John Paczkowski

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Guitar Hero IV: Bobby Kotick, Chairman and CEO of Activision

Robert Kotick

Since 1991, Bobby Kotick has been running Activision (ATVI), in which he bought a controlling interest when it was an insolvent video-game company in 1990. The witty Mr. Kotick has since built the company into one of the industry’s largest, with net revenues of approximately $2.7 billion. That is due to some of its well-known franchises, especially its hugely popular Guitar Hero, as well as Call of Duty, Spider-Man, Shrek and the Tony Hawk series.

More importantly, Activision turbocharged itself when it merged this past year with Vivendi Games, which includes Blizzard Entertainment’s World of Warcraft, one the most popular multi-player games. He is also on the board of Yahoo, which we will ask him about even if he won’t comment. EA’s hostile acquisition bid for Take Two will doubtless figure prominently in today’s conversation as well.

  • Kara Swisher takes the stage to introduce Bobby Kotick, who will debut Guitar Hero IV.
  • Kara asks: What was the impetus for the transition to online gaming, the Blizzard deal? Kotick says we’re seeing a transition from solitary to social gaming that’s been enabled by connectivity. Notes that World of Warcraft had an enormous amount of expertise in creating massive, persistent multi-player universes. We realized we couldn’t get into that realm without the Blizzard deal.

    Robert Kotick at D6

  • What are you trying to do to get people into gaming? How are you extending it from male teenagers to other demographics? Kotick says story and character development is key here. And the higher production values of games today, their feature-film quality, drives increased interest. Interactivity is also important. “The social element has really transformed the gaming experience.,” Kotick says. “It’s really driving a new audience to embrace gaming.” Kotick notes that Nintendo’s Wii and its unique gestural controller has drawn yet another new audience to gaming. He cites the Guitar Hero phenomenon.

  • Where is immersive gaming headed? Kara asks. How will it evolve? Kotick says physical interface is becoming more important, but feels that a truly immersive, “Minority Report”-style experience is quite a ways off. The next generation of consoles, perhaps.
  • What do you think about social gaming? Kara cites Scrabulous, for example. Kotick responds that the more a consumer has a positive experience in gaming–whether it’s online or on the TV–the better it is for the gaming industry. As people become more comfortable playing games online, we’ll see gaming moving to the set top.
  • Are there new business models emerging in gaming as it becomes more interactive? Kara asks. Kotick notes World of Warcraft’s success and the developing market for virtual goods. Once you figure out how to make gaming compelling online, he says, there will be successful models to accompany them.
  • Discussing the challenge of the set-top box, Kara asks: What’s going to drive people into the living room? It’s not going to be search, Kotick replies. It’s not going to be Microsoft Word. It’s going to be entertainment, it’s going to be gaming.
  • Kara asks about the in-game violence issue. What about storytelling? Kotick: We try to stick to violence against small animals. Most of our users are over 18, they go to R-rated movies and we need to to cater to that preference. We are a broad-based medium today and we must appeal to as many demographics as we can. Part of that demographic audience enjoys in-game violence, and that includes gratuitous violence.
  • Kara asks about new competitors in the market. Kotick says that like the film industry, the cost of entry is prohibitively high.
  • So, Kara wonders, how does a company like Yahoo get into online gaming? Kotick essentially says it doesn’t.
  • Kara: Bobby, as a Yahoo board member can you tell me exactly what’s going on with this Microsoft situation?
  • Kotick: I tried to get Jerry Yang, Steve Ballmer, Sue Decker and Bill Gates to play Guitar Hero, but they weren’t interested.
  • Moving on to the Guitar Hero World Tour demo, which is a multi-instrument game–guitar, bass, drums. Kotick says the game allows you to create and publish your own music.
  • Apparently, the demo involves a “contest” and “a celebrity judge” … who could it be?
  • Oh look, it’s “America’s favorite judge” Paula Abdul. Brace yourselves, folks. This could get ugly.

    Paula Abdul

  • After a bit of patter, Abdul heads out into the audience to find a few attendees to demo the game. Crowd collectively braces itself for Abdulian hijinks …
  • Four guys dragged up onstage to play a Lenny Kravitz song, among them Skateboarder Tony Hawk. Remainder of audience appears ecstatic that they weren’t chosen to participate.

    Guitar Hero IV demo

  • Wince. “Hero” really isn’t the best word for the performers on-stage. “Horribly embarrassed” might be, though.
  • Demo concludes. A bit of wrap-up patter and the session ends.

For more coverage, see The Wall Street Journal and Barron’s Tech Trader Daily.

A note about our coverage: This live blog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations expeditiously written and posted to the Web as quickly as we were able. It was not intended as a transcript and should not be interpreted as one.

Robert Kotick Session Photos

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