TFB & Skylanders Praised in Activision’s Q3 2011 Earnings Report


Eric Hirshberg: “They’re not toys; these are superheroes they’re alive inside!”

Even though I am not a financial expert, I occasionally skim through Activision’s annual and quarterly for things that I may find interesting. The purpose of these reports are to show investors how much profit is being made and what their expectations for the future are. Needless to say, Activision is clearly making high profits. In this year’s report for the third quarter, Skylanders is mentioned multiple times, and Bobby Kotick gives a shout-out to Toys for Bob.

“…our industry-leading capability to develop original, globally-appealing innovative intellectual property, which we do exceptionally well, continues with Skylanders.”

“Also, with respect to industry firsts, I want to thank everyone at our wonderful studio, Toys for Bob, for all their inspired work on Skylanders. The game has received outstanding critical response, and although it’s early in the quarter, so far Skylanders is performing ahead for our expectations.”

“Modern Warfare 3, Call of Duty Elite and Skylanders are all extraordinary examples of how we continue to redefine entertainment around the world.”
-Bobby Kotick, Activision-Blizzard CEO

“Inventories of $207 million increased sequentially ahead of the Skylanders launch…”
-Thomas Tippl, Activision-Blizzard COO/CFO

“…we put a tremendous amount of passion, imagination and innovation to the creation of Skylanders and the result is the world’s first truly cross-platform game, which brings the world of toys, video games and the Web and mobile together like never before.”

“…in the West, the markets of toys is actually bigger than the market for video games. The franchise like Skylanders, which brings these 2 audiences together, represents significant opportunities.”

“…Skylanders is already on many of the most influential list for the top toys of the holidays including the Toys ‘R’ Us Holiday Hot Toy List, the Toy Insider ‘Hot 20 List’ and Time to Play’s ‘Power Ups’ holiday toy list.”

“…our retail partners have embraced Skylanders as though we’re an established franchise, giving us unprecedented shelf space and store presence.”

“…reviews have been incredibly strong, especially for a kids title. Gamers received an average 87 ranking across 5 platforms according to GAMESMagazine.com and my favorite are some of the reviews from the hard-core gamer press who really seem to love it.”

“…the game is performing ahead of our expectations in both starter pack sales and the sale of individual toys. As of today, there are already millions of toys in the hands of children around the world.”

“…after only a few weeks in the market, literally all of our major retail partners across all territories have already placed reorders.”

“So in summary, this year, we have delivered innovation with both Skylanders and Call of Duty: Modern Warfare 3 and Call of Duty Elite, which are firsts for the industry.”

“…in terms of Skylanders, we’re not going to discuss exact attach rates but it is — we can say that it is higher than we expected.”

– Eric Hirshberg, Activision Publishing CEO

Conclusion

It is clear that Activision is continuing to make lots of money. They are the largest third-party publisher in the world. Even though Skylanders is completely different from what we were expecting before their announcement, it’s has been very successful. The combination of TFB’s creative control, younger target audience, fascinating toy collection elements and Activision’s strong marketing campaign made Skylanders far more successful than anyone could have imagined. After listening to Activision’s report, I almost forgot about the developers who were closed down or downsized because of unsuccessful games. Regardless of the video game politics, TFB is clearly here to stay and they are still growing in size. Because of this success, their relationship with Activision is stronger. It’s nice to hear that Kotick gave them a shout-out in the report in addition to the remark he made in an older interview that he was the one who gave TFB additional time during it’s development. Eric had the most to say about Skylanders because he is directly involved in publishing the games.

This is essentially the American equivalent of Pokémon. The collectible toy market is going to have stronger competition now and there will definitely be a sequel. If TFB isn’t working on Skylanders 2 as their next project, the TFB guessing game continues…

Links

Activision’s Q3 2011 Earnings Report

One Response to “TFB & Skylanders Praised in Activision’s Q3 2011 Earnings Report”

  1. [...] gaming functionality, the Skylanders example could be illustrative, as Activision did quite well financially with the model.  "Smart objects" with NFC chips built in could become more widely [...]

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