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Top of his game
Aug 13th 2009
From The Economist print edition
Bobby Kotick of Activision Blizzard has helped the video-game industry grow up
Bloomberg
LIKE many teenagers, Bobby Kotick was drawn to video games when they first appeared in the 1970s. He
had an Atari, with its chunky plug-in cartridges and blocky graphics, and he liked to play “Defender” at the
arcade. The young Mr Kotick also had an entrepreneurial streak: he sold bagels and soft drinks to people
waiting in line for petrol during the 1979 energy crisis. How appropriate, then, that he has ended up as
the boss of Activision Blizzard, the world’s largest publisher of video games.
So did Mr Kotick and the industry grow up together? Not quite. It would be more accurate to say that Mr
Kotick was one of the people who helped the chaotic games business grow up, by applying a more
rigorous approach to management. Many gamers dislike him, complaining that his bean-counting
approach stifles creativity. But there is no denying his ability to get results: earlier this month his firm
reported impressive sales and higher than expected profits of $195m for the three months to June.
Mr Kotick’s big break came in 1983, when he was a student at the University of Michigan. He was about to
leave for New York to meet potential investors in a firm he was setting up to make software for the Apple
II computer when he met Steve Wynn, a casino tycoon, at a party. Mr Wynn was also heading to New
York and offered Mr Kotick a lift in his private jet. “I went with him on the plane, and asked him how he
got started,” Mr Kotick recalls. Mr Wynn explained that early in his career he had been helped out by E.
Parry Thomas, a legendary Las Vegas banker, who helped finance Mr Wynn’s takeover of the Golden
Nugget casino. Mr Wynn had promised Mr Thomas that he would, in turn, give a helping hand to a young
entrepreneur some day. He offered to invest in Mr Kotick’s new company, and ended up writing him a
cheque for $300,000. Mr Wynn became his mentor, and was involved in 1991 when Mr Kotick took over
Activision, a failing games publisher founded by former Atari employees.
The problem with the video-game industry at that point, says Mr Kotick, was that it lacked discipline. “We
needed a balance”, he says, “between people who would be creative and entrepreneurial, and people who
knew processes.” He brought in managers from packaged consumer-goods firms, including Procter &
Gamble and Pepsi, to oversee the development of new games and to provide expertise in consumer
testing and marketing. But he realised that it was also important to maintain a creative environment for
designers. “In our business the key is that certain things lend themselves well to process, and certain
things don’t,” he says.
Through both growth and acquisitions he built Activision into a gaming giant. Today it is known for the
“Tony Hawk” skateboarding games, the “Call of Duty” series of military shoot-’em-ups, and its “Guitar
Hero” games, in which players must press buttons on a plastic, guitar-shaped controller in time with
blaring rock music. Each of these is a brand in its own right and has spawned numerous versions and
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