E3 2011: Activision Publishing CEO sounds off on Wii U, Vita, and Call of Duty: Elite

LOS ANGELES--At this year's Electronic Entertainment Expo Sony, Microsoft, and Nintendoall held major press events. So did two major third-party publishers: Ubisoftand Electronic Arts.

However, the biggest third-party publisher, Activision, didn't stage a media event. It was the third year running the company didn't hold a traditional press briefing, although it did tease some games during a star-studded concert at E3 2010. The company did have a massive booth in the Los Angeles Convention Center's South Hall, which loudly promoted Call of Duty: Modern Warfare 3 and Call of Duty: Elite, Modern Warfare 3's controversial online service.

One of the executives in charge of Activision's E3 push is Eric Hirshberg, CEO of Activision Publishing. (Not to be confused with his boss, Activision Blizzard CEO Bobby Kotick.) A former ad man at Deutsch/LA, Hirshberg is relatively new to his job, having been hired just last July. However, he's not a stranger to the game industry, since his former agency had Sony's PlayStation brand as a client.

To discuss E3, the state of the industry, the PlayStation Vita, the Wii U, and all the latest in Activision, GameSpot caught up with Hirshberg in a sleek, secluded meeting room far away from the din of the show floor.

GS: My biggest question is with Activision being the number one publisher in the world, why don't you guys have a press conference?

EH: Well, sit tight. Watch this space. The honest answer to that is that we had to make some tough decisions early in the year, you know. We made a decision to walk away from some games that were in production, and we thought it was really important for us to be here and be a part of the community and have a booth, be on the floor, and not be the black sheep or the outlier. We all thought it was important just to be here and be among our industry peers and participate.

GS: So you didn't feel that it was worth it having the press conference?

EH: Well, there's several things about the way we approached our booth that I think are mini press conferences. Throughout the day, we're having these events that really present the games in a pretty theatrical way. We have three sort of persistent rooms where we're going deep into the properties. And it's kind of reflective of our approach overall of putting more focus into fewer games.

GS: Do you think E3 is as important now as it was in years past?

EH: You know, here's how I'll say it. I think that I have an interesting perspective on the transition that this industry is going through because I went through it in my last industry. I have a little bit of a masochistic knack for joining industries at great moments of disruption and turmoil, and when I joined the ad business, essentially, it was right at the foot of the Internet becoming a consumer-facing medium. There wasn't a day that I worked in advertising when I didn't read an article somewhere about the death of the 30-second TV commercial and the death of the media landscape as we know it. It was very disruptive to a media landscape that had been stable for 50 years.

GS: Right.

EH: And the fact is that the prognostications of the "sky is falling" were wrong. The media landscape as we knew it never died. It still hasn't. What did happen is that a whole bunch of new creative tools got added to it and made old media more powerful and new media became a new tool to communicate in more creative ways.

So, I have a little bit more calm about what's happening to the game industry right now than a lot of people. You could remove the word "console" and put in the world "television spot," and I've read this article before. And I think that if that experience taught me anything it's that (a) the Chicken Little effect is often overstating the case, and (b) that what's rewarded in these moments is not. I watched a lot of ad agencies run around buying a lot of digital peer play firms at crazy multiples, and those investments rarely paid out.

What did pay out was deliberately adding--modernizing our skill set from within--to both supercharge our existing business and create new revenue streams. It's actually very similar to Activision's approach right now, and we're using social and mobile and these kinds of new devices, new behaviors, and new technologies in a way to supercharge our existing business.

GS: Now, if there was one thing you could change about E3, what would it be?

EH: I'll punt on that one. But your last question…I heard it but never really got around to answering it. I think that the answer to me is that it's really clear that this is an industry in transition.

If you could edit a movie all three of the major console's press releases and watch them back-to-back-to-back, you saw three very different responses to this insurgency of new technology and new media. Microsoft is clearly trying to make the Xbox the connected, under-the-television device. PlayStation is doubling down on the core gaming experience with Vita and saying this more immersive, more high-production value game is still going to matter in a portable landscape.

