year," CEO John Riccitiello told Kotaku at E3 in 2008, talking to us about what Electronic Arts had learned from its old ways of doing business – ways that look an awful lot like how Activision appears to conduct itself these days. All across the internet, it's clear: Gamers have crowned a new Evil Empire.

Who Is Bobby Kotick?

I, as a games biz reporter, have been given interview time with most major publishing execs more than once – most of them believe it's important to reach out to us from time to time as a way of reaching their consumers. I've never even been in the same room with Mr. Kotick. And while Activision is often responsive to media inquiries regarding its games, calls for comment on business articles or questions about the company itself – such as my request for info for this article – usually go unanswered.

But as an industry analyst, it's the job of Wedbush Morgan analyst Michael Pachter to check in regularly with top execs and get the info shareholders need to make investment decisions, so he's fairly familiar with the bombastic executive. "Bobby is friendly to a fault, funny, very smart, and quite engaging," says Pachter. "He is a bit flip, in an entertaining way, and I think it translates in print as cocky. I like him a lot, and think that his public persona has been twisted by the gaming media, making him into a ruthless factory head."

Kotick's "public persona" continues to raise eyebrows all on its own. Asked recently by an analyst on a quarterly conference call about the rising cost of packaged game software – bolstered, in no small part, by Activision's higher price points on peripheral-equipped games, Kotick said that "if it was left to me, I would raise [software] prices even further," and chuckled along with his execs.

Just a joke it may have been, but hardly a tasteful one in a recession, where cash-strapped consumers were likely to catch wind of his cavalier attitude. It's just one example why a wash of anti-ATVI sentiment pervades the comments sections and forums that impassioned gamers call home. Contrast that to Nintendo's stated promise to "keep people smiling," EA boss Riccitiello's common refrain that quality must precede profitability as a goal, and Take-Two chairman Strauss Zelnick's regular praise for his development talent on every quarterly investor call.

But Kotick's most recent round of cold talk was the most eyebrow-raising: he recently said his goal's always been to "take all the fun out making video games." As for the working environment at Activision? "I think we've definitely been able to instill in the culture the skepticism and pessimism and fear that you should have in an economy like we're in today."

The widely-publicized quote, delivered at an investor conference, was easy flamebait. Gamers' passionate nature and yen for controversy is part of what defines them as a community – and hating can be fun, as exemplified by this resulting parody song from IdleThumbs' Chris Remo, who says it's "based on the teachings of Kotick."

But what do Kotick's employees think, living in an environment of "pessimism, skepticism and fear"?

Nose To The Grindstone

"Kotick basically says that he was partially quoted out of context, and partially the humor of the situation at the time isn't conveyed in the quotations," says a level-headed employee of one of the publisher's internal studios, speaking under condition of anonymity. Infinity Ward's Robert Bowling also seemed to take it as a joke, if you recall his subtle riff on the snafu during a recent Modern Warfare 2 event.

Numerous Activision insiders who didn't want to be quoted said that Activision, as a corporate entity, treats them well – individual developers are more likely to encounter conflicts of studio bureaucracy on the development side rather than on the publisher-side, something of an unusual scheme of events in game development.

The high-pressure, goal-driven environment also means tensions across rival internal studios flare up more often, as we saw with the public spat between Infinity Ward's Robert Bowling and Activision producer Noah Heller, representing Treyarch's Call of Duty: World at War. Of course, the culture of achievement also means that prominent designers on projects like these drive very, very nice cars, we're told.

Our source has never himself met Kotick, but says he's heard little ill of him – he compares what he hears to "people who know Bush, where despite what you think about his policies, they all seem to think he's a cool guy to sit around and have a beer with."

The Bad Behavior

Industry sources say, though, that other gaming companies don't feel quite so positively toward Kotick – in particular, that such a cash-flush company is leaving it up to the others to shoulder the collective cost of piracy protection and first-amendment lobbying via their Entertainment Software Association dues. That is a point of contention.

