Activision and Bungie Split. Huge news hit the world of video games last week as longtime partners Activision and Bungie announced they were calling it quits and that Destiny 2 would be going with Bungie on the way out.
The two companies announced their split in a joint statement that reads in part: “Today, we’re announcing plans for Bungie to assume full publishing rights and responsibilities for the Destiny franchise…Going forward, Bungie will own and develop the franchise, and Activision will increase its focus on owned IP and other projects. Activision and Bungie are committed to a seamless transition for the Destiny franchise and will continue to work closely together during the transition on behalf of the community of Destiny players around the world.”
Capping a series of chaotic weeks for Activision, the split of the two companies comes at a time when Activision’s stock is at an all-time low due to analyst pessimism about their business model.
Bungie and Activision are at odds over monetization
Demonstrating a remarkably different approach to in-game monetization, as well as a few controversial announcements like the Diablo mobile game, Activision and Bungie’s split is really not that surprising, especially when you factor in the persistent reports that the publisher was unhappy with Destiny 2’s performance.
Reports that state that Activision was unhappy with Destiny 2 might not be far off the mark. An official statement from Bungie even vaguely hinted at how much the company had learned from its experience with the Forsaken DLC: “With Forsaken, we’ve learned, and listened, and leaned into what we believe our players want from a great Destiny experience…Rest assured, there is more of that on the way. We’ll continue to deliver on the existing Destiny roadmap, and we’re looking forward to releasing more seasonal experiences in the coming months, as well as surprising our community with some exciting announcements about what lies beyond.” But for sure Activision and Bungie Split because of their differences.
Bungie became famous with Halo and worked with Microsoft.
Prior to partnering with Activision, Bungie was most well known for their work on Microsoft’s Halo series and, prior to that, for their production of the Marathon games on Mac computers. Marathon, for those who may or may not recall, was basically DOOM for Mac and a precursor in many ways to the types of games Bungie makes now.
Spinning off from Microsoft in 2007, Bungie continued to produce and market Halo games for their former parent company until entering into a 10 year publishing agreement with Activision in 2010.
This partnership spawned the Destiny series which premiered in 2014 and combined Bungie’s expertise at crafting amazingly detailed worlds and game mechanics underpinned with tight gameplay with Activision’s ability to manage massively multiplayer online games (Activision’s prior merger with Blizzard being one notch in their belt in this category).
From Bungie’s point of view, Activision not only provided them with this robust infrastructure but also allowed the company to keep any IP developed; hence, why Destiny 2 will be going with Bungie in the split.
The two parties have tried to put a happy face on the whole debacle but the press doesn’t seem to be dying down.
Bungie and Activision Slit and Investors are now Launching and Investigation.
To top it all, investors in Activision are now launching an investigation into the company for fraud due to the collapse in the stock’s value.
The Pomerantz Firm announced it would be representing a class of shareholders that will be looking into whether or not Activision’s “directors or officers” engaged in securities fraud according to Variety.
In a statement explaining their position, the law firm writes: “On January 11, 2019, the Company disclosed that it would be separating from its design and development partner Bungie, Inc. and that Bungie will assume full publishing rights and responsibilities for the “Destiny” franchise…Bungie had developed the ‘Destiny’ franchise with Activision as a publisher. In the first five days of the ‘Destiny’ franchise’s release, it sold $325M at retail. Following this announcement, Activision’s stock price fell sharply during intraday trading on January 11, 2019.”
The fraud here will likely be whether or not company execs sold the istock off at a higher value using the insider knowledge they have as company directors. In order to head off a steep decline in the value of their holdings that the split between Activision and Bungie would cause for ATVI, directors might have sold their shares and thus have committed a crime.
The Future after Bungie and Activision Split.
So where does all of this leave Bungie and its marquee property, Destiny 2?
After all, some people are naturally worried about continuity of service during the transition from Activision to Bungie alone. Per the original partnership agreement between the two companies, Bungie will retain sole ownership of the Destiny franchise and Activision will have no monetary stake in it moving forward.
Both companies have already stated that the transition process is well underway according to Variety.
And Bungie has reaffirmed its support for Destiny 2 and continued DLC in the near future.
Polygon’s Daniel Friedman is taking an especially pessimistic view of the future of Destiny 2 because of this split.
In his article “Bungie’s split with Activision may be bad news for Destiny 2,” Friedman states that Bungie’s celebrations of its split from the once dreaded company might be premature.
Bungie Launched Destiny 2 with a lack of incentives for hardcore players.
A lot of the problems many Destiny fans had with Destiny 2 when it first launched was the lack of incentive for hardcore players to stay engaged. Audiences perceived Bungie’s game as favoring casuals or, worse yet, those who pay to win through in-game monetization options.
Moving valued equipment and the like to a more casual or even monetized platform killed the spirit of the game, these fans argue.
Friedman thinks that they might be in for a rude awakening when it comes to Destiny 2 managed solely by Bungie. Anticipating a content drought for current fans, Friedman points out that this drought would coincide with metrics that reveal players who started Destiny 2 when it launched but quit shortly after have not restarted the game.
This was even addressed during Activision earnings call in November 2018 wherein ATVI exec Coddy Johnson blamed Destiny 2’s performance for its financial results according to Polygon.
Naturally, this didn’t sit well with the folks over at Bungie, with Destiny 2 game director Luke Smith responding that the dev was proud of the game it had made.
Part of Friedman’s argument rests on the perception that Bungie might want to start fresh now that it is out from underneath Activision’s shackles. But the company has reaffirmed it’s commitment to the future of Destiny 2 as outlined in their plans for the game.
Outside of that, it isn’t really know how long and how much support Destiny 2 will receive before Bungie inevitably moves on to something – and what no one exactly knows.
Bungie free from Activision
Free from Activision, Bungie could make another Destiny title or even return to help Microsoft with more Halo games. The road ahead is pretty open for Bungie, even if the future for Destiny 2 fans is not that clear.
Another aspect that Friedman highlights that few are considering is how many resources Activision had to throw at Destiny 2 as a project. To help Bungie along, the company even tasked developers Vicarious Visions and High Moon Studios to help out.
Adding insult to injury, Friedman also doesn’t think that the premium emotes and purchases players made for Destiny 2 while it was under Activision’s care will transfer over to the Bungie-owned game.
But what about Bungie itself? It is nice to talk about the future of a game but foolish to do so without consideration of the company that makes it.
Bungie recently secured a $100 million investment from Chinese company NetEase. The company claims this will allow them to publish their own IP as well as develop more original IP.
You might remember NetEase from another Activision-related scandal: The Diablo mobile game.
Fans of Bungie are concerned about the investment from this company because many people perceive its in-game monetization practices as unethical – even predatory.
Why would Bungie want money from this kind of developer? To get rid of Activision naturally, though some worry the true cost won’t be felt until sometime down the road.
On the bright side, Bungie’s newfound freedom could result in a renaissance in its games. Expectations that the current lifespan for Destiny 2 will be shorter than that for the original Destiny are not that far-fetched, but pronouncements of doom and gloom are a little histrionic at this point.