Bungie dumped Activision. (Destiny)

by narcogen , Andover, Massachusetts, Saturday, January 12, 2019, 07:12 (1943 days ago) @ Korny

Is what a true cynic would say. :P

But still, it is interesting that Activision would forgo their three game contract. Was the annual pass the Hail Mary that didn’t pan out?

There's no indication that this move was initiated by ATVI.

Their stock dropped 10% on the news.

The contract allows for early termination with notice by either side in case of uncured material breach (by either side).

The contract also allows for continued royalties and maintenance payments for 2 years following termination. (So terminating 2 years early doesn't have as dramatic an effect as one might think.)

Assuming there is no incurable material breach but all parties are amenable to termination, and Bungie is retaining all IP, it's reasonable to assume that this termination is negotiated, and that Bungie may be forgoing certain kinds of payments that they would otherwise receive if termination was for breach (2 years of payments for backend maintenance, for instance) and allowing ATVI to continue to receive income from Destiny products they have already published (including MTX from D1/D2) in return for ending the deal and letting Bungie keep all of its licenses.

The contract had a very narrow set of circumstances that could have led to ATVI actually owning the Destiny IP, and basically those would have constituted Bungie completely failing to deliver a sale-able product on time.