Call of Duty purchase intent "well above last year" - Hirshberg
Activision Publishing CEO still extremely bullish despite lower pre-order projections; ATVI also keeping close eye on F2P game in China
Colin Sebastian of R.W. Baird & Co predicts Call of Duty Advanced Warfare will sell between 18-20 million units - saying he expects it to ultimately be flat to down 10 percent compared to last year's Call of Duty: Ghosts. Sterne Agee analyst Arvind Bhatia says he expects fourth quarter shipments of the game to be down 15 percent versus 2013.
But Eric Hirshberg, CEO of Activision Publishing isn't worried. In fact, he says, he expects this year's installment of the series to do better than its predecessor.
"We see purchase intent well above last year and we see engagement with the brand in social media channels all being markedly up, so I'm still optimistic," he says.
Many of the analyst estimates, he notes, are based on preorders - sometimes from a single retailer. And given the evolution of the industry, where more and more people are downloading games directly to their Xbox or PlayStation, that makes those models less reliable.
"Preorders are a good barometer for day one, but I don't think they reflect the overall demand for the product," says Hirshberg. "[They] don't represent what they used to - because of the move to digital and all the ways people can buy the game."
"If you have to have a set of problems, I'd rather have those problems be that adoption is going faster than expected and (older) software is dropping faster than expected, because that points to the future"
Advanced Warfare, of course, is the first full Call of Duty game for Sledgehammer Games - and the beginning of a three-year development cycle vs. the previous two-year turnaround.
It's a move meant to reinvigorate Call of Duty after last year's Ghosts, which many fans felt failed to live up to the standards of previous installments, a problem that, if left unchecked, could speed up franchise fatigue.
And Hirshberg says the team's fresh eyes - combined with the experience they have with the franchise - makes Sledgehammer the perfect developer to launch this new era.
"Sledgehammer's ride with the company has been a roller coaster," he says. "They were brought on to do an offshoot of the series -a third-person game, which is still a game I want to play some day - but they got roped in to ride shotgun on development of Modern Warfare 3. And while we never would have designed it this way, it turned out great in hindsight, because it gave them a chance to cut their teeth on the franchise and ... how to deliver a Call of Duty game. Our brief to them was: Go further than you think we want you to go. Make us nervous in a good way - and come back with new ideas and new experiences ... and they did."
To help drive sales, Activision is offering consumers who buy the Xbox 360 or PS3 version of the game a free upgrade to the Xbox One or PS4 version - a good safety net for people considering a new console this holiday period.
It's also an obvious play to drive people toward next-gen machines, which is where the bulk of the company's development is these days. But Hirshberg says it's too early to determine if this will be the last Call of Duty on older platforms.
"We're making a big investment with [F2P] with our Call of Duty game in China... if there ever is a shift in the core business model here, we'll have a huge head start"
"Console transitions are hard to manage for companies like ours," he says. "But if you have to have a set of problems, I'd rather have those problems be that adoption is going faster than expected and (older) software is dropping faster than expected, because that points to the future."
Of course, while Call of Duty is front and center this week, it's hardly Activison's sole focus this holiday period. Destiny took in $325 million in its first five days and boasted the best launch month of any new IP in the industry's history. Hirshberg says players today are averaging three hours per day.
As it has with other franchises, there will be plenty of DLC for Destiny - but Hirshberg notes that some online speculation about how the company plans to support the game moving forward is a bit far fetched.
"Some people are imagining a more exotic business model for Desinty than we have in mind," he says. "We're going to have a steady stream of content and there's a lot more in store. We've got a 10-year vision mapped out with our partners at Bungie."
And Blizzard's success with the free-to-play Hearthstone hasn't gone unnoticed on the Activision side of the office. While Hirshberg says there aren't any plans to immediately begin offering free-to-play mobile versions of its core games in the U.S., the company is now paying even more attention to its free-to-play experiments in Asia.
"We're making a big investment with that model with our Call of Duty game in China," he says. "On a case by case basis, it has shown itself to be a powerful model and it does work well on certain platforms. ... We have a business model that works for our consumers here [in the U.S.] that is potent and strong. That said, if there ever is a shift in the core business model here, we'll have a huge head start."