The Real Reason Destiny Is a Hit

On a call with investors on Aug. 5, Activision Blizzard Chief Financial Officer Dennis Durkin was guarded in his outlook on Destiny, the company’s about-to-be-released shooter game. He cautioned that the game’s hefty software development and marketing costs—which analysts say may have already exceeded $300 million, with more coming for future enhancements—would weigh heavily on the company’s results in the third and fourth quarters. But he predicted the game would be “marginally profitable” by yearend.

Durkin’s timing may have been a bit off. Within 24 hours of the game’s introduction on Sept. 9, Destiny took in $500 million in online orders and shipments to retailers, a record for a video game that’s not a sequel. And if estimates by Wedbush Securities’ Michael Pachter and other analysts are right, Destiny probably moved into the black soon after Activision shipped its first game disc. “It’s an unquestionable success out the door for what appears to be an average game,” says Mike Hickey, an analyst at investment firm Benchmark Company. “For how much money they’ve put into it, being profitable is definitely an achievement.”