Motley Fool Money - Activision Blizzard: What Microsoft Got for $69 Billion

Episode Date: October 26, 2024

Last year, Microsoft closed its takeover of Activision Blizzard, the maker of Warcraft, Call of Duty, and Candy Crush. In the months that followed, interest rates rose, expectations changed, and Microsoft Gaming eliminated 8% of its workforce. Jason Schreier is the author of Play Nice: The Rise, Fall, and Future of Blizzard Entertainment and a reporter at Bloomberg. Schreier joined Ricky Mulvey for a conversation about: - The magic that made Blizzard Entertainment. - The state of the video game industry. - Why Grand Theft Auto VI is taking so long to develop. Companies discussed: MSFT, TTWO, OTC: NTDOY Host: Ricky Mulvey Guest: Jason Schreier Producer: Mary Long Engineer: Desireé Jones Learn more about your ad choices. Visit megaphone.fm/adchoices

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Yeah, Microsoft. Xbox specifically is facing some issues, and I wouldn't be shocked. Like, I don't know, this is speculation, but like, I would not be shocked if some of the folks who run the team there kind of wish they could take a mulligan on this particular acquisition. I'm Ricky Mulvey, and that's Jason Schreier, the author of Playnice, the rise, fall, and future of Blizzard Entertainment. He's also a reporter for Bloomberg. Tryer join me for a conversation about his book, The History of Blizzard, and the current state of the video game industry.

I enjoyed the book and the conversation. I hope you do too. A major part of your story in the book is just how difficult it is to make a really good video game. And it seems like there's two things sort of colliding in the industry right now, where it's almost never been easier to make a basic video game. I think Mike Moreheim in a conversation you had with him a few weeks ago said 15,000, new games were released on Steam last year. And yet, it's almost been never, never been more difficult to make a blockbuster video game where it's taken more than 10 years to make Grand Theft Auto 6. What's happening?

Why is it so difficult to make big video games these days? I think those kind of, those two points are in conversation with one another. Because I think that the blockbuster games, the games that are expecting to sell millions of copies, it's $70 a pop and are hoping to reach massive audiences, those are now competing with more games than ever before. Not to mention the kind of the third part of this equation and an important one is that a lot of games that have been released over the last decade or so

are so-called games as a service, or as I like to call them, forever games, games like Fortnite, where you don't just buy it and play it through and then put it down. You buy it and you keep playing it for years and years and years. So you combine all these factors, and you have these game companies that are really trying to stand out, trying to make their games unique, trying to make their games feel different than competitors, or at least look better than competitors.

And that's really tough, and it's really tough to stand out in this marketplace. And so a lot of people are struggling with that. I think the kind of the graphical fidelity arms race is really one of the biggest factors and one of the reasons that these games are taking so long to make. make is that they're getting prettier and prettier, and to hit that level of kind of graphical sheen, you need more and more and more artists, more and more engineers, more and more designers working on your game. And that just leads to more bloat and more time and everything just takes a lot longer as a result. Whereas if you are just kind of a hobbyist downloading Unreal Engine or

Unity Engine or any of these other tools that are free to download and play around with, you can make stuff in primitive art and you can make it relatively quickly and then you're competing like you're the blockwesterers are seeing you as competition a game called undertale one of the best games of the last decade like looks like it could have been made an MS paint and it's a tremendous video game that undoubtedly is out there competing with some of the the games made at 100 million dollar plus budgets. So yeah, I mean, those two kind of points are not as, they're less contradictory and more kind of complementary, I would say. Are you seeing sort of a reversion on the graphical sheen part, the really intense high definition graphics, especially you have a company like

