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Calling the Elite

Fri 03 Jun 2011 12:00pm GMT / 8:00am EDT / 5:00am PDT
BusinessPublishing

The underwhelming nature of Call of Duty Elite disguises an experiment that could define Activision's future

Activision Blizzard

Headquartered in Santa Monica, California, Activision Blizzard, Inc. is a worldwide pure-play online...

activisionblizzard.c...

Activision Publishing

Activision, Inc. is a leading international publisher of interactive entertainment software products....

activision.com

Activision is a company built around two pillars. The first is World of Warcraft, a product which generates annual billion-dollar revenues from solid, predictable monthly subscriptions. The second is Call of Duty, a franchise whose billion-dollar credentials come from a monolithic boxed product launch just ahead of the holiday season each winter.

Everything else Activision does, to borrow an expression from Steve Jobs, is really just a hobby. Jobs was talking about Apple's underwhelming AppleTV product, but the term applies well to Activision's other titles. Some of them are pretty successful hobbies, like Blizzard's other franchises, but compared to the two brands that hold the company together, they're small fry.

Activision has announced something that's almost breathtaking in its inoffensiveness

As such, I'd imagine that Activision executives are plagued by one recurring nightmare - or at least, that they ought to be. What if one of the pillars cracks? What happens if one of those products falters - if the enormous figures generated by one of those beasts suddenly disappear from the publisher's bottom line? In a market as fickle as videogames, even splitting all your eggs between two baskets looks pretty overconfident.

If this does happen, though, it's unlikely to be World of Warcraft that suffers. Blizzard's genre-dominating behemoth may no longer be posting major growth figures (a problem in itself, in some regards, since the stock markets to which Activision is ultimately beholden are far more concerned with growth than with solid ongoing revenues) but it's certainly not in decline either. Its players have made a firm financial commitment, the kind which is hard to elicit in the first place but which, once obtained, tends to translate into immense loyalty to the game - a clear factor among a lot of WoW's player base, and indeed MMO player bases in general.

Call of Duty, on the other hand, is a lot more fragile. Where WoW players need to make a firm decision to stop paying for the game, CoD relies upon players making a firm decision each year to spend £40 on the latest version. The pressure this places on the brand is obvious - you're only ever as good as your last game, and one weak instalment, one year of bad word-of-mouth and negative consumer sentiment, and the following year's game could experience a slump that no amount of marketing dollars would ever fix.

There are two ways in which Activision can insure itself against such an eventuality. The first is to build more pillars - developing more IP of equal commercial potential to its present blockbusters. With the recent demise or "resting" of the Guitar Hero and Tony Hawk franchises, that's never been a more pressing need. The firm's partnership with Bungie is the most likely source of such an IP in the coming years, although it would be unwise to chalk that up as a sure thing - bear in mind that the last studio to go from working on a massive Microsoft IP to developing new IP for Activision was Bizarre Creations, and we all know how that ended.

The second form of insurance, then, would be to gradually steer CoD away from the risky business model it presently uses, and towards the much more reliable and stable model WoW uses. From a high-level business perspective, nothing makes more sense - or looks more attractive - than this idea. At a more realistic and detailed level, however, it's a concept fraught with problems, not the least of which is that the game's most vocal fans seem to loathe the idea.

The concept of a subscription version of Call of Duty was first mooted many months ago, and rumours about such a service were floating around until Activision announced details of Call of Duty Elite this week. It's fairly easy to see why the plans ultimately announced aren't remotely as wide-reaching or game-changing (literally) as those suggested by analysts and insiders up until now - quite simply, the reaction to those more radical plans has been hugely negative.

Instead, Activision has announced something that's almost breathtaking in its inoffensiveness. Call of Duty Elite's subscription service hasn't been entirely decided just yet, but it'll basically offer free content updates and an extra tier of statistics and community features of some description, for a small price. It's a service seemingly aimed solely at CoD's most ardent devotees, and with Activision promising that nothing on offer will provide an in-game advantage, those outside that band will have no reason to complain.

Call of Duty is a relatively fragile franchise - and fundamental changes to the business model count as a pretty serious kick in the shins for even the most robust of franchises

All of which is laudable, but equally, all of which probably means that Elite's impact on CoD's bottom line is going to be absolutely minimal. Which begs the question - why is Activision, a company which is totally clear about its intention to deal only with hugely profitable products, and totally ruthless in its implementation of that policy, bothering with this at all? Indeed, not just "bothering" - the company made a major song and dance about the unveiling, even securing mainstream newspaper coverage for the launch (much to the annoyance of the embargo-restricted specialist press).