Activision was the largest publisher to defect not only from last year's E3, but from the ESA – the trade body that represents the interests of all game developers. And while this year, the publisher returned to E3, it still won't rejoin the ESA: "We have our own issues that are not the industry's issues," Kotick has said.

But Activision is part of the industry – so as much smaller publishers manage their pricey ESA dues to support pro-industry lobbying and public awareness campaigns, Activision, one of the world's wealthiest, is sitting out its share. And that decision is viewed in a poor light by other companies.

Also worrying is Kotick's pattern of levying lawsuits against the defiant. Activision dropped gamer-darling Brütal Legend, from its publishing slate in the Vivendi merger because the eagerly-anticipated title, plus other Sierra games, "lacked the potential to be exploited every year on every platform," as Kotick said at the time.

But when EA picked up the game, Activision sued – a move an EA spokesperson now-famously likened to "a husband abandoning his family and then suing after his wife meets a better looking guy." ("Hey, if Activision liked it, then they should have put a ring on it," chimed in creator Tim Schafer.)

Under Kotick's stewardship, Activision seems to be developing a propensity for the sort of legal challenge that makes it look like a bully. There's also the imbroglio over turntable games, when Activision bought embattled developer 7 Studios — who'd been working on Scratch: The Ultimate DJ for Genius Products. Genius now alleges Activision levied its legal muscle and some "unsavory business practices" to delay a possible rival to its own turntable-equipped DJ Hero. Activision mantains its involvement with 7 Studios provides the developer with much-needed financing, and that Scratch had fallen behind in production well before its acquisition.

A Culture Of Cash

Pragmatic gamers may not like Activision or Kotick's ways, but will assert the man's just doing his job and doing it well: The games industry is still a business, after all. He has, at least on the books, earned some compliments – and mad money to go with them. The 46 year-old Kotick has helmed Activision since 1991, and in 2007, the NPD group pegged the publisher as the industry's biggest. Activision's 2008 saw four consecutive quarters of revenue growth – and that same year, Forbes says Kotick earned $15 million for his work. That's twice what EA's John Riccitiello made as head of Activision's nearest rival.

And when he's not running the game industry's newest and biggest Death Star, evidence suggests he might not be such a bad guy. He participates in charitable organizations as a member of the Board of Trustees for The Center for Early Education, chairs the Los Angeles County Museum of Art and is a member of the Board of Directors of the Tony Hawk Foundation – making his game franchise figurehead happy, sure, but the Foundation also puts skate parks in disadvantaged communities.

Nonetheless, Bobby Kotick doesn't seem to care what gamers think. Should he? Pachter points out that when "the old" EA was churning out content with less attention to quality, the resulting gamer backlash did, in his opinion, injure the company's bottom line.

"The argument about consumer fatigue and lower product quality is sound," Pachter concedes. "There is only so much innovation that can occur, and annual games are less likely to be innovative than bi-annual or tri-annual games." It's possible that Activision's business strategy and public persona may one day come home to roost, as it did for EA.

Until then, what can gamers do? Not buy Modern Warfare 2, the holiday season's most-desired title?

...Yeah, right.

[Leigh Alexander is news director for Gamasutra, author of the Sexy Videogameland blog, and freelances reviews and criticism to a variety of outlets. Her monthly column at Kotaku deals with cultural issues surrounding games and gamers. She can be reached at leighalexander1 AT gmail DOT com.]

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.

Speaking at the Deutsche Bank Securities Technology Conference in San Francisco yesterday, Kotick said "The goal that I had in bringing a lot of the packaged goods folks into Activision about 10 years ago was to take all the fun out of making video games."

Think he knows people outside the room will be reading this kind of stuff? Course he does. He just doesn't care.

