Technology

Activision Blizzard had a plan — or ploy — to launch its own Android game store

Until today, we’d never heard of “Project Boston”. It was Activision Blizzard King’s big plan to earn more money from its mobile games by changing its relationship with Google. And if things had gone differently, it would have given Activision Blizzard its own app store on Android.

In late 2019, according to internal emails and documents I saw today in the courtroom during the Epic v. Google trial, the company decided it was going to dual-track two intriguing parallel plans.

The first plan was to build its own mobile game store — either in partnership with Epic Games and Clash of Clans publisher Supercell or all by itself — to bypass the Google Play Store. You’d download it from a website, sideload it onto your Android phone, and then you’d be able to purchase, download, and patch games like Candy Crush, Call of Duty Mobile, and Diablo Immortal there.

In private emails with Epic CEO Tim Sweeney, Activision Blizzard CFO Armin Zerza pitched it as the “Steam of Mobile” — a single place to buy mobile games, with a single payment system. Documents suggest the store would charge a transaction fee of 10 to 12 percent, lower than the 30 percent fee Google (and Nintendo, Sony, Microsoft, and Steam) impose on gaming transactions.

If it worked, Activision Blizzard wrote, the company would attempt to do the same thing with the iPhone. The “end state goal,” according to the documents, was to put all of Activision, Blizzard, and King’s titles, and possibly third-party games, on Android first, with “Apple iOS to follow.”

But Activision Blizzard was ready to drop that entire plan cold turkey if its second Project Boston idea worked. The company was simultaneously negotiating with Google for a deal valued at over $100 million designed to “capture stronger economics for ABK across mobile, YouTube, advertising, media spend, and cloud.”

Either way, Activision Blizzard would make more money than it did simply sitting back and paying Google’s 30 percent fee.

In the December 2019 “Project Boston” document, it was clear that Activision Blizzard only intended to ultimately pick one of these two plans. “Should we secure real savings with Google, we would deprioritize path 2,” the company wrote in bold letters. Path 2 was listed as “Build own mobile store,” just to be crystal clear.

If Activision Blizzard had embarked on the “build own mobile store” path, we would have seen the store launch in 2019 or 2020 without much fanfare at first — it was planned as a very small project within the company, with a headcount of fewer than 70 people for the entire mobile store by 2021.

The idea was to launch the storefront first without marketing or promotions, and the company planned to begin by producing a minimum viable product (MVP) in 2019 — in this case, a pilot program that would only feature King games like Candy Crush, only launch in the US, and be led by King developers. (We saw a mockup of a Candy Crush app store purchase page in court.)

Optimally, the project proposed tasking as many as five Activision and Blizzard developers as well — and as many as three Battle.net developers — to onboard those brands’ games that much faster.

Candy Crush was planned as the app store’s gateway drug

By 2020, the plan was to “ramp” the mobile app store, adding new capabilities throughout the year like “multi account support” and “push notifications” and launch in more markets with more tools and support. By 2021, the framers hoped to reach an “ABK solution at scale” that would include all the company’s mobile games and more.

But that store never happened, because Activision Blizzard did sign Google to a deal worth far more than $100 million — and I saw the signatures of ABK’s CFO and Google’s Hiroshi Lockheimer on that deal in court. In January 2020, it signed a deal that, according to Google partnerships boss Don Harrison, now means there are “billions of dollars flowing between the two companies.”

Epic has alleged that Google effectively paid Activision Blizzard not to open its own competing app store with a so-called Project Hug deal, one of many deals Google made to fight the “contagion effect” — a phrase coined by Google in internal documents to refer to how it feared as many as 100 percent of top game developers would defect from Google Play following Epic Games’ lead, hurting Google’s app store revenue in the process.

But in court, Epic and Google’s lawyers, witnesses, and experts have been sparring over whether Activision Blizzard actually ever truly planned to launch that app store.

While it’s been clear from various Google testimony that Google believed there was a real threat, there’s certainly evidence that could instead suggest it was an Activision Blizzard ploy for leverage all along.

For instance, one of the “goals” of Activision Blizzard’s store pilot program was to “put pressure on Google (ongoing negotiations),” and ABK’s own CFO told the court that a staff of 45 to 70 employees seemed very low to actually ship a project like this at the company, when ABK typically puts hundreds of people behind such a project.

In his deposition, Zerza said the the app store idea was simply “very early exploratory discussions.”

“Obviously we never pursued it because it wasn’t financially attractive for us,” he said. Google gave the company a better deal, the one it apparently wanted all along. And, Zerza said, Activision Blizzard has continued to “look” at launching an app store in the years since. These days, of course, Activision Blizzard is owned by Microsoft — which would make the drama of a clash over mobile app stores all the more intense.

Related Articles

Leave a Reply

Back to top button