There can only really be one answer - Activision sees this as the beginning of something much, much bigger. The company recognises that turning around a franchise like CoD is like turning an oil tanker - you can't just swing it around in the water, but must begin with a series of small, gradual course corrections. With Elite, it's testing just what percentage of CoD's player base see themselves as hardcore enough to want this kind of service - and furthermore, what percentage of those are actually willing to make a monthly financial commitment for it.

The results of this experiment will be fascinating. Those of us who are deeply engaged with gaming tend to live in something of a bubble, or an echo-chamber, and one of the possible false beliefs that may result from that is a belief that online gaming is far more important than it actually is. Specifically in the case of CoD, there's a tendency to see the game as primarily a multiplayer experience, with the singleplayer being something that people turn on in frustration when their broadband is playing up. However, there is certainly also an audience out there for whom CoD is a £40 annual investment for a 10 hour singleplayer game, with multiplayer as an added bonus only.

What is the ratio between those audiences? Online player figures (and CoD's are unquestionably huge) give us some idea, but it's really impossible to know. Equally, how many of the millions who play CoD online would be willing to pay for it, and how many would take off to other FPS franchises if asked to do so? Also impossible to tell - but CoD Elite may finally give Activision some insight into that question.

As to the future - while the innocuous nature of CoD Elite has calmed fears of CoD moving to a subscription model any time soon, I don't doubt that this remains something Activision would dearly love to do. The cautious approach, however, makes sense. After all, this whole effort stems from the basic fact that CoD is a relatively fragile franchise - and fundamental changes to the business model count as a pretty serious kick in the shins for even the most robust of franchises. It's a Catch-22 situation in a sense; to make CoD more robust, Activision may first have to risk seriously damaging it. What we're seeing right now is an attempt to reduce that risk. The softly-softly approach isn't normally in Activision's playbook - it's a company much happier being aggressive - but in this instance, it's the only way forward.

12 Comments

Mihai Cozma Indie Games Developer

124 34 0.3
I agree, Activision is certainly testing the waters here. If it won't work, nobody will suffer, if it does, they can push more towards this business model in the next reiterations of the franchise.

Personally, I won't pay anything for some extra stuff. Take Counter Strike for example, it doesn't need so many statistics and stuff to keep you playing it if you enjoy the game itself.

Posted:3 years ago

#1

Daniel Leaver Creative Director, Ambient Studios Ltd

23 4 0.2
Superb article, I agree wholeheartedly.

However, I believe there is one factor that may stand in the way of COD becoming subscription based as a business model in future, and it's not quality. Blizzard spend a vast amount of resources producing hours and hours of content for those subscribers every few months, with new dungeons, items and experiences to consume. I can't imagine how this could apply to COD.

New perks? Maps? Weapons and game modes? These are all possibilities, but for how long can you continue to add elements like this before things start to become impossible to balence?

In addition WoW is a single investment for the most part; it's 1 game that a player has put all of their time and money into. I imagine that one of the main reasons many MMOs fail is simply because of the vast amount of time and effort players have investing in WoW, and feel they simply can't imagine starting from scratch with a brand new game. However, COD is built on annual releases of a totally new game experience, with incompatible DLC and features. This model couldn't exist alongside a subscription too, else players would end up forking out £45 a year, plus another £100 or so to play online, all to abandon their characters, stats and K/D ratio 12 months later.

Maybe that's the plan! Who knows?

Posted:3 years ago

#2

Lewis Brown Snr Sourcer/Recruiter, Electronic Arts

199 56 0.3
Ive always thought that those 2 pillars as strong as they are offer a certain amount of risks. COD is still king currently but Black Ops wasnt as well recieved as MW2, so the total commitment I saw amongst my COD loving friends (not people in the games industry )who care nothing for metacritic etc...was wained by the fact they didnt see much difference to MW2. They are all still very excited about MW3 but also BF3 It will be interesting to see what happens come Autumn...I dont think WOW will go anywhere in the short and medium term at least....unless something else comes along....

Posted:3 years ago

#3

Taylan Kay Game Desginer, Nerd Corps Entertainment

60 103 1.7
Another problem with the CoD pillar is that it's essentially a genre-franchise, unlike the Warcraft franchise that has seen multi-genre games carrying the same name. Even WoW within itself appeals to different users for different reasons. CoD right now stands for fast paced FPS and little else, frankly, especially since they are painting themselves into a corner with more bombastic storylines with each game (where do you go after WWIII?). My guess is eventually they will have to hit the reset button on the franchise.

