Berg: Call of Duty’s Slowing Sales, and the Danger of Annualization
This past Sunday evening, Activision released the latest edition of the global smash franchise, Call of Duty. Titled Advanced Warfare, the 2014 model is as bombastic as any of the games’ predecessors – now boasting cybernetically enhanced exosuits, and an equally robotic Kevin Spacey (who lends his digital likeness to the game’s single player campaign). Like the years before, the game has come in with a massive advertising campaign, specialty flavors of Mountain Dew & Doritos, and an army of gaming hipsters raising their nose at it.
But something feels off. In years past, it felt like the release of CoD was a cultural moment. Even if you didn’t enjoy the series, it was impossible to escape the buzz of Activision’s military juggernaut. Best Buy parking lots would overflow with customers ready to storm in at midnight. Sales numbers would be paraded out within days of release, and the entire online infrastructure for consoles would crumble in the following days. The launch of Modern Warfare 3 was nothing less than a national holiday. More than 400 million dollars in product sold in the US & UK in 24 hours – the single biggest entertainment launch of all time.
That $400-million mark has come to haunt Activision in many ways. They still go out of their way to tout launch sales, but you’ll notice that their wording has subtly changed year over year. For Black Ops II, they reported $500-million sold – but that figure spanned the globe, rather than just the US & UK. Last year’s Ghosts was reported as having more than a billion in worldwide launch sales. In the fine print, that’s the valuation of stock that was shipped to stores – not sold to customers. While their press releases won’t admit it, the numbers show that Call of Duty has entered a decline.
Activision is no stranger to watching phenomenons lose their luster. Back in the early 2000s, there was seemingly no franchise bigger than Tony Hawk’s Pro Skater. It’s the first series that Activision ever decided to annualize – in other words, release every year. The promise of a new game in the franchise every November was great for the company’s bottom line, but proved grating to consumers. Sure, the games sold, but by 2007, the well had been run dry. After a poorly conceived reinvention that had players standing on a plastic skateboard in their living room, the plug was pulled. A more severe trajectory can be seen with the Guitar Hero franchise, which saw seven different games released during the course of 2009 alone. Two years later, Activision announced they would be getting out of the music game business – citing slumping sales.
The commitment to annualization ended up taking down more than just those two franchises; it ended up killing those entire genres. The last retail Tony Hawk game hit in 2010, and since then no publisher has greenlit another major skateboarding title. Guitar Hero counterpart Rock Band hasn’t seen a new release since 2010 either. Releasing so many options within a period of time to an audience is savvy business in the short run, but it has proven unsustainable. What’s the value of a brand that burns out after seven years when so many others have been kept alive for decades?
Call of Duty has been running for a decade at this point, though the brand didn’t reach “global phenomenon” status until 2008’s Modern Warfare. Since then, it’s been a consistent parade of games that promise bombastic single-player campaigns, lively multi-player environments, and an overall experience that dwarfs last year’s efforts. Starting with 2010’s Modern Warfare 2, the games are borderline indistinguishable from one another. If the numbers for Advanced Warfare can stay consistent with past year’s performance, then maybe Activision has found a way to make this model sustainable. But if the downward trend continues, it puts into question the value of military first-person shooters as a whole, from an investor’s standpoint.
Activision’s $400M achievement still haunts them, but it hasn’t proved to be a barrier for everyone. Last year, Rockstar Studios released Grand Theft Auto V and was able to double that figure in the same 24-hour timespan. That’s one franchise that hasn’t succumbed to the temptations of an annual schedule. The last console GTA was released in 2008, and Rockstar Studios spent the intermediate time creating other projects by building other brands that could hold value, should the cash cow of GTA ever run dry. Strategy is everything in the gaming industry, and perhaps soon we’ll see how Activision’s treatment of CoD shakes out.
Follow Chris Berg on Twitter @Mushroomer25
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