Bungie's Contract With Activision

[Telefrog]

Made public due to the Activision case against West and Zampella.

The 27-page agreement calls for Bungie to develop four "sci-fantasy, action shooter games," code-named "Destiny," released every other year, beginning in the fall of 2013. Bungie also agreed to put out four downloadable expansion packs code-named "Comet," every other year beginning in the fall of 2014. Activision has never disclosed release plans for Bungie's titles.

The first Destiny game will initially only be available on Microsoft's Xbox 360 consoles, as well as its potential successor, which the contract refers to as the "Xbox 720." Later games would be made for Xbox consoles as well as Sony Corp.'s expected successor to the PlayStation 3, and on personal computers.

Bungie would be entitled to royalties ranging from 20% to 35% of "operating income," the amount left over after Activision deducts its costs, including development, production and marketing expenses.

Under the contract, which may have been amended since it went into effect on April 16, 2010, Activision would also pay Bungie $2.5 million a year in bonuses between 2010 and 2013 if the Bellevue, Wash., studio meets certain quality and budget milestones. Bungie gets another $2.5 million if the first Destiny game achieves a score of 90 or better out of 100 on GameRankings.com, a site that summarizes reviews by game critics.

Sci-fi Call of Duty exclusive on 360. Isn't that what Halo 4 is going to be?

[gamadict]

I don't know how many people work at bungie, but $2.5 million doesn't sound like an awful lot for that scale of development

[Sarkus]

That's $10k/person/year if they have 250 employees. We're also talking about bonuses, not base project payments or royalties on sales. Doesn't seem like a bad deal to me, but I don't know how that compares to other independent developers.

[malkav11]

Always a good plan to port only the sequels in a series to other platforms while skipping the first game, so people on the other platforms have no idea what's going on.

[Timex]

Didn't Activision totally hose the IW guys? Maybe I only heard half of the story, but it seems like if they really did what I had heard, folks would be wary of working with them.

But then again, it's a lot of money, I guess.

[Robert Sharp]

By 'initially' it could mean an exclusive rights period, like we see with other games. Perhaps it may be ported, but only after a year or something.

In any case, I'm not sure how big the PC market for such games is anymore. If I were a company making a space action game, I'd go consoles first, unless there was a really good reason why my game would only work on the PC.

[Jason Becker]

I still don't get tying bonuses to critic scores. Who cares what the game gets if it sells 10 million copies. Also there are way to many shit websites that get to be included into gameranking/metacritic averages that there's no way in hell I'd want them having a factor in gettting a bonus.

[malkav11]

By 'initially' it could mean an exclusive rights period, like we see with other games. Perhaps it may be ported, but only after a year or something.

In any case, I'm not sure how big the PC market for such games is anymore. If I were a company making a space action game, I'd go consoles first, unless there was a really good reason why my game would only work on the PC.

If I were making pretty much any AAA game outside of a couple of specific genres (RTS being the big one) I'd probably lead on console these days. Just the reality of the market. But I'd still hit both HD consoles and PC. And if for some reason I wanted to leave one or more of those platforms out, I certainly wouldn't do it -just- on the first game in the series. I'd start on all three and then gauge which platforms to include on subsequent releases based on profitability. But that's just crazy talk, right?

And FWIW, I'm personally up for giving Bungie at least one game's worth of chance on any new franchise. They may have been stuck in the Halo ghetto for ages, but they still made the likes of Marathon and Myth once (and Oni, to a lesser extent). Hell, even Halo, while probably my least favorite of their games that I've played, is better than many PC gamers give it credit for. Just milked to death.

[JD]

By 'initially' it could mean an exclusive rights period, like we see with other games. Perhaps it may be ported, but only after a year or something.

The contract is rather explicit about this. This is not PR/marketing people speaking. If "Destiny #1" could get ported onto PC at some point, it surely would be mentioned due to the costs/obligations involved. Now Destiny #2 and so forth on the other hand...

[Brad Grenz]

Didn't Activision totally hose the IW guys? Maybe I only heard half of the story, but it seems like if they really did what I had heard, folks would be wary of working with them.

But then again, it's a lot of money, I guess.

It's actually pretty funny. At the time the IW dust up broke Bobby Kotick had just given a speech at DICE bragging about how Activision fosters creativity. Then, a couple months later they announced Bungie's 10 year deal. I think Activision was looking for good PR at the time, but lots of people wondered if Bungie had any regrets after the Infinity Ward situation blew up. Of course, Bungie is still independent of Activision as a company, so the situations are pretty different.

The contract is rather explicit about this. This is not PR/marketing people speaking. If "Destiny #1" could get ported onto PC at some point, it surely would be mentioned due to the costs/obligations involved. Now Destiny #2 and so forth on the other hand...

I'd say it's possible any exclusivity period is a legacy of the deal Bungie made with Microsoft to buy back their independence. It may just be the price of their freedom and both Activision and Bungie's hands are tied.

That said, looking at the language it mostly seems like Bungie, not having any experience on PS3 hardware when the contract was drawn up, did not want to commit to day and date on both platforms. The contract doesn't say they can't release a PS3 version the same day, it says they are not required to, but they should study the situation, make a technical and business determination and then target fall 2014 at the latest. They are also required to not make any choices in the game knowingly that will threaten the viability of a PS3 port. For all we know by March 2011, the deadline for that decision, Bungie had hired some good, experience PS3 engineers and decided a PS3 SKU is totally doable without any delay. They would have revised the contract at that point, whatever the outcome of the feasibility study so we don't know what the current version looks like.

[Sarkus]

A well-respected Seattle tech writer has chimed in on this contract and reached a conclusion I haven't seen elswhere, namely that it reveals that the XB360 successor will be out in the fall of 2013. Not a big surprise, of course, but interesting.

[Brad Grenz]

It doesn't really reveal that, it just assumes it will be out by then. The contract is 2 years old. For all we know, at the time Bungie and Activision may have been told it was launching in 2012. There have been rumors that MS pushed back their launch and went back to the drawing board on the hardware when many of their development partners complained the hardware was underpowered.

It's important not to read too much into the contract when it's pretty clear it assumes the situation will be fluid in regards to matters outside their control. It doesn't confirm the next Xbox will be officially named the "Xbox 720", it just uses that as a handy nickname. Nor can we say it confirms the PS4 will launch in fall 2015, just because Destiny #2 is coming out then on the PS4. These matters are subject to change based on market conditions, and the contract reflects that.

[Alex Hopkinson]

Wow, wrong thread! Ooops. Ignore me....