Nintendo that continues to do extraordinarily well. I mean, they just released a new legend of Zelda game. And when I looked at the gameplay of that, that's not, it's not a super intense graphic experience. Yeah. And I think Nintendo has, very smartly carved out that kind of place in the market where it's reaching people who don't necessarily care about the best graphics and the best-looking games. And really, I would say that, like, I think this graphical arms race is pretty misguided. I don't think there are, I don't think there's a huge audience out there that is, like, demanding the best possible looking games, because these days, most games look pretty good. Like, graphics are generally pretty good. It's not,

it's rare to find a game that doesn't look at a baseline pretty good. And so being able to see the pores on someone's face while cool and kind of a novelty, I'm not sure that's what people are demanding with the couple hours they have to spend playing games every single night. And so you see Nintendo coming in and being like, hey, we don't really care about this graphical arms race. We just want to make games that are super cool and fun and innovative and interesting. which I think Nintendo's got a pretty good track record for that. Not all of their games are guaranteed hits, but many of them are, and they have really done extraordinarily well.

The Switch has sold 100-something million units. It's done quite well, and it's been on the market for almost eight years now, and it's slowed down a little bit, but it's still one of the best-selling consoles of all time. From an outside perspective, I would expect these block Buster games to in some ways be easier to make with tools like mid-journey and AI co-pilots where coding becomes easier when you have an assist and then you can sort of dictate what types of, you know, you can say build a stadium and you can do that without necessarily

coding it. Is that true for these large-scale game developments or are we not, are the AI leaps not as big as I would expect? Yeah, I don't think the tech is there. By the way, it's about 143 million units that the switch has sold as of a couple of months ago. I don't think the tech is there yet for those AI tools. And so, to be clear, I think in the game development world, people have been using some level of AI tools for quite a while now. They've been using algorithms that, for example, if you're making a giant open world, if you're making Grand Theft Auto, since you mentioned that earlier,

you don't necessarily need artists and designers to be hand-placing every single rock and tree in that world. You can use algorithms that will kind of look at the world and find realistic ways to place that topography. So it's not, AI as an assistant for game development is not that new. The new LLM stuff and the generative AI, that I think is still, we're still in early days on that stuff. So it's not really clear how that will impact game development, if it'll, kind of actually be a help or a hindrance. One thing I can guarantee is that, like, video game fans and enthusiasts will not want to buy games that feel soulless,

feel like they look like that kind of AI slop that you see on Facebook, where it all just kind of looks dead inside. I think people want to play games that feel like they were made by humans. That have fingerprints on them. Let's get into the book, which is a lot about sort of art, meeting the cold realities of shareholder capitalism in the magic that made Blizzard. And one of the key parts of this magic was that Blizzard made sort of hardcore gaming approachable. How did they do that practically?

Yeah. So it's funny. Alan Adham, one of the co-founders of Blizzard used to call it donut theory, where like he described the, the hardcore gamers as the like kind of middle of the donut and the ring of the donut was the more like the audience of people who might buy a game every single year, the mid-core, he would call it, and he wanted to reach the entire donut, not just the middle of the donut. Yeah, it's interesting. I think they had a few techniques that they use, many of which are actually very similar to Nintendo's. One of them is that every game should be extremely easy to get into, but really difficult

to master. And so they were really into the Blizzard. The Blizzard folks were really into making games that you didn't need a ton of baseline knowledge to be able to pick up and play. So something like Warcraft or Diablo or StarCraft. Those are all games. These were Blizzard's early games in the 1990s. Those are all games that really anyone could pick up and just kind of with a little bit of guidance and tutorials figure out exactly how they worked. Warcraft or example. I mean, you have pretty, pretty simple, rudimentary characters on screen, and pretty easily you figure out that you can click them, and then you can move them to another point, and you can use them to attack enemies, and then you can mine gold by sticking your worker units on that, and it's all

pretty simple and straightforward. But of course, beating other people in the game is much, much more difficult. And so Blizzard was really good at kind of roping people in, and then keeping them hooked as they tried to figure out how to master the game. Sort of like chess. Chess was kind of the North Star for a lot of people of Blizzard. It was the game that they like to kind of point to is the Paragon of video games, the one game that is kind of the, or not of video games, but of games in general, the one game that is kind of the model that you can follow as like easy to start playing, nearly impossible to master. And then a little bit later, they really hit the jackpot

