Life Left in Call of Duty: Ghosts
With its newly acquired independence from Vivendi, Activision Blizzard is putting its resources behind making the transition from current to next-gen gaming consoles. With Call of Duty: Ghosts on store shelves, the game has produced sales that are not as exciting as previous installments of the franchise amid rising competition from Take-Two Interactive and Electronic Arts .
Activision initially announced that Call of Duty: Ghosts had shipped $1 billion into stores in its opening 24 hours, but said that it was too early to announce sell-through numbers. This breaks tradition for the company who proudly announced when the last instalment of the "Call of Duty" franchise, Black Ops II, set the former record for most sales in one day with $500 million. That record was crushed earlier this year when Take-Two's Grand Theft Auto V reached $800 million in sales within 24 hours of its release. Activision had hoped to take back the record with Ghosts, but fell short for a few reasons.
Despite being a part of an immensely popular and consistent franchise, Ghosts has received disappointing reviews and has a Metacritic score of 74. This is lower than EA's rival military shooter Battlefield 4, which has an average score of 82.5. While not a unanimous opinion, many reviewers and gamers are unhappy with the new story and feel like the game only gives them more of the same "Call of Duty" experience that is released every year.
Adding to the game's struggles is the transition between current and next-gen consoles. The game was released a few weeks before the PlayStation 4 and Xbox One launches, which the company says has led to consumers holding off on purchasing the product. To combat this effect, the company is offering upgrade programs for consoles. Gamers can purchase Call of Duty: Ghosts for current-gen consoles and upgrade to the next-gen version of the game for $10 whenever they are ready.
Activision CFO Dennis Durkin stated in the company's most recent conference call, "the sell-through curve will be different than in past years due to the multiple launches of new hardware later in the month and more days between our launch and the high-volume Black Friday at the end of the month." So while there wasn't a record breaking launch, the company hopes that Ghosts' numbers will continue to grow into the holiday season.
Selling hard copies of "Call of Duty" games is important, but digitally delivered content accounts for 59% percent of Activision's revenue. This is high compared to EA and Take Two, who had digital revenue accounting for 33.46% and 9.36% of their total revenue respectively as of the most recent quarter. Keep in mind that Take-Two's revenue from physical products was inflated from Grand Theft Auto V sales.
Since its release, Ghosts has become the most played game on Xbox LIVE, with higher average player sessions than previous installments of the "Call of Duty" series. Single player campaign mode is important for the game, but online multiplayer is the real reason that a lot of people purchase "Call of Duty" games. Over 4 billion hours have been spent playing the franchise's online mode. Including digital and hard copy revenues, Call of Duty: Black Ops II has generated more revenue than any other game in history. With DLC (downloadable content) packs and Season Passes, Activision effectively monetizes its game year round. Next-gen gamers also have the option to download Ghosts instead of purchasing a hard copy of the game from a store.
Activision is certainly disappointed that Call of Duty: Ghosts did not get close to Grand Theft Auto V's sales record, but the game had a reasonable launch and is now the most popular game on Xbox LIVE. This instalment of the franchise is selling well, but how many more "Call of Duty" games can Activision produce before gamers lose interest and the shooter goes the way of Guitar Hero? The company plans on releasing another Call of Duty in 2014. With no console launches obstructing that game's launch, we will get to see a clearer picture of the franchises future. For now, though, Activision's cash cow is still alive but may be showing potential signs of sickness.
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The article Life Left in Call of Duty: Ghosts originally appeared on Fool.com.Ben Popkin has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard and Take-Two Interactive. The Motley Fool owns shares of Activision Blizzard. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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