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Activision's $58 Million TV Promo Budget Could Double In 2014

Activision's $58 Million TV Promo Budget Could Double In 2014
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Activision (NASDAQ: ATVI) plans to spend $500 million on its newest franchise, Destiny.

This budget includes any and all aspects of the game, from development and distribution to packaging and global promotions. When Activision announced its budget, no one knew how much of it would be spent on the game's domestic ad campaign.

Now there might finally be an answer.

Over the past 12 months, Activision spent $58 million on national TV ads. Most of those funds ($53 million) were used between October 1 and December 30, 2014. Year-to-date, Activision has only spent $2.6 million advertising its games on TV.

Related Link: Will Destiny Be The Biggest Game Launch In History?

More 70 percent of the company's ads were dedicated to Call of Duty, a series that has collectively sold more than 180 million games across multiple sequels. By comparison, Take-Two collectively sold 141 million games in the Grand Theft Auto series. Unlike Call of Duty, Grand Theft Auto does not receive annual updates.

Activision CEO Bobby Kotick has said that he expects Destiny to become the best-selling new IP in history.

"If they spend nearly $60 million on one title, it's definitely conceivable that if they have two big titles coming up, the [ad expenditures] could potentially double," Sean Muller, co-founder and CEO of iSpot, told Benzinga.

iSpot is a real-time TV advertising intelligence platform that monitors the expense, frequency and success of TV ad campaigns. The company estimates that Sony and Microsoft will spend $120 to $125 million promoting video game hardware and software in 2014. Aside from the holiday shopping season, Muller said that Activision ran a campaign in August and September 2013, and another last March.

"But it definitely seems that they concentrate their dollars in the holiday season," he said. "I would say you could probably expect that pattern to repeat itself, so they probably are going to stay pretty quiet until the holiday season if this pattern continues."

Activision is likely to have a big ad campaign in August and September, however, to support the launch of Destiny.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Posted-In: Activision Bobby Kotick Bungie Call of Duty comments DestinySuccess Stories Tech Best of Benzinga


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