Activision Blizzard Inc Blue Ocean Strategy Guide & Analysis| Assignment Help
Activision Blizzard Inc. (ATVI), now part of Microsoft Gaming, operates within the global interactive entertainment industry. This encompasses video game development, publishing, distribution, and esports. Key business units include Activision (Call of Duty), Blizzard Entertainment (World of Warcraft, Diablo, Overwatch), and King (Candy Crush Saga).
- Market Segments:
- Console & PC Gaming: AAA titles, primarily first-person shooters, action RPGs, and strategy games.
- Mobile Gaming: Casual puzzle games and strategy titles.
- Esports: Professional gaming leagues and tournaments.
- Key Competitors:
- Console & PC: Electronic Arts (EA), Take-Two Interactive, Ubisoft, Sony Interactive Entertainment.
- Mobile: Tencent, NetEase, Supercell.
- Esports: Riot Games, Valve Corporation.
- Market Share (estimated, 2023): Activision Blizzard held a significant, but fluctuating, share across segments. Call of Duty consistently dominates the FPS market, while King leads in mobile puzzle games. Blizzard’s share is more volatile, dependent on new releases and content updates.
- Industry Standards & Limitations: Annual franchise releases, reliance on established IPs, high development costs, and increasing marketing spend are common. Limitations include difficulty innovating within established genres and the risk of alienating core fanbases with radical changes.
- Industry Profitability & Growth: The industry exhibits strong growth, driven by digital distribution, in-game purchases, and esports. However, profitability is uneven, with AAA titles requiring massive upfront investment and facing increasing competition. Mobile gaming offers higher margins but requires constant content updates and user acquisition.
Strategic Canvas Creation
Example: Activision (Call of Duty)
- Key Competing Factors:
- Graphics Fidelity
- Multiplayer Experience
- Single-Player Campaign
- Content Updates (Season Pass)
- Esports Integration
- Franchise Legacy
- Accessibility (Ease of Play)
- Story Depth
- Innovation (Gameplay Mechanics)
- Marketing Spend
- Strategic Canvas: (Hypothetical, based on publicly available information)
| Factor | Activision (Call of Duty) | Electronic Arts (Battlefield) | Other Competitors (e.g., Apex Legends) |
|---|---|---|---|
| Graphics Fidelity | High | High | Medium |
| Multiplayer Experience | High | Medium | High |
| Single-Player Campaign | Medium | Medium | Low |
| Content Updates | High | Medium | High |
| Esports Integration | High | Low | Medium |
| Franchise Legacy | High | Medium | Low |
| Accessibility | Medium | High | Medium |
| Story Depth | Medium | Medium | Low |
| Innovation | Medium | Medium | High |
| Marketing Spend | High | High | Medium |
- Value Curve: The value curve for Call of Duty would show high investment in graphics, multiplayer, content updates, esports, and marketing, reflecting its focus on delivering a polished, competitive experience.
- Mirroring & Differentiation: Call of Duty mirrors competitors in graphics and marketing spend. It differentiates itself through its strong franchise legacy and focus on esports integration.
- Competition Intensity: Competition is most intense in graphics, multiplayer experience, and content updates, where all major players invest heavily.
Voice of Customer Analysis
- Current Customers (30):
- Pain Points: High cost of in-game purchases, perceived pay-to-win mechanics, repetitive gameplay loops, lack of meaningful innovation, and toxicity within online communities.
- Unmet Needs: More engaging single-player experiences, deeper character customization, improved anti-cheat measures, and a more positive community environment.
- Desired Improvements: More frequent and impactful content updates, better balancing of weapons and abilities, and stricter enforcement of community guidelines.
- Non-Customers (20):
- Soon-to-be Non-Customers: Frustrated with the lack of innovation, high cost, and toxic community.
- Refusing Non-Customers: Dislike the core gameplay loop, find the game too competitive, or are turned off by the aggressive marketing.
- Unexplored Non-Customers: Not interested in first-person shooters, prefer different genres, or are unaware of the game.
- Reasons for Not Using: High cost of entry (game + peripherals), time commitment required to stay competitive, perceived lack of skill, and negative perception of the community.
