Call of Duty publisher has Middle East in its sights

Activision Blizzard, the world's second largest games publisher by revenue, is looking to the region for games acquisitions.
A scene from the video game Call of Duty: Advanced Warfare. Activision / AP Photo
A scene from the video game Call of Duty: Advanced Warfare. Activision / AP Photo

The games giant behind the US$10 billion Call of Duty franchise has the Middle East in its sights.

Activision Blizzard is looking to the region for possible acquisitions, the company’s chief executive and president Bobby Kotick said.

“We’re trying to move away from selling western games in non-western markets,” said Mr Kotick.

“If there’s a local company that’s well managed, has clear profitability, intellectual property or a specialised technology and is willing to move, we’ll buy it.”

Activision Blizzard is the world’s second-largest games publisher by revenue, having earned $4.3bn last year. The company’s Destiny game, published in September, earned $500 million from pre-orders and first-day sales.

“We make investments in companies that we think have enormous promise in areas where we don’t have special skills,” Mr Kotick said.

“That would include local and cultural context. If there’s a company here that has the ability to create and develop successful games for the market, we would certainly be interested in it,” he said. “We’re sitting on $5bn of cash. We don’t have any difficulty in accessing capital.”

The company has drawn lessons from its experiences in China that it hopes to apply to this region.

“Making western content for the Chinese market was not really going to be successful,” Mr Kotick said. So Activision used “local talent for voiceovers, local composers for music, and local coders for programming”.

Video game audiences “have a wide receptivity” and are “intellectually curious”, Mr Kotick said. “Gaming has the chance to become a dominant form of entertainment.”

The Middle East’s games industry is expected to grow from about $1.6bn this year, to $4.4bn in 2022, according to a report from the management consultancy firm Strategy& and Abu Dhabi’s twofour54.

Overall spending on media and entertainment in the UAE is predicted to increase at a rate of 14 per cent per year over the same period. About 31 per cent of the UAE’s population played video games as of 2012, the report said.

The region’s young population makes it attractive to games developers. People under the age of 34 account for 68 per cent of the population of the Arab world, according to the Strategy& report.

“There’s huge spending [on video games in the Middle East], and a very big mobile market with massive internet and smartphone penetration,” Amir-Esmaeil Bozorgzadeh, the chief executive of GameGuise, which localises western games for the Arab market, said this year.

“This market is big and it’s an exciting market because other markets have plateaued in size,” he said.

To foster a successful Arab games industry, the region needs role models, Mr Kotick said.

“In markets like this you need a local success ... if you want people to have hope and inspiration,” he said.

“Those kinds of successes are crucial to attract the technical talent to the market, instead of sending the best and brightest people from these markets to the US and western countries.”

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Published: November 19, 2014 04:00 AM


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