Finally, you've got Nintendo for the first time talking about a digital back end, and HD, and kind of making a connected universe on the back of their console. Three very different responses but three very interesting approaches to, I think, the way the world is changing.

GS: Now, let's talk about the PlayStation Vita. You guys came out early in support of the Vita and you've got a Call of Duty game in development for the platform. Who's actually developing that?

EH: I'm not sure we've made that public yet, so I can't answer it. (Looks at pair of PR minders sitting across the table.)

GS: I think this is where the censorship starts…

EH: It's not censorship. I'm just a leaky bucket as I always tend to answer the questions. They've been storing a little electrode in the back of my neck.

GS: So is Call of Duty going to be a Vita launch title?

EH: We haven't announced the details yet.

GS: So, is it Activision's sole property in development for the Vita?

EH: Yes.

GS: What's your reaction to the Vita's price?

EH: Well, they clearly got a great response to the price. I know nothing about the ROI or the business model, but clearly that was a very attractive price, and I think it was very pleasing to the audience. And I also think that PlayStation has been through a rough launch of the PS3, when the price points were kind of key pain points.

GS: Do you think it's going to do better than the PSP?

EH: I think that it is a big bet on the core gamer experience, and I think that the fact that it is purely a gaming device, meaning not a phone, not a…

GS: But it's got some social aspects to it.

EH: That's true. You know, I think that at that price point it's got a good shot. I do. There is enough novelty, enough new tricks for developers to play with that. It's all going to come down to the software.

GS: And that's where you guys come in.

EH: Yeah. And at the end of the day, that's always the equation. I think it looks like a very robust platform.

GS: So Sony is doubling down on the core portable experience with the Vita. But a lot of the buzz right now is with games on the iPad, iPhone, and tablets. Do you consider that true gaming or not?

EH: Well, it's a completely different experience. It's a completely different input device. And so the best games on that platform are the games that are being designed to take advantage of that input device's tool and that interface. You know, I think gaming is gaming. I think people paying money for interactive media is a great thing, and I think anything that gets people more interested in interactive media is good for the industry as a whole.

GS: But Activision hasn't really embraced it. Your friends over at EA are all over the iPad and iPhone. Why haven't you guys quite embraced it so fully?

EH: I think that what we're doing is we're trying to use social…mobile as ways to build our core business and to strengthen our corporate image. What we're trying not to do is play app roulette. There are hundreds of thousands of apps at a price point that's a very different proposition from a development standpoint…in a business model is a very different thing.

So, we don't want to rush into a new category before we figure out what our competitive advantage is going to be. There's a very low percentage of companies making games for those platforms that are doing so profitably. It's great for Apple. There are hundreds of thousands of games on the platform. But as a game developer, we want to make the games that we know we can make better than anyone else in the world. And to a certain extent--and I think Apple would agree with this if you asked them--I think the things you choose not to do define you as a company as much as the things you choose to do. We want to do what we do with excellence.

So, I think you will see us moving into mobile and social in different ways, but as I was describing before, with my experience in the advertising industry, we're going to do so deliberately, and we're going to do so smartly, and we're not going to rush in and compete in every category on every platform just because they now exist. We're going to compete in areas where we have a competitive advantage.

GS: Speaking of new platforms, I didn't notice any Activision developers or support at the Wii U presentation. Are you guys supporting the Wii U?

EH: We will be supporting them. We will support the Wii U.

GS: Do you have any products currently in development for it?

EH: I don't think I can divulge that. Pass on that.

GS: OK, let's ask some more broader-scope questions. With the Wii, Nintendo went after the "blue ocean" of casual gamers and non-gamers. During its Wii U presentation, the company made it clear that it is going after the core gamer by showing some pretty hardcore footage. Do you think they're going to succeed with that approach?