when they took that approach to a game called EverQuest, which was a little bit of, a popular massively multiplier online game where you would kind of inhabit this virtual world. And they took, they were all playing that game. They were all hooked on that game. And they looked at them and they said, God, we love EverQuest, but there's so many things that annoy us about this game, like this super punishing death system and all these other things we don't like about it. So why don't we make our own version that is like way easier to get into and more approachable and more fun to play? And that turned into World of Warcraft, one of the most lucrative games of all time. at World of Warcraft, you point out that in 2008, 11.5 million people were paying monthly

just to play World of Warcraft, and that, quote, Azaroth had a larger population in countries like New Zealand, Norway, Greece. To put some context on this, and this is an imperfect comparison, because we're doing one month to one week, but stay with me, the one week viewership for the most popular show on Netflix was about 9 million people. What was the timing and magic that made Warcraft so popular. Yeah, I think it was a bunch of things. I think it happened to come out at a time when, like, a lot of people were, I think people had been switching to broadband for a few years at that point,

but by 2004, like a lot of people were, it was really in the center of the, but like over the next few years, everyone would switch from dial up to broadband. So it was really at the kind of apex of people adopting the internet. The internet, it was kind of post.com blow up. So people were kind of recovering and kind of viewing the internet as a little bit more positively than they had at that point. And it was really, I mean, I think there was a space in the market for that kind of game. There were a lot of people who potentially wanted to play one of these online virtual worlds, these MMOs, like EverQuest or like Ultima Online or a few others at the time.

but found them too opaque or too dense or just too impenetrable. And World of Warcraft came out and it was just like, hey, this is really easy to jump into. Anyone can do this. And then it was kind of, it built up a bunch of different factors. Another factor, of course, was at this point in 2004 when World Warcraft came out, Blizzard was a pretty well-established entity. Like, it had a lot of fans at this point, thanks to Starcraft and Warcraft and Diallo and Diablo two each of their games before World of Warcraft had just been.

bigger than the last and they had all been massive hits. So it was a pretty well-established company at that point. And then the other thing that happened in the World of Warcraft is that as it started to pick up steam, people started to talk about it and it kind of built up a natural virality where there were all these events. It had a massive viral video, Leroy Jenkins, which has been quoted by like how I met your mother and on Jimmy Fallon and stuff. There was the South Park episode that hit about it in 2006. That was really one of the points. I think that the kind of the peak pop culture phenomenon point of World Warcraft was getting an entire South Park episode dedicated to it, which I think really brought that game. And the episode, I detail this in the book, the episode was put together

in conjunction with Blizzard who helped them make like in-game videos. Like each each of the kids on South Park got their own character. So it was pretty cool and pretty well done. And then, yeah, from there, it just kind of took off because like once you hit this point of virality with an online game, um, people just tell their friends to come play because they don't want to play alone and it just can really, uh, build up like a snowball into an avalanche from there. In the early days, in the mid, mid days of Blizzard, what's an average Tuesday looking like for, for a game developer? What's it like working there? Yeah, I mean, it's funny. I think that like, uh, in a lot of ways it feels like going to college. I think a lot of people you go on campus. So this is, so around 2007 or 2008, they moved

into their big campus in the middle of Irvine, California, which is where Blizzard has always been based. And their campus, campus is the right word for it. Imagine a big, one of the big tech company campuses. That's essentially what they had. It's this big, a big 250,000 square foot location. There's like volleyball courts and a bunch of buildings and a gym and all sorts of other stuff you would expect from a tech company. And everyone there is like you're wearing your Blizzard logo hoodies and t-shirts and you're hanging out with your Blizzard friends and you're going and you're working on a game, you're coding or drawing art or designing or testing for a game. And then afterwards, you are going and hanging out with your Blizzard buddies. Or maybe playing games with them,

maybe playing Blizzard games with them. So for a lot of people, that was a super fun environment for a lot of people who work there. And I think making games in general can be a really satisfying, rewarding thing, especially when you're working on games that you know many millions of people

