Bungie had a pretty dramatic start to the year when they broke off from Activision and retained the publishing rights for Destiny, and now Niko Partners analyst Daniel Ahmad has shared an interesting excerpt from a Security and Exchange Commission filing from the company about the split.
"In 2010, Activision entered into an exclusive relationship with Bungie, Inc. ("Bungie") to publish games in the Destiny franchise," the filing reads. "Effective December 31, 2018, Activision and Bungie, mutually agreed to terminate their publishing relationship related to the Destiny franchise. As part of this termination, Activision agreed to transfer its publishing rights for the Destiny franchise to Bungie in exchange for cash and Bungie's assumption of on-going customer obligations of Activision."
"Going forward, Activision no longer has any material rights or obligations related to the Destiny franchise. As a result of the agreement to terminate the relationship, the Company recognized net bookings, a key operating metric, of $20 million, GAAP revenues of $164 million, and GAAP operating income of $91 million for the year ended December 31, 2018."
A lot of people assumed this means that Bungie bought the rights for the revenue price, but ResetEra user BadWeddingSpeech clarified things a little:
"That is not necessarily what they sold the publishing rights for."
"Purchase Price is a defined term in most Purchase and Sale Agreements, and that is not what provision we were reviewing. More than likely it is in section 2.1 of the contract (definitions being section 1). It's just a guess. The best way to figure this out will be to review their SEC 8k (if this was a triggering event), or the 10Q when it's released."
In short, as reported by PCGamesN, we don't know what exactly this information means in terms of whether these numbers have been paid from Bungie to Activision in their entirety or whether it represents deferred revenue as a result of the termination, but these are still big numbers for Activision nonetheless.
We already know that the publisher wasn't satisfied with the results, because saying that Destiny was "not meeting our expectations", so it seems as if this is just another bit of evidence pointing to the fact that this split was beneficial for both parties.
Where do you want to see Destiny go now?