EH: You bet against Nintendo at your peril. They're a pretty strong company, and they obviously have killer apps--their killer apps. They have great IP of their own that I think will always set the tone for their platform. That's the only place you can get it, and it's beloved and it has stood the test of time, and they have great intellectual property to leverage. The fact that they're making a more connected, more HD, more state-of-the-art platform is music to our ears.

GS: Is that going to encourage Activision's support? Is it going to allow you guys do more direct ports of Xbox 360 or the PS3 games?

EH: Direct ports are about providing an excellent experience in a lot of categories you weren't able to on the Wii. Obviously, [the Wii U] is going to be more compatible on the graphics and the sort of processing level with the other platforms. So that'll be a more analogous experience.

GS: So the Wii U is coming out next year. Do you think that's too soon for a console to come out? Do you think this life cycle is already done?

EH: That's a good question. We'll see. Like I said about the Vita, I think it really depends on the software. It depends on what they have ready for launch.

GS: Now, about Call of Duty: Elite. You guys announced it last week, and since then, there's been a bit of a backlash from people not wanting to pay for it. Given the fact that you guys came out and listed the large number of features people will get for free with Elite--things like stat tracking, leaderboards, access to mobile devices, and the like--why should people want to pay for the premium service?

EH: Well, as far as the backlash, with Call of Duty there's been so much speculation. "They're going to charge for multiplayer!" I can't tell you how many times I've answered that question since I've been on this job, and we're not doing those things.

And I think that any introduction of a new service that costs money was going to get an initial response like the one you saw from the core. The free elements of Call of Duty: Elite we believe amount to the best resource on the market. The paid parts we are not entirely able to reveal yet, and I know that's maddening for people, but we had a really tough choice to make, and I can explain sort of the thought process that we made it at.

GS: Sure.

EH: We thought with this kind of service, it was really important to test it at scale, and the only way to do that was to release it as a beta using Black Ops. Now, the service is being deeply integrated into Modern Warfare 3. So a lot of the most robust, most innovative industry-first aspects aren't going to be demonstrable until we have a Modern Warfare 3 multitier community out there with the service.

So, we had a choice between doing a beta and coming out with an incomplete list of everything that the service will eventually do or waiting and trying to launch a digital service at scale with a bunch of industry-first technologies built into it on day one with no test--no runway. And we just weren't willing to risk coming out of the gate without that polish and that working with the beta is going to afford us.

So, we made the choice we did, and I think that the good news about that is that people had a long time to learn about it, and we have a long time to bust the myths. There's a lot of misinformation on those comment boards as well. You know, people are blogging, saying, "You're charging for multiplayer." We're not.

The fact is we have taken an approach in stark contrast to all the predictions of what we would do. We have taken nothing away from the core value proposition that you've come to expect. You buy the disc, you got a great campaign; you get the best most approachable, most integrated, smoothest multiplayer anywhere. You get Spec Ops, you get the ability to buy DLC throughout the year, a la carte, if that's how you want to continue to play Call of Duty.

We've taken none of those things away with Elite. We've added an incredible host of new features free to all. What we are doing is trying to create a service with enough horsepower and enough value and enough appeal to gamers that they would also find it worth paying for the premium membership. If we accomplish that, then people will. If we don't, then we've managed to put a free service in the marketplace to make Call of Duty more appealing overall. And either way, it's a win for us.

GS: I know one aspect is the video series that's coming out of Hollywood. Can you talk about that at all?

EH: Well that's one of those things that it's kind of pointless to talk about until we have it to show. We have let people know that we're doing some content designed specifically for the Call of Duty community, and one of the things that's most remarkable about Call of Duty as a franchise is that this social network that we're now trying to sort of put some tools and some formality around already exists in people's behavior.

If you go on to YouTube and look at the number of Call of Duty videos that have been uploaded and the number of views that they've generated, it's staggering. And there's no organization to it. There's no place where it all sort of comes together, and there's no sort of formal community around it. There's no one really packaging it and supercharging it and making it better.