are going to play, as in the case of Blizzard. So for a lot of people, it was a dream company. Obviously, it had many problems. A lot of it should be exposed a little bit later on. But a lot of people really enjoy, working there and for a long time it had really good glass store reviews and a really good reputation for people who work there and many of the people who works there took on what was what was called

i don't know if it's what you called it or if it was what was called the blizzard tax where you're knowingly taking sort of five-figure pay cuts in order to work at your dream company i mean going through this process of research and writing the book did you find that the employees who took that tax worked their long term found that to be worth it. Yeah, it's a good question. I think that some, it depends who, which department you were and when you were there. So like if you were there during the peak world of Warcraft years, which is like around 2006, 2007, like all the way through 2010 or so, and you were in certain positions, especially on that team, you might be getting bonus checks that like outpaced your salary. Like you might be actually rewarded pretty well. And often

the promise and the kind of the blizzard tax that was something that uh blizzard people described it as but it was something that like it was kind of like the the condition here the the catch there the contingency there was like you accept a lower salary for coming here yes it's true but uh in exchange uh you will or like to make up for that you will be getting profit sharing bonuses which was something that blizzard at the time offered that a lot of companies didn't um and so for a while that could be the case again depending There were thousands of people at the company at this point in the mid-2000, so it really depended where you were, which department you were in, and the system was very opaque by designs, and not a lot of people knew how it worked or why they were getting certain amounts and so on

and so forth. So that time was a little bit different than a little bit later when Blizzard started getting less of the profit sharing and ran into some fallow years, and suddenly that promise of like, well, you're going to take maybe an average or below average salary to work here, but you're still going to get profit sharing in exchange when that profit sharing was no longer all that impressive. Then it became a much bigger problem for a lot of people. And there were also, I mean, you're in Orange County, California. That's an expensive place to live and work. It's really hard to work there without a good salary. It's even, I mean, even with a six-figure salary,

it's difficult to buy a house in Orange County, California. And then on top of that, you have competitors in the area, especially Riot Games, the makers of League of Legends, which itself is kind of based on a mod for a Blizzard game. So Riot Games comes in and they are well-funded and paying, in some cases, double the salaries of Blizzard. And so they poach a lot of people from Blizzard as a result. You have these competing needs, especially on people getting paid there where you have essentially profit-sharing incentives for people who are making games that make money, but you also need people to experiment on new ideas and, you know, fire bottle rockets that may or

may not go off. There are a lot of games that have not made it to players' hands, but one that was sort of famous because it became Overwatch was called Titan. And this was this superhero game where you were essentially mixing the Sims, where you have like a daily regular life with a superhero game. And they worked on this game for years and years and years, and they could never turn it into something that was releasable because of something you call basically the loop problem, the central loop problem.

This is actually, I didn't understand this reading your book as much. Why is it a problem? Like, it makes sense to me. All right, you got Daily Sims, and then you got a superhero game, and you're combining it into one. Why is that a problem for the game? Yeah, it was too much.

there were too many things going on, too many different mechanics going on. And by core loop, I mean, designers like to think of it in terms of like, okay, what is five minutes of this game going to look like? What is 30 minutes of this game going to look like? What is an hour of this game going to look like? And if that experience doesn't feel cohesive or fun, then that can be a problem. And with this, in the case of Titan, all those mechanics just never coalesced. So like, it might be fun in isolation to be doing the shooting part.

And it might even be fun in isolation to be doing, this other kind of simsy part where you're like decking out decorating your apartment or like driving around the city or whatever but together they just didn't work it felt like this weird mishmash of games and it didn't feel like they were kind of in simpatico in any way and they just could never nail that kind of like that core gameplay loop and and that's what people are describing when they talk about that it just didn't feel cohesive um and if something doesn't feel cohesive it doesn't really last in the long run because you might be looking around and being like, oh, okay, like, why am I decorating this house? Why am I shooting these bad guys? Like, this isn't working for me. And so