Activision games to bypass consoles [GameSpot]

Speaking at the Deutsche Bank Securities Technology Conference in San Francisco earlier today, Activision boss Bobby Kotick has told attendees to "expect many of our products to be playable independent of a console", with the company particularly impressed with the potential of streaming services such as OnLive.

That and cereal box Guitar Hero.

Activision games to bypass consoles [GameSpot]

The Activision Blizzard CEO's comments, as reported by GameSpot, will probably dash any hopes of a StarCraft or Diablo brand MMO. And that comment backs up what Blizzard COO Paul Sams recently said, that the unannounced online game will be "significantly different" from the World of Warcraft experience.

So far, Blizzard hasn't said much about what the unannounced MMO is, instead focusing on what it's not. It's not one of the developer's already established franchises. And it's not based on any pre-existing Blizzard lore.

What we do know is that Blizzard is hiring. We just hope it doesn't divert any more attention away from StarCraft II and Diablo III. Broad appeal is great and all that, but we're growing impatient.

Blizzard's next MMOG to have 'more broad appeal' [Gamespot]

That may be because his company is sitting on some of gaming's biggest franchises—Call of Duty, World of Warcraft, Guitar Hero—or that Kotick's just a little power hungry. But he tells Barrons, "I view the medium as having the potential to eclipse film and television." And quickly. In five years or so.

Bob may have a point. Much has been made of the decline of television viewership in favor of other distractions, including the internet and video games, both of which can take away valuable screen time from Hollywood's cinematic and televised offerings. Plus, the TV doesn't even have a snazzy plastic peripheral one can play with.

Well, with the exception of the TV remote.

Game-Changing Hero Is Poised to Rule [Barrons]

In an Aug. 13 profile run by the respected news magazine, Kotick responded to a reporter's question about milking IPs with:

A small segment of very vocal gamers say everything has to be new and different every year. Actually, people are happy with existing franchises, provided you innovate within them.

It's the kind of response that makes both Kotick's position and the criticism pretty fair. Call of Duty? Modern Warfare absolutely was innovative, and has earned its shot for another go around. Guitar Hero? Re-skinning the game with a new band every quarter, more or less, is gonna be called for what it is.

But Activision, and other publishers, do face a Catch-22 of sorts. Create the game of the year, or close? Not only would you be foolish not to consider a sequel, the same hardcore complaining about sequels will be right in line to snap it up. And then you get beaten over the head for having a bunch of 2s and 3s and 4s in your catalog. But, that's why they pay you the big bucks.

Activision: People Prefer Sequels to Original IPs [Game Stooge]

According to your-source-for-other-people's-salaries Forbes, his 2008 salary breaks down like this:

Thrilling stuff.

It must be hard to tell developers to make new Guitar Hero, Call of Duty and, now after the Blizzard merger, World of Warcraft games.

We're really not sure how Kotick manages. Letting rocker action game Brutal Legend surely cost Kotick sleepless nights. That's why they pay him the big bucks! All fourteen million plus of them.

Robert Kotick Profile [Forbes via GoNintendo via VG247]

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.

On top of developing StarCraft II, Diablo III and whatever World of Warcraft expansion(s) the developer is cooking, Blizzard is adding "social networking features, cross-game communication, unified account management" and more to the new Battle.net.

Mike Morhaime, president and a co-founder of Blizzard, says that the revamped Battle.net will let players "connect, communicate and share experiences with each other [...] regardless of which Blizzard games they are playing."

Activision boss Bobby Kotick says the cross-game service will be "similar to Xbox Live," wording that may send a chill down the spine of those wary of plans to monetize Battle.net.

Morhaime says the service will be integrated more tightly with StarCraft II than any previous Blizzard game.

Sony honcho Howard Stringer then retorted that a price cut would cause the company to lose money on every PlayStation 3 sold.

Now BioWare co-founder Greg Zeschuk has entered the fray — adding his two cents. "I think it's silly to be saying you're not going to support Sony," says Zeschuk. "The brand itself is still huge and there are millions of [users] out there."