Same with if you've gone to Wikipedia…the number of pages dedicated to how to master certain maps or which weapons work best in different, multiplayer modes. It's incredible the amount of time and the amount of passion that people are pouring into the franchise. We just wanted to give people a framework where that could truly become a community as opposed to being scattered and give people real tools to connect with one another.

GS: Is the series going to be live action?

EH: Yeah.

GS: Is it going to be a television series type of thing?

EH: I don't want to describe something that you will get immediately when you see it. It will be cool. It will be something that's dedicated to the Call of Duty community.

GS: Let's talk about Modern Warfare 3 for a second. Some people were a little bit surprised when the trailer came out and showed that that Sledgehammer Games is a full codeveloper of the game. Were they there from the beginning or did they kind of just get on board to help Infinity Ward in the wake of the whole Infinity Ward brain drain last year?

EH: As far as the timing in terms of rolling out development had begun, that happened before I got here, so I can't answer that. What I can say is [Sledgehammer] absolutely is a codeveloper.

All I can tell you is the Infinity Ward that I'm working with today is one of the most dazzlingly creative groups of people I've ever met and some of the best people in the world at what they do. And you know they're obviously coming through a rebuilding time through this development, and that's why they are partnering with Sledgehammer.

There's been a lot of happy accidents and a lot of sort of "one plus one equals three" moments in their collaboration. And you know, Sledgehammer is a pretty talented group of people too and have done some pretty great work in their past. And so it's kind of like having these guys who really built this franchise and these guys who are sort of adding some new ideas to the franchise bouncing off one another and creating sparks. It seems to be working well.

GS: Speaking of new ideas and Sledgehammer, I know that according to Activision's own words, the studio is working on expanding Call of Duty franchise into the action adventure genre. Presumably that's a different project.

EH: Yeah, totally.

GS: Yeah. What's the status on that?

EH: They're focusing specifically on Modern Warfare 3.

GS: Are they actively developing the new game now or is it on the back burner>?

EH: No, they're focusing specifically on Modern Warfare 3.

GS: Do you see Modern Warfare 3 matching Black Ops in terms of sales?

EH: We're going to put a lot of marketing behind it. We're going to put a lot of investment behind it, starting with the development itself. You know, we're throwing more innovation and investment into this game than ever before.

I don't want to answer your sales question directly, but I will say this. By any metric, if you just step back and just passionately look at this franchise, by any measurement, whether that's sales of the last iteration, DLC sales, time spent in the multiplayer environment, YouTube views, Facebook fans, there's only evidence that there's still more appetite for this and that it's a brand still on the rise. I know that's hard to imagine because it's reached such incredible heights already, but we're confident that if we continue to deliver great product that there's still more appetite.

GS: Yeah. You're not worried about the Guitar Hero effect--about overexposing the brand?

EH: I get asked that all the time. They're such dramatically different situations. Guitar Hero was a new genre with a novelty input device that had a guitar shape controller strapped around your shoulder, and you can stand up and literally take the pose of a rock star. And that had tremendous appeal and became a tremendous phenomenon.

But if you look at the arc of the Guitar Hero franchise it reached great heights very early in its existence, and it started a slow and steady decline. It became a steep decline toward the end. It has literally nothing in common with Call of Duty. Call of Duty's genre; the first-person shooter is tried and true. It's been around and been commercially viable for decades. The brand itself, the franchise itself, has grown every year of its seven-year existence.

It's the exact opposite situation where a proven genre, growing year-on-year, and we've gotten better and better at making the games year-on-year, and we've developed a real momentum with consumers out there, with the franchise.

So that's very different from Guitar Hero. Guitar Hero used to be this phenomena, and the games that were in development for 2011…we stopped development on those. So, I get why people ask, but it's so different.

GS: Now tell me all about the Bungie game.

EH: God, I'm so dying to tell you all about it. Those guys are amazing. They're so gifted, and they're so visionary, and we're so lucky to be working with them, and we're doing everything we can to support them. And I think that they're going to create a whole new universe and it's going to be terrific. That's all I can say.