they played around with a lot of ideas to try to make that work, but it just never did. And what ultimately happened and what turned into the very popular game, Overwatch, was when they kind of boiled it down. I mean, essentially, Titan was canceled, a small team remained behind, and they had a chance to work on a new project. And they said, hey, this shooting part, that was kind of fun. Why do we take that and turn it into like more of a hero shooter like Team Fortress 2 and then just build that into a game? And that worked really well and was developed in two and a half years in large part because it had such a clear focus. And from the beginning, they knew exactly what that gameplay loop was going to be. They knew exactly what like five minutes, 30 minutes, an hour of that game would look like. They knew it would be matches. They knew each match would have objectives. They knew it would be based on. heroes and then it was a matter of just building the game. So I think when you have a very clear vision and everyone kind of understands a lot of game developers often talk about like not understanding what the game is and that was very much a case with Titan where like if the people who are working on

it every day can't even understand what the game is then like players will certainly never understand that. That said, and I think it's worth noting here, some people even on the team, even after six years of development, a lot of people believe that it would come together because sometimes with games, like things just take a while to coalesce, and it's only once, like, a certain feature is implemented or a certain graphical element gets turned on that you can really understand the game and get a good feel for it. So in the case of time, I mean, people still held at hope. It can be very difficult when you're working on just kind of your individual part of the game to know how things are going overall. But no, it just never came together.

Blizzard had a series of corporate parents. One of them was Activision, and in comes this figure named Bobby Kodick, who you said he came out of the womb, basically looking to deliver shareholder returns. I'm sorry I'm butchering the line. But one of the things that Activision was able to do, this is the company that was behind Call of Duty,

is release games on an annual basis with regularity. And for any financial analysts, they really like a regular financial model that they can plug games into and they can plug the profit into and then come up with that. Blizzard is the opposite of that, where they have wildly varying years of operating profit. And many of the tools that Bobby Kodick used to release games on a very regular basis at Activision aren't able to work at Blizzard and doesn't understand why. So why is it that Activision is able to release these games on an extraordinarily regular basis? and some of them are incredibly popular, Call of Duty. And yet Blizzard was not.

Yeah, I mean, I think there are a lot of kind of factors there. And I think what Blizzard people would immediately tell you is that like, yeah, they got Call of Duty. That's a great franchise and makes them a bunch of money. But when's the last time Activision incubated a new franchise, the way that Blizzard has incubated like Heartstone and Overwatch and other new franchises over the years. A lot of what Activision has kind of created is just stuff that it bought.

So this is a company. that understands how to churn, but not necessarily how to create, at least from Blizzard's perspective. Activision people will tell you, well, these Blizzard people, they're all stuck in their ways. They're these, like, artists who don't care about commerce and this is the real world. We're footing the bills for them to play around with these experiments like Titan that don't actually work, and they refuse to hire the many more people it would take to generate this content more quickly. And then Blizzard people would fire back, well, we don't want to. want to hire hundreds more people because we don't want to turn our games into like soulless factories

the way the call of duty is the call of duty an organization within activation is very much commercially driven marketing people and that kind of org the commercial org in general sits at the very top and other people kind of feed into that other parts of the organization feed into that and i think that was not a philosophy that worked for blizzard blizzard was very developer focused It was very much like the most powerful people at Blizzard were the executive producers on each game team. They had a lot of say they had input into the marketing and could ultimately put their foot down if they needed to. So very different cultures. And yeah, I mean, it was inevitable that the two cultures would clash in some way or another.

On World of Workhaft, just to give an example, one of the common arguments was that Activision executives would come in and they would say, hey, you guys only have X hundred people on this team. you need Y hundred, so X plus five or whatever, because we have these calculations on Call of Duty that show the man months it takes for each of these game to be made. And therefore, you must have more people. And so we are demanding that you hire more people. And that led to endless battles over the years. Because we talked about it a lot on this show and the various regulatory challenges. At one point, Warren Buffett was trying to play ARB games with it.

