Feb 26, 2019, 2:39 PM ETInterview, Fireside Chat, Podcast

a16z Podcast | Gaming Goes Mainstream

Bobby Kotick transitioned from college software development to founding a company creating Apple II peripherals (mouse, word processor, spreadsheet) with a GUI before the Macintosh release.
Steve Jobs offered Kotick a contract to develop software for the Apple III and the upcoming Apple II GS, explicitly ordering Kotick to drop out of college due to a conflict between his coursework and the deadline.
Kotick quit college the following day without informing his parents for approximately eight months.
In 1987, Kotick attempted to purchase Commodore to repurpose the Amiga computer as a 16-bit dedicated video game console following the Black Monday market crash, though the deal failed.
Kotick acquired a 25% stake in the then-insolvent Activision for $440,000 in the early 1990s, becoming the largest shareholder.
In Spring 2008, amid the financial crisis, Activision merged with Vivendi Games to acquire Blizzard Entertainment, resulting in the formation of Activision Blizzard.
As part of the Vivendi deal, Activision gave up 51% voting control to Vivendi in exchange for Blizzard, $2 billion in cash, and a commitment to Vivendi's long-term ownership.
Kotick later noted that Vivendi's lack of synergy with gaming operations led to a difficult partnership, culminating in Vivendi selling its stake back to Activision.

The video game market has shifted from a niche hobby on expensive consoles/PCs to a global phenomenon accessible in 196 countries to 400 million customers across all socioeconomic strata.
Kotick identifies the rise of mobile devices and social gaming (voice chat, global connectivity) as the primary drivers transforming the industry into a medium with the cultural impact of sports.
Esports are characterized by Kotick as a "great equalizer" similar to traditional sports, offering a sense of belonging, purpose, and camaraderie that allows mass participation compared to the limited availability of professional athletic careers.
Spectator engagement has grown significantly; in South Korea, StarCraft once had 5 million registered players (approx. 20% of the male population) with dedicated cable channels and professional players earning over $100,000.
Kotick predicts esports will not likely enter the Olympics soon, as the Games avoid endorsing specific commercial enterprises.
Fortnite is credited for broadening the appeal of gaming by utilizing a serialized "seasons" model similar to television, enabling cross-platform play and 20-minute engagement loops that fit casual schedules.
Pokémon Go is identified as the first successful broad-scale implementation of Augmented Reality (AR), creating a physical experience that Kotick believes will have more near-term impact than Virtual Reality (VR).
Kotick asserts that AR is poised to drive more innovation in the near term compared to VR.

Kotick argues that video games command a higher level of user commitment (average 1 hour/day vs. 2 hours for a movie) and that this investment grants players a right to voice opinions and influence development.
The Overwatch League was structured around 28 independent city-based teams to leverage "tribalism," a key driver of traditional sports success.
Future game design is increasingly accounting for spectator experience, including camera angles and commentary, to appeal to audiences who may not be players.
Kotick advises developers to listen to user feedback to identify innovation opportunities, though he notes that mass views may not always be correct.

Kotick recommends Call of Duty: Black Ops 4 as the primary Activision release of the year.
The "Blackout" mode within Black Ops 4 is highlighted as a Battle Royale experience similar to PUBG, designed for short 25-minute engagement sessions.
Kotick cites Red Dead Redemption as the best non-Activision game of the year, praising its difficulty to execute within the Western genre and its high player satisfaction.
Pokémon Go continues to generate approximately $75 million in monthly revenue nearly three years after launch, sustaining a billion-dollar annual run rate.