Activision bets on Destiny being massive hit to the tune of half a billion dollars
Activision is spending half a billion dollars on Bungie's Destiny with an eye on doubling its money and setting up a new franchise that it hopes will top games charts for many years to come.
The $500 million it has allocated to the game includes "marketing, packaging, infrastructure support, royalties and other costs" but is still seen as an enormous gamble on a new intellectual property by some. It is believed to be a record sum spent on just one game.
However, Activision has a 10-year contract with Halo-creator Bungie that gives the software publisher worldwide distribution rights and control over the franchise's development.
"If you're making a $500 million bet you can't take that chance with someone else's IP," said Activision CEO Bobby Kotick. "The stakes for us are getting bigger."
Analysts predict that Activision will sell eight million units of Destiny worldwide - far shorter than the 32.5 million copies of GTA V sold to smash records last year.
"It's a head scratcher," said Sterne Agee analyst Arvind Bhatia to Reuters. "For brand new IP, it's tough but it could post a big surprise."