Battle fatigue could slow the advance of 'Call of Duty'
Video-game powerhouse Activision is bracing for battle fatigue as it unleashes the latest entry in its blockbuster Call of Duty series. Lucky for Activision, it has reinforcements at the ready that should leave it locked and loaded for a lofty holiday season.
Call of Duty is one of the best-selling video-game series of all time. But as Call of Duty: Advanced Warfare lands on Monday, investment analysts are tempering sales expectations for the second consecutive year.
Yet Wall Street expects Activision to handily top last year's revenue when quarterly earnings are announced Tuesday. Driving sales: online space epic Destiny, which was September's top-selling video game, and the kid-targeted Skylanders Trap Team, released Oct. 6. They are expected to drive Activision's third-quarter revenue 50% beyond the same period last year and help it match or beat Wall Street's estimates.
Fourth-quarter revenue is expected to beat last year's, too, with World of Warcraft: Warlords of Draenor, an expansion to Blizzard's popular, massively multiplayer online role-playing game out for PCs on Nov. 13.
'With Destiny, World of Warcraft, Call of Duty and Skylanders, Activision has some of the top franchises on console or PC, and this is arguably the best it's ever been for them,' says Digital World Research analyst P.J. McNealy. 'Having four strong franchises allows them to have a fallback plan should one falter.'
For years, Call of Duty has been the standard-bearer for Activision. Each of the last five editions of the annual series have generated more than $1 billion in sales. Over the franchise's 11-year lifespan, consumers have spent more than $10 billion buying more than 175 million Call of Duty games.
One concern for Call of Duty: Advanced Warfare ($60-up, for ages 17-up) is that franchise fatigue has set in. Some analysts forecast sales declines of 10% to 40%, compared to last year's Call of Duty: Ghosts.
Another worry: Some consumers have yet to upgrade to the latest game systems, the PS4 and Xbox One, both released in November 2013. 'They aren't necessarily in a software-buying mood,' says Piper Jaffray analyst Michael Olson.
Regardless, Wedbush Securities analyst Michael Pachter expects Advanced Warfare to sell about 21 million copies. 'This year's game looks phenomenal, and there is a lot less competition, so I think it will sell more than last year,' he says.
A scene from the video game 'Call of Duty: Advanced Warfare,' out Nov. 3.(Photo: Activision)
The recent $50 price reduction in the Xbox One (to $349 from Nov. 2-Jan. 3, 2015), 'helps a lot,' he says.
This is the first time that the game's developer, Sledgehammer Games, has taken the lead on a Call of Duty game, but it assisted on 2011's Call of Duty: Modern Warfare 3. 'It's an honor, but there's some pressure there to deliver something great,' says co-founder and Studio Head of Development Michael Condrey. 'Call of Duty has the best fans in the industry. They are very vocal and very passionate and they demand excellence.'
Sledgehammer decided to set the game 40 years in the future with the U.S. fighting not only a global terrorist group, but also a private military corporation - a Blackwater on steroids - led by hawkish CEO Jonathan Irons (Kevin Spacey).
The developers consulted with R&D experts for the military technology, allowing for sci-fi touches that include a body-fitting exoskeleton that gives the soldiers near-superpowers and the ability to fly through the air with a boost jump.
'We've really tried to put the player in some epic moments,' Condrey says.
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