Part 2: Four Actions Framework
Example: Activision (Call of Duty)
Eliminate
- Factors to Eliminate:
- Annual Release Cycle: The industry-standard annual release cycle puts immense pressure on development teams and often leads to incremental updates rather than meaningful innovation.
- Excessive Marketing Spend on Traditional Channels: Over-reliance on TV and print advertising, which may not be as effective in reaching the target audience.
- Complex Weapon Attachment Systems: Overly intricate weapon customization options that overwhelm casual players.
Reduce
- Factors to Reduce:
- In-Game Purchase Prices: High prices for cosmetic items and battle passes, which can alienate players.
- Reliance on “Pay-to-Win” Mechanics: Features that give paying players a significant advantage over non-paying players.
- Number of Weapons and Attachments: Streamline the weapon selection and attachment system to reduce complexity and improve balance.
Raise
- Factors to Raise:
- Anti-Cheat Measures: Implement more robust and effective anti-cheat systems to combat cheating and improve the integrity of the game.
- Community Moderation: Increase the level of community moderation to reduce toxicity and create a more positive environment.
- Single-Player Campaign Depth: Invest in more engaging and story-driven single-player campaigns.
Create
- Factors to Create:
- Dynamic Difficulty Scaling: Implement a system that automatically adjusts the difficulty of the game based on the player’s skill level.
- Personalized Content Recommendations: Offer personalized content recommendations based on the player’s play style and preferences.
- Cross-Game Progression System: A unified progression system that rewards players for playing across different Activision Blizzard titles.
Part 3: ERRC Grid Development
Example: Activision (Call of Duty)
| Factor | Action | Impact on Cost | Impact on Value | Implementation Difficulty (1-5) | Projected Timeframe |
|---|---|---|---|---|---|
| Annual Release Cycle | Eliminate | Significant Reduction | Medium Increase | 4 | 24 Months |
| Excessive Marketing Spend (Traditional) | Eliminate | Moderate Reduction | Low Increase | 3 | 12 Months |
| Complex Weapon Attachment Systems | Eliminate | Low Reduction | Medium Increase | 2 | 6 Months |
| In-Game Purchase Prices | Reduce | Low Reduction | High Increase | 3 | 6 Months |
| “Pay-to-Win” Mechanics | Reduce | Low Reduction | High Increase | 4 | 12 Months |
| Number of Weapons/Attachments | Reduce | Low Reduction | Medium Increase | 2 | 6 Months |
| Anti-Cheat Measures | Raise | Moderate Increase | High Increase | 5 | 18 Months |
| Community Moderation | Raise | Moderate Increase | High Increase | 4 | 12 Months |
| Single-Player Campaign Depth | Raise | Significant Increase | High Increase | 5 | 24 Months |
| Dynamic Difficulty Scaling | Create | Moderate Increase | High Increase | 3 | 12 Months |
| Personalized Content Recommendations | Create | Moderate Increase | High Increase | 4 | 18 Months |
| Cross-Game Progression System | Create | Significant Increase | High Increase | 5 | 24 Months |
Part 4: New Value Curve Formulation
Example: Activision (Call of Duty)
- New Value Curve: The new value curve would reflect a lower investment in annual releases and traditional marketing, and a higher investment in anti-cheat measures, community moderation, single-player depth, and personalized content.
- Plotting Against Current Canvas: The new curve would diverge significantly from the current industry standard, emphasizing player experience and long-term engagement over short-term sales.
- Evaluation:
- Focus: The curve emphasizes a clear set of factors: player experience, community, and long-term engagement.
- Divergence: The curve clearly differs from competitors’ curves, which are primarily focused on graphics, multiplayer, and marketing.
- Compelling Tagline: “Call of Duty: Evolved - A Fairer, More Engaging, and More Rewarding Experience.”
- Financial Viability: The strategy aims to reduce costs by eliminating the annual release cycle and shifting marketing spend to more effective channels, while increasing value by improving player experience and long-term engagement.
Part 5: Blue Ocean Opportunity Selection & Validation
Opportunity Identification
Ranking Blue Ocean Opportunities (across all ATVI business units, not just Call of Duty):
- Cross-Game Progression System (Activision Blizzard): High market potential, strong alignment with core competencies, moderate barriers to imitation, high implementation feasibility, high profit potential, and strong synergies across business units.