And we haven't talked about it much since then. When Microsoft comes in, there's this hope that a trillion-dollar company is going to be able to really, really improve things. You have an engine that's going to allow more resources to build more and better games. You have your regulatory challenges. And then what happens at first is you have Phil Spencer who runs Microsoft gaming. And he sort of has this reputation that he's going to let games develop. And you know what? Maybe things can continue to take time to bake because Microsoft has a bunch of other products.

The opposite turns out to be true. there's layoffs in the Microsoft gaming division as there are across the video game industry and what also ends up happening is they're cutting into the bone where they're cutting developers they're not just cutting like marketing teams or financial teams what do you what do you think Microsoft was originally hoping for with this Activision acquisition yeah I mean the most important part of this is that money looked much different in December of 2021 when Microsoft started talking about this deal and struck the deal a month later in January 2022, then it did in October of 2023 when the deal closed. The video game industry as a whole

looked much different. When Microsoft made this deal, interest rates were at an all-time low. The video game industry was still kind of on that bounce from the pandemic when everyone was staying at home and playing games nonstop and it hadn't yet hit this correction point. So the landscape was very different. And so I think their hopes at that point, were kind of dashed a little bit as the regulatory process dragged on, and the economic climate and the entire video game industry just changed pretty drastically as a result. Nobody saw the growth that they wanted, and especially Xbox.

Xbox was also in a very different position. They were in a much stronger place because their Xbox game pass, which is their kind of their Netflix-like subscription program, which is at the core of many of their video game strategies, that was still growing at that point. and it has since flattened and plateaued. And so I think one of their hopes with this acquisition was that it would lead to more GamePass growth,

more console growth. And a lot of that stuff has really slowed and led to them having to shift a little bit. And then the other thing that happened was that as a result of this acquisition, they suddenly were under a lot more pressure from Microsoft. And my colleagues of Bloomberg have reported

that Phil Spencer, who runs Xbox, has been under a lot more pressure from Satina Dadella and Amy Hood and the people who run Microsoft because they're looking down and they're saying, hey, you guys spent $69 billion, you better get these P&Ls in shape. You better get that growth up.

And so as a result, they've spent this whole year cutting costs and looking for ways to boost revenue, laying people off, shutting down studios, cutting costs in other way, kind of belt tightening all across the org, and then also releasing their games on PlayStation, which would have been unthinkable a few years ago. So, yeah, Microsoft to Xbox specifically is facing some issues, and I wouldn't be shocked.

Like, I don't know, this is speculation, but like, I would not be shocked if some of the folks who run the team there kind of wish they could take a mulligan on this particular acquisition. Yeah, I'm uncertain what's being developed right now? Because I've seen some reports that they're trying to develop a new franchise, but it seems like they're just doing some expansions. for World Warcraft in Diablo, almost a continuation of what was already going on at Activision Blizzard under Cotech. Yeah, so Blizzard did have a new franchise in development called, it was co-named Odyssey.

It was supposed to be a survival game, kind of like Rust or Valheim, games like that. And that was canceled earlier this year during the big Microsoft layoff in January. And nowadays, yeah, they've got some other incubation projects in the works in different franchises, StarCraft and Overwax. but their main focus, and they've been public about this,

is focusing on their Forever games, which they now have four of them, essentially, Overwatch 2 and Diablo 4 and World of Warcrafts and Harthstone, which are all just all just have big teams behind them that are still working to get new content and new expansions out. So that, I think, is a large part of Blizzard strategy is just maintaining players for those games. And like the Diablo and World of World War.

Warcraft, both just had new expansions come out over the last couple of months. I expect we'll see more of that in the future as well. Three, five, ten years from now, what would be your mark of success that this was a good acquisition for Microsoft taking Activision Blizzard? That is a great question. I'm not sure. I'm not sure what success looks like for them because their position in the console market is so tenuous. The Xbox has really been outsold by the place decision at least twofold over the last few years. Their position in the subscription market has also, I mean, while they've been dominant with Xbox Game Pass, it's been flat, like I mentioned earlier.

