Destiny: Activision Split with Bungie Explained

Bungie’s split from Activision, ending a publishing partnership that spanned almost a decade, remains one of the more shocking recent corporate moves in the games industry. In the process, Bungie bought back the rights to publish Destiny, freeing itself to choose a new direction for the series, one that doesn’t involve a major publisher’s sales expectations.

According to an Activision Blizzard earnings call (via PC Gamer) in February, those exact sales expectations are what caused a rift between publisher and studio. In fact, back in November, Activision stated it was unhappy with how Destiny 2‘s major Year Two expansion, Forsaken, had performed, despite the fact that the expansion was solid and seemed to revive the community a bit. But another big factor, one Activision COO Coddy Johnson seems more concerned about than sales, is the fact that the publisher didn’t own the rights to Destiny (and therefore couldn’t make every last bit penny it could off the franchise). 

“First, as you know, we didn’t own the underlying Destiny IP,” Johnson said during the earnings call. “And we do for all our other major franchises, which we think is not just a differentiator for us in the industry, but also controlling the underlying IP gives us the chance to move into new experiences and new engagement models, which also come with new revenue streams and of course structurally higher economics, when you own the IP.”

Indeed, Activision has the freedom to do as it sees fit with first-party IPs like Call of Duty, Crash Bandicoot, and Skylanders, not to mention all of those top-tier Blizzard titles. But the deal with Bungie was much more restrictive — a 10-year publishing deal that gave Activision the exclusive rights to publish Destiny but not actual ownership of the franchise. Bungie had so many cards left to play in that deal that it was even able to break off from Activision two years before the deal was even over. Activision couldn’t release yearly Destiny installments or even as much as a free-to-play mobile Destiny game without Bungie’s permission. Naturally, money was being left on the table, according to Activision.

“And that leads to probably the second factor in our decision process, which is, Destiny is highly critically acclaimed, high-quality content, but it was not meeting our financial expectations.”

Destiny might still be a profitable venture for Bungie, which is reportedly already planning Destiny 3, on top of a whole new IP allegedly codenamed Matter, but according to Johnson, development on the loot shooter was taking away valuable resources from Activision, which just this week laid off nearly 800 employees in order to beef up its development teams further. In short, the break up seems to have been mutual, and both studio and publisher seem to be relieved. 

We’ll keep you updated as we hear more about Destiny and Bungie.

John Saavedra is Games Editor at Den of Geek. Read more of his work here. Follow him on Twitter @johnsjr9.