It took more than four years for Bungie to develop its Destiny game, but just one day to make it a financial success. Activision Blizzard (NASDAQ:ATVI) announced this week that it has booked more than $500 million in sales of the title by its first day of availability for the biggest new franchise launch in video game history. Let's jump right in to what that release number means for Activision and its shareholders.
Call it a franchise
First, it's important to note that the $500 million revenue figure comes with a few asterisks. It's a "sell-in" number, for one, which means that it isn't limited to copies purchased directly by gamers, but also includes sales to retailers like Wal-Mart and GameStop. So there aren't 8 million players out there clogging Destiny's servers right now, as a $500 million sales figure and a $60 retail price might imply. Many of those millions of copies are sitting on shelves, waiting to be sold during the next few months.
Also, the $500 million figure doesn't represent a single day's total, but is cumulative as of launch day. In other words, we're talking about the sum of all pre-order and launch-day sales -- to players and retailers -- that Activision has booked as of Sept. 10.
Still, it's an impressive accomplishment for a new piece of intellectual property. By comparison, Activision's big hit, Call of Duty: Ghosts, booked $1 billion in sales by day one of its holiday season release last year.
Sure, that's twice Destiny's total; but Call of Duty is a well-established franchise with a massive yearly following. The fact that Destiny is already in the same league as that blockbuster brand suggests that it is almost sure to become another $1 billion franchise for Activision over time.
Investors apparently won't have to wait long for Destiny to start contributing to Activision's bottom line, either. The company has plans for the brand that stretch out a decade, which would justify big upfront development and marketing costs that could be recouped over time.
But the title seems to be a profitable success already. CEO Bobby Kotick said in a press release: "We've been confident that our investment and belief in Destiny would pay off. But not many people believed we'd be able to say it did on day one." You have to read between the lines a little, but Kotick seems to be saying that Destiny is already a winning investment for the company from a financial standpoint.
Foolish final word
A successful launch for Destiny was expected, and that's likely one reason why the stock is up 30% so far this year. Still, I think shares look like a bargain, even after that run-up.
Now that its newest brand is on solid footing, Activision can turn to two more established franchises to see it through the rest of the fall. The publisher will release its latest Skylanders title in early October, followed by Call of Duty: Advanced Warfare a month after that. Those games might not set any all-time industry records at launch, like Destiny did, but they should help Activision stay on top of the competition this holiday season.
Demitrios Kalogeropoulos owns shares of Activision Blizzard. The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard and GameStop. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.