- Personalized Content Ecosystem (King): High market potential, strong alignment with core competencies, low barriers to imitation, high implementation feasibility, high profit potential, and moderate synergies across business units.
- Esports Talent Development Program (Activision Blizzard): Medium market potential, strong alignment with core competencies, high barriers to imitation, moderate implementation feasibility, medium profit potential, and strong synergies across business units.
Validation Process
Example: Cross-Game Progression System (Activision Blizzard)
- Minimum Viable Offering: A limited cross-game progression system between Call of Duty and Diablo IV, offering cosmetic rewards and experience boosts.
- Key Assumptions: Players will be motivated to play multiple games to earn rewards, the system will increase player engagement and retention, and the system will not negatively impact the balance of individual games.
- Experiments: A/B testing of the system with different reward structures and progression rates.
- Metrics: Player engagement (time spent playing), player retention (daily/weekly active users), and player satisfaction (surveys and feedback).
- Feedback Loops: Regular monitoring of player feedback and data analysis to identify areas for improvement.
Risk Assessment
- Potential Obstacles: Technical challenges in integrating different game engines and platforms, resistance from individual development teams, and potential for the system to be exploited by cheaters.
- Contingency Plans: Develop alternative integration methods, offer incentives to development teams, and implement robust anti-cheat measures.
- Cannibalization Risks: Potential for the system to cannibalize sales of individual games.
- Competitor Response: Competitors may attempt to copy the system or offer similar incentives.
Part 6: Execution Strategy
Resource Allocation
Example: Cross-Game Progression System (Activision Blizzard)
- Financial Resources: $50 million for development, integration, and marketing.
- Human Resources: 100 engineers, designers, and project managers.
- Technological Resources: Access to game engines, platform APIs, and data analytics tools.
- Resource Gaps: Potential need for additional data scientists and security experts.
- Acquisition Strategy: Recruit talent from within the company and through external hiring.
- Transition Plan: Gradually integrate the system across different games, starting with a limited beta test.
Organizational Alignment
- Structural Changes: Create a cross-functional team responsible for managing the cross-game progression system.
- Incentive Systems: Offer bonuses to development teams based on the success of the system.
- Communication Strategy: Communicate the benefits of the system to internal stakeholders and address any concerns.
- Resistance Points: Potential resistance from development teams who are protective of their individual games.
- Mitigation Strategies: Emphasize the benefits of the system for the overall company and offer incentives to encourage participation.
Implementation Roadmap
Example: Cross-Game Progression System (Activision Blizzard)
- Month 1-3: Planning and design.
- Month 4-6: Development and integration.
- Month 7-9: Beta testing.
- Month 10-12: Launch and marketing.
- Month 13-18: Ongoing maintenance and updates.
- Review Processes: Weekly progress meetings and monthly performance reviews.
- Early Warning Indicators: Declining player engagement, negative player feedback, and technical issues.
- Scaling Strategy: Gradually expand the system to include more games and features.
Part 7: Performance Metrics & Monitoring
Short-term Metrics (1-2 years)
- New customer acquisition in target segments (e.g., players who play multiple ATVI games).
- Customer feedback on value innovations (e.g., surveys on the cross-game progression system).
- Cost savings from eliminated/reduced factors (e.g., reduced marketing spend on traditional channels).
- Revenue from newly created offerings (e.g., increased sales of in-game items).
- Market share in new spaces (e.g., market share of cross-game progression systems).
Long-term Metrics (3-5 years)
- Sustainable profit growth.
- Market leadership in new spaces.
- Brand perception shifts (e.g., improved perception of ATVI as a player-centric company).
- Emergence of new industry standards.
- Competitor response patterns.
Conclusion
This Blue Ocean Strategy analysis provides a roadmap for Activision Blizzard to move beyond competing in existing saturated markets and create new demand through value innovation. By focusing on player experience, community, and long-term engagement, ATVI can differentiate itself from competitors and achieve sustainable growth. The key is to eliminate factors that no longer add value, reduce factors that are over-delivered, raise factors that are critical to player satisfaction, and create entirely new factors that address unmet needs. The cross-game progression system represents a significant opportunity to create a blue ocean by fostering player loyalty and engagement across the ATVI portfolio. This requires a commitment to resource allocation, organizational alignment, and a rigorous implementation roadmap with clear performance metrics and monitoring.
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