I think a lot more growth there would help. In fact, as we're recording this, the new Call of Duty game is about to come out, and that is launching day one on Xbox Game Pass, which I think Microsoft hopes will buoy subscriptions and lead to a lot of growth on Game Pass. So that's a big test. That's kind of a big milestone in this acquisition. and where it goes from here. I'm not sure.

I don't know. I don't really know what that looks like and what their metrics for success are. I think for Phil Spencer, I guess if he's still in charge three, five, ten years from now and he's still running the division, then I guess it's a success for him

because it means that the Microsoft higher-ups see his position is still being tenable and still being successful. So that might be one metric that we look at in the years to come. Certainly I'll be looking at game past growth and what they say about that as well.

Activision Blizzard, I mean, it's a profitable company. So, like, just buying it gives you a profit center. It's just that $69 million. I mean, that's a lot of, it's a lot of cash. I'm hoping this is a good headline grab. We need our viral moment, Jason. It's December. It's December of 2025.

I've turned on an Xbox. and I'm scrolling through games. Is one of them Grand Theft Auto 6? I don't know. I wish I could give you a headline in this. I think anything I say is just going to be taken out of conducts and extrapolated for sure, so maybe you will get your headline. I don't know.

I really don't know. They've said fall 2025. I am always skeptical when it comes to video game release dates, but especially Rockstar game release dates. I feel like they're always good for at least a couple. of delays. So I wouldn't be shocked if it slips to 2026, but that's not based on inside information. I just have no idea. It's one of these stories where the power of money doesn't work. This is a game when it came out in 2013. It made about $8.5 billion in revenue.

And that for context for the for folks, that's the worldwide box office for the top 10 movies in 2023 combined. Like around the world, how many people went to theaters for the top top 10 movies. That's just Grand Theft Auto 6, a game that came out in 2013. How does this sequel, how does 5 to 6 take more than 10 years? Well, I would actually argue that money is the precise reason why there hasn't been a sequel because GTA 5 not only did it make, I believe it was 800 million in revenue in its first 24 hours, so about 11, 12 million in sales. It went on to have the longest tail. of any video game in history. It is currently at about 200 million sales. And that is because

Grand Theft Auto Online, the multiplayer component of that game, was more successful than anyone could have possibly imagined. It is one of the most lucrative products ever made and has turned GTA 5 into the second bestselling game of all time, second only to, I believe, Minecraft. And so we're talking, and Minecraft, I mean, that's really sun phones. So apples and oranges, here. So we're talking about a franchise where the last game has now sold, again, 200 million copies. That's like unheard of nothing. That's more, I mean, for some crazy context, that's more than the entire Assassin's Creed franchise has sold, the entire Assassin's Creed franchise. So 200 million copies of a single game, if not for that. So that did a couple of things.

That sucked up a lot of resources from the rest of the company who, to get people working on GTA online and continuing to make content for that, sort of like how World of Warcraft did the same for Blizzard. So that itself contributed to delays for GTA6. Another thing was, of course, Red Dead 2, which trucks are released in 2018. That was most of their staff were working on that rather than GTA 6 for the five years between GTA 5 and Red Dead 2. So even though GTA 6 has technically been in development since like around 2014 or so, it hasn't really been in full-scale development until a few years ago.

recently. So that's a factor. But yeah, I mean, to Rockstar, I think there's no rush to release a new GTA when your old GTA is printing money. I mean, GTA online. Like the numbers are just staggering. 200 million copies. I mean, once again, like that's outsold the entire Final Fantasy series, just as another example. Like the number of copies there is unfathomable. 200 million copies. That's like half the population of America. Jason Trier, his book, Play Nice, the Rise, Fall, and Future of Blizzard Entertainment, a book I'm happy to recommend to listeners of Motley Full Money. I enjoyed reading it, learned a lot about the industry.

Thank you for your time, for your insight, and for joining us on Motley Full Money. Yeah, thanks for having me, Ricky. As always, people on the program may have interests in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell anything based solely on what you hear. I'm Ricky Mulvey. Thanks for listening. We'll be back tomorrow.