Bobby Kotick of Activision, Drawing Praise and Wrath

Mr. Kotick, the C.E.O. of Activision Blizzard, the world’s largest video game publisher, inspired a stocky, auburn-haired character named Money Sack, who, in a game created by a competitor and a former employee, wields a wide grin and an automatic weapon. In another video, Mr. Kotick pops up from behind a fortified wall, and in a husky, ominous voice says he’ll set the price of his biggest game, Call of Duty, to “your soul” — a dig at its cost. Then fiery lasers shoot out of his eyes, wreaking havoc on an apocalyptic fantasy world. In several online photographs he is depicted as the Devil, with red horns against a Hades-like background.

On this particular Sunday, it’s those Photoshopped horns that really irk Mr. Kotick. He is seated at a corner table in the cavernous breakfast room of the Pierre hotel, across the street from Central Park, shaking a leg nervously and whispering in a conspiratorial hush.

“Think about what it’s like for my dating life when the first picture that comes up is me as the Devil,” says Mr. Kotick, who is recently divorced. “You see all this chatter and you realize that they game the search results. These super-sophisticated 19-year-olds are smarter than our expensive P.R. firm.” (His publicist, Steven Rubenstein, shrugs sheepishly.)

Mr. Kotick, 49, has reason to be annoyed. Not since the music industry’s heyday has there been a business with such a wide disparity between the popularity of its products and its customers’ perception of the chief executive who made those products possible. Video games are among the most successful segments in the entertainment industry, and the disdain heaped on Mr. Kotick in video game blogs is second only to the admiration for him on Wall Street.

He bought the company that is now Activision in 1990, when it was nearly bankrupt and when analysts dismissed video games as fads. But in his 22 years as C.E.O. he has built Activision into a company with a stock market value of $12.7 billion, almost three times that of its top rival, Electronic Arts.

Mr. Kotick isn’t the most technology-driven executive. (He still prefers a BlackBerry.) And he doesn’t get into the weeds of creative storytelling; he leaves that to the studios Activision has acquired. But like David Geffen, who never played a musical instrument well but signed Bob Dylan, Joni Mitchell and the Eagles, Mr. Kotick has a knack for identifying hit after blockbuster hit. He wakes up each day thinking about those hits — some would say obsessing about them — and how Activision can lavish games like Call of Duty, Diablo and World of Warcraft with ever more bells and whistles to keep customers happy and ensure that the next release is a big success, too.

The latest edition of Activision’s biggest game, the shoot’em-up megahit Call of Duty: Black Ops II, was released Nov. 13 and had sales of $500 million in its first 24 hours and more than $1 billion in the first 15 days. That fell short of some analysts’ expectations but was nevertheless more than the total domestic box-office revenue of “Avatar,” the highest-grossing movie of all time.

BUT expensive, immersive games now face a challenge as free online games from companies like Zynga and Rovio compete for users’ attention. Retail sales of video games in the United States totaled $7.5 billion from January to October, down 26 percent from the same period in 2011, according to the NPD Group.

In response, Activision is doubling down on a handful of games with high margins. The strategy is to have customers pay $60 or more to traverse for hundreds of hours through story lines with orchestral soundtracks and realistic, hologram-like heroes and heroines. With each new version “we need more resources, more time, and our development schedule has to get longer,” Mr. Kotick says. “How do you make the games better each year?”

Developers of Call of Duty took the risky step of bringing the mostly historical war series into the not-so-distant future of 2025. David S. Goyer, co-writer of the story for “The Dark Knight Rises,” was a co-writer on the story for the latest Call of Duty. Trent Reznor, the Nine Inch Nails singer who won an Oscar for the soundtrack of “The Social Network,” did the theme song. Oliver L. North served as an adviser for the game, which features a virtual David H. Petraeus, the former Central Intelligence Agency director.

The Activision strategy relies heavily on the holiday season. “This is a nail-biting time for us,” said Brian G. Kelly, Mr. Kotick’s longtime business partner, who is co-chairman of the Activision Blizzard board.

In the three months ended Sept. 30, Activision exceeded analysts’ expectations and increased its earnings by 53 percent, to $226 million, or 20 cents a share, even as video game console sales declined slightly.

Article source: http://www.nytimes.com/2012/12/16/business/bobby-kotick-of-activision-drawing-praise-and-wrath.html?partner=rss&emc=rss