Posted:3 years ago

#4

Daniel Cleaton Head Honcho, ObSkewer Games Ltd

7 0 0.0
I'm one of those for whom CoD is a single-player game - I've never played any of the series online, but I've completed the campaigns in all of them except World at War - but I have several friends who practically live for CoD multiplayer and so I can totally see how Activision think this will be a money-spinner.

But, more importantly... This is both a tricky time to introduce this and, conversely, the perfect time. With Battlefield 3 coming out at pretty much the same time as the new CoD and looking a far superior package (IMHO), Activision need to lock in customers to their franchise before they might be swayed to the dark side - giving them something akin to the customer buy-in that a full subscription model offers, but without altering the prime purchasing method.

Considering the "perks" are already acknowledged to not be game-changing, this is surely all this subscription system can really deliver?

Posted:3 years ago

#5

Joseph Salerno Games/Level Designers - DBA

6 0 0.0
I have to say the quality of articles presented on gameindustry improved significantly recently.

That said, I would love to see number by age category and country. One of the most impressive feature of games like wow and cod are their ability to reach deep into both. Everybody knows their success can't last for ever, the competition is fierce and numerous, and it's only a matter of time before we see them start to erode, even if games appear to be able keep their fan base over a long period of time.

In the past, a franchise like PES was king of the world, FIFA did catch up but it's a moth point. The full sports genre declined. They are far from being lost into oblivion, but they are not shining as kings of sales boards anymore, and stopped flooding news and blogs all year round. This has a very high chance to happen to COD and WOW too.

... Go tell that to your investors!

Activision, to what I recall, was never that good of a development studio, They did hit the jackpot with guitar hero thou. Moreover, the development studio behind the success of COD did basically leave the ship. So to the question "Will vivendi activision be able to keep the MW franchise entertaining enough?", a move toward a subscription model is of course a "no". But what choice do they really have?

Posted:3 years ago

#6

Kingman Cheng Illustrator and Animator

954 183 0.2
I agree and sums it up very well.

I do wonder how much further CoD can go, they're already gotten into modern warfare.

Posted:3 years ago

#7

Joe Winkler trained retail salesman, Expert

171 4 0.0
@Kingman Cheng:

Maybe the next CoD (after MW3) will be a future FPS? or the past (wild west)? either way, it seems like they cannot top the 3rd World War (wich they announced).
The Cod Elite service will be something for statistic lovers therefore it will find it's fans.
Negativly spoken I would compare the service to free ones like bungie.net and the upcoming service in Battlefield 3 (rumored?).
Can be a good thing to approach (new) ways of online entertainment, with the many free alternatives it may totaly flop.

Posted:3 years ago

#8

Chris Tux Consultant

17 0 0.0
Great way to open the door for Battlefield 3!

Posted:3 years ago

#9

Hermann Rauth Game Audio Designer

10 1 0.1
My totally uneducated guess is that they're testing the field for what Bungie will ultimately do. I remember someone from Bungie saying something about an online world where you could always jump in and fight your battles and etc.
I think they're gonna test the financial response to this, gather what Blizzard knows about never ending content generation and Bungie's excellent approach on balanced FPS and voilŠ... MMOFPS.
Even as a hardcore Battlefield player who suffers from CODphobia I can get excited by this. :)

Posted:3 years ago

#10

Taylan Kay Game Desginer, Nerd Corps Entertainment

60 103 1.7
Things look worse and worse for Activision after learning BF3 will have the equivalent social features for free. You would think, since half the weight of their entire corporation leans on the MW pillar, they would focus more on innovating the gameplay. So far everything about MW3 screams "expansion pack".

Posted:3 years ago

#11

Graham Simpson Tea boy, Collins Stewart

219 7 0.0
Nonsense Taylan. The Elite package allows CoD players to connect. This has nothing to do with BF. Many games have similar features and both CoD and BF will have free networking features. Clearly where CoD is going is taking the CoD MP into a E-Sports arena.. and why not. It's a great idea. If people can still play counter-strike after all these years on the PC then why not a regularly updated CoD. Afterall Madden/FIFA etc have yearly iterations so why not CoD. People just resist because it's never been done before with a FPS. How many years in a row does ATVI have to produce a hugely successful CoD before people relent and accept it's a fact of life?

Further more this article does not mention the new MMO which is criminal. The next Blizzard MMO is the 10 ten ton gorilla in the room. How can you miss that.

Oh and I am one of those people who buy CoD for the cinematic SP experience, I'm more a PC BF MP'er.

Posted:3 years ago

#12

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