Game studio Bungie, known best for having created the Halo franchise and more recently the Destiny series, is splitting up with its longtime publishing partner Activision, the company said in a surprise announcement this afternoon. Bungie will retain the rights to Destiny, with plans to self-publish future expansions and new installments.
The two companies partnered back in 2010, after Bungie sold its Halo rights to Microsoft and embarked on its next big project, which ultimately became 2014’s online multiplayer shooter / RPG hybrid Destiny. As part of the terms of the deal, Bungie was to develop Destiny games for Activision for 10 years, though the developer has since clarified that the 10-year roadmap was never concrete.
“When we first launched our partnership with Activision in 2010, the gaming industry was in a pretty different place. As an independent studio setting out to build a brand new experience, we wanted a partner willing to take a big leap of faith with us,” the studio said in a statement. “We had a vision for Destiny that we believed in, but to launch a game of that magnitude, we needed the support of an established publishing partner.”
But now, we live in the era of free-to-play games like Fortnite that can be entirely sustained via microtransactions, as well as various other changes to gaming business models and design that have altered how developers earn money and keep software alive for months or years. So it seems it no longer makes sense for Bungie to stay connected to a large publisher like Activision, which also publishes the Call of Duty series and is part of the same company as Blizzard Entertainment.
“Looking ahead, we’re excited to announce plans for Activision to transfer publishing rights for Destiny to Bungie. With our remarkable Destiny community, we are ready to publish on our own, while Activision will increase their focus on owned IP projects,” Bungie said. “The planned transition process is already underway in its early stages, with Bungie and Activision both committed to making sure the handoff is as seamless as possible.”
As part of the original deal, Bungie received likely hundreds of millions of dollars in both studio investment and marketing from Activision (terms of such deals almost never come to light in the game industry). In return, Bungie was tasked with creating both Destiny and its sequel Destiny 2, as well as numerous expansions for each game that would stretch out the life cycle of the software to around three years per title.
Activision also hammered out deals with Sony to deliver exclusive items, missions, and other perks to the PlayStation audience of Destiny, which has long irked Xbox fans. It’s unclear if Activision intended Bungie to develop a Destiny 3, or whether Bungie’s split with the publisher means it may now simply treat the game as an ongoing service that could be sustained with a subscription fee.
Cracks in the Bungie-Activision relationship have been showing for quite some time, with fans long suspecting the publisher was behind decisions to make Destiny 2 more palatable and accessible to mainstream players. That decision almost killed the game and forced Bungie to substantially rework the sequel when its first large expansion, Forsaken, launched back in September 2018. It’s also believed that Activision was behind Bungie’s increased focus on cosmetic items in Destiny 2 that can be bought with real money and not obtained easily by just playing the game, another source of contention between the studio and its community of players.
Kotaku’s Jason Schreier, who has long written about Bungie’s internal struggles developing the Destiny series, notes that the Activision deal has been a thorn in the studio’s side since the first game’s release:
At today’s meeting announcing the news, Bungie staff cheered loudly. Can’t over-emphasize how happy they are not just to get away from Activision, but to have a game that they now own completely. Imagine a Destiny free from Activision’s restrictive annualized schedule!
— Jason Schreier (@jasonschreier) January 10, 2019
Back in November, Activision said that Destiny 2 sales failed to meet the publisher’s expectations, with chief operating officer Coddy Johnson telling investors on an earnings call that, “We have not yet seen the full core re-engage in Destiny, which has led to the underperformance against expectations to date.” The news sent waves through the Destiny community, as many players again suspected Activision would pressure Bungie to further integrate microtransactions and attempt to juice more revenue from players.
Earlier in the year, meanwhile, Chinese internet giant NetEase invested $100 million in the game studio, meaning it has a solid financial safety net to let it experiment with how it wants to sell Destiny and other games. On that note, Bungie had already begun adjusting its release model for Destiny 2 to include a new annual pass that would let players pay up front for a year of scheduled content drops, with more transparency about what each expansion would include and what would require money versus what would become available for all players for free. Now that it’s no longer working with Activision, we may see Bungie tweak its annual pass model in the future to be more player-friendly upfront, depending on whether it plans to still release paid software in large chunks every few months.
Interestingly, employees of Epic Games, which self-publishes Fortnite, seem to be taking note of the news as a hugely beneficial move for Destiny, suggesting Bungie might at some point in the future distribute its games on PC through Epic’s new game store. Currently, Destiny 2 is distributed on PC through Blizzard’s Battle.net.
Self-publishing a game at this (or any!) scale is HARD. It’s not a switch you flip. Bungie will have to learn a lot, grow in new ways, and they may stumble. We did and still do. But when they come out the other side, the game and its players will see a huge benefit.
— Nick Chester (@nickchester) January 10, 2019