If you followed Activision closely in the past year, you would know the stock ignored weak sell-through data from Call of Duty Ghosts (-30% vs. the previous Call of Duty), Skylanders, and even a one million subscriber decline in World of Warcraft over 6 months. Actual sell-through data for Activision’s catalog from reliable sources in the last 5 quarters were: -26% y/y, -6% y/y, -28% y/y, -44% y/y, and -10% y/y. The weak sales did not matter; the stock kept going up because of the narrative that “Destiny will be as big as Call of Duty/Halo/Grand Theft Auto and was going to save the day.”

On September 9th, Destiny came out. Conspicuously Activision didn’t send out review copies to web-sites like they normally do a week before launch. Then the reviews came out a few days later. They were awful. Three of the largest, most prestigious game sites gave Destiny a 6/10, which rarely happens for big games. I spent 19 hours finishing the game and I agreed with these negative reviews.

It was the biggest critical flop relative to expectations for a large budget title in a very long time. The market focused  on the poor quality of the game as being detrimental to the future potential of the franchise’s DLC and sequel sales. The Destiny franchise was now severely damaged.

The stock started to fall. Activision then added fuel to the sell-off with a Destiny sell-through press release of $325 million in 5 days. The market quickly realized Destiny is selling at a fraction of the rate of Call of Duty (COD: Black Ops 2 sold $500 million in 24 hours) and Grand Theft Auto (GTA V sold $1 billion in 3 days). The hopes and dreams of Destiny being the next Call of Duty or Grand Theft Auto were dashed.

The narrative of Destiny is “going to save the day” was no more and the market could also no longer ignore the secular decline of the core Call of Duty, Skylanders, and World of Warcraft franchises in the past year and the future.

Further Reading

Destiny
-week 2 sales sell-through down 78% week over week
-week 4 sales sell-through down 30% week over week
-leaked Bungie contract with Activision showing a 2 year cycle for Destiny sequels, Destiny intellectual property ownership by Bungie not Activision, and large royalty split
-Destiny game discounts: 17% off, 33% off
-Michael Pachter: “Destiny..is all but assured a solid Metacritic..We expect between 88-92″
-Michael Pachter after Destiny gets a Metacritic of 76: “That’s not good enough, I think, to support a recurring franchise”
-examples of “damage the relationship” to customer post ,another one , another one
-Activision uses reviews from no-name sites like Pocket Lint, Biogamer Girl, and Rebel Gaming in the center of national TV commercials
-6 key people left Bungie
-Veteran game journalists on Rebel FM podcast episode 230: Destiny nothing like what was promised when he visited Bungie for 8 hours “(promised) big place..personalized..what happened? Not what we have” “not only is Destiny critical disappointment..it will be a sales disappointment” “I don’t understand how it took 500 people to finish this game” “It’s doesn’t make sense to me” “where did all that !@#$ money go” “Call of Duty is falling down faster than they expected it to” “Call of Duty..fall apart faster than they can replace it..Destiny is not the game that’s going to do it”
-Game journalist Patrick Klepek on Destiny “it’s so tremendously bad”
-Shane Satterfield’s (ex-GameTrailers) insightful take on Destiny DLC

http://www.firstadopter.com/2014/10/07/why-activision-is-down-17-in-a-month/

Good, gymp a game take out its heart to sale later as dlc.

This is what you deserve.

So this guy is trying to spin Destiny as a failure by saying the sales have went down week over week? How many games sales haven't went down week over week? 0.01% of them?

If Activision lost money, it's not on Destiny.  They've already stated they've made more back than they put into it.

Are we seriously now supposed to believe that a new IP that sells over 6 million copies in under a month is a commercial failure?

If Activision is losing money on this game, holy shit. That's some mismanaged finances right there.

I would say, hope they learnt their lesson, but they never will

That's what they get for removing content for DLC.

So it begins.

And Another one bites the dust.
Mark my words, in two years big third partys will fall down or go mobile (maybe with an exception of Rockstar). The fate of Crytek awaits!

delighted for activision. couldn't have happened to a nicer company :p o destiny though it's sales are very good for a new IP can Destiny 2 sill make or break that franchise.

I think the thing is that while Destiny sold very good, it dropped very fast and as we still don't have any details on user activity from Bungie we don't know how many are still playing it so this builds a forecast for future DLC and upcoming successors for this game.
Destiny sold exceptionally good but the image seems hurt a lot currently and for months to come.