Infinity Ward: The best $5m Activision ever spent?

Infinity Ward: The best $5m Activision ever spent?

By Rob Crossley

November 12th 2009 at 10:47AM

2003 acquisition was a tenth of what Modern Warfare 2 grossed in a single day in the UK

It's likely you're sick of hearing about Modern Warfare 2 and its developer Infinity Ward this week.

Being responsible for the UK’s fastest selling game of all time (over 1m sold in a day says our sister magazine MCV), the studio and its high-tech shooter have cemented themselves in video games history.

All eyes are now on what Infinity Ward will do next, and how it will maintain its position as one of the hottest properties in games development.

But Activision didn’t always think it had an epoch-making studio on its hands when it acquired the team in 2003.

According to SEC filings, Infinity Ward was bought by Activision for a mere $5 million after the publisher decided to formalise its relationship with the studio following the success of the first Call of Duty.

It first bought a 30 per cent stake, then the remaining 70 per cent for $3.5 million.

Remarkably, the publisher had little initial confidence that the deal was a good bet; Activision actually said that there was “no assurance that we will realise long term benefits” from the deal.

Who’d have thought that the publisher effectively got something for nothing following this week’s sales and hype jackpot surrounding Modern Warfare 2?

In just a day, the game has already grossed a cool £47 million in the UK.

By comparison acquisition of games development talent is a high-stakes game today.

id Software was recently bought by Zenimax for at least $105 million, Bizarre could cost Activision as much as $107 million, and EA paid over $800 million for Bioware and Pandemic in 2007.

Recently, EA announced it had bough social game group Playfish for at least $300 million, though that figure could rise to $400 million.

The buyout has been hailed by Screen Digest games analyst Ed Barton.

“Activision keeps to a philosophy of buying talented development houses to work on attractive IP that can be iterated year on year on year,” he told Develop.

“I think we saw this with the success of Guitar Hero; it’s not until you get the backing of a massive publisher such as Activision that you’ll turn an interesting IP loved by core gamers into a major blockbuster that can outsell major movies on opening weekends.”