Bobby Kotick is not only the CEO and President of Activision, he also says silly things.

BioWare: Activision PS3 comment "silly" [CVG] [Pic]

Responding to Kotick's threats that Activision may "stop supporting" Sony consoles, Stringer says "He likes to make a lot of noise. He's putting pressure on me and I'm putting pressure on him. That's the nature of business."

Stringer was equally blunt to anyone else banging on about the price of the PS3, telling a Reuters reporter asking about the logic of not cutting the console's price "I (would) lose money on every PlayStation I make — how's that for logic."

No need to get so touchy, Sir Howard. It's not your fault. Just blame Ken Kutaragi! Problem. Solved.

Sony CEO dismisses price cut chatter on PlayStation [Reuters]

Speaking with The Times, Kotick said "I'm getting concerned about Sony; the PlayStation 3 is losing a bit of momentum and they don't make it easy for me to support the platform. It's expensive to develop for the console, and the Wii and the Xbox are just selling better. Games generate a better return on invested capital on the Xbox than on the PlayStation".

Subtle. But wait. It gets subtler.

"They have to cut the price, because if they don't, the attach rates are likely to slow", he continues. "If we are being realistic, we might have to stop supporting Sony...When we look at 2010 and 2011, we might want to consider if we support the console - and the PSP [portable] too".

In that absolute worst-case scenario, that would mean no Call of Duty for Sony consoles. No Guitar Hero for Sony consoles. No Tony Hawk, either. It probably won't ever come to that, of course, but Kotick's words are still worth noting. After all, when was the last time you ever saw a third-party publisher so openly threaten a major platform holder?

Sony should beware - Activision chief is not simply playing games [The Times] [Image: Elliott Erwitt]

Speaking to Bloomberg news, Kotick said he was "disappointed not to see any sort of aggressive price cutting," at E3. "Of all the things that the hardware companies need to be doing right now, it's recognizing the difficulties of the economy and pricing their hardware appropriately."

To be fair, others - such as GameStop CEO Daniel DeMatteo and Electronic Arts boss John Riccitello - have made the same argument, that console price cuts would spur gamer growth and thus greater game sales.
But the point assumes that all or most gamers have to buy consoles to buy new games. I'll offer myself as an example: You see, both my 360 and my PS3 were purchased before the crash, and before I lost my (full-time) job. So, they're paid for, and the current price of a console has zero to do with whether I buy a game for it.

Know what would? How about price cuts to the games that go on them. The games Activision makes and GameStop sells, for example. Because I haven't bought one since December.

Activision Criticizes Console Makers for Resisting Price Cuts [Bloomberg via Edge]

Of that 60, Kelly sold $42 million worth, while Kotick "only" made $17 million from ditching some of his stocks. Stocks in the company he, and Kelly, run.

Now, there could be a perfectly logical reason for this. Something their accountants and financial planners told them to do to make some kind of tax break or something. But it's more fun to (wildly) speculate that, with Activision stocks up 30% since January, they're making hay while the sun shines, selling off stock now before it dips again later in the year.

And what happens later in the year? Two of Activision's biggest games - Tony Hawk: Ride and DJ Hero - are expensive products, shipping with costly peripherals, and neither is a guaranteed success.

Activision Boss Bobby Kotick Sells Again—This Time It's For $17M [TBI]

So just what does Activision boss Bobby Kotick see when he gazes into his crystal ball? All was revealed as part of the company's earnings conference call earlier today.

He sees 8 million Xbox 360's being sold in North America and Europe combined. He sees...8 million PlayStation 3's being sold. Convenient! And towering over both is the Wii, which the company thinks will sell a further 16 million for the year.

Combined with a forecast 21 million handheld sales - which they declined to divide between DS and PSP - that's a lot of consoles. A lot of consoles to release Guitar Hero and Call of Duty on.