Nobody needs to be told that Call of Duty makes money. Everyone knows just how record-breaking the launch of Black Ops was, and how mainstream the online multiplayer has become. What many may not realize is that Activision's full name is actually Activision Blizzard since it joined forces with the MMO powerhouse behind World of Warcraft and StarCraft II. One fact has to be obvious to analysts: both of these companies have a massive community of people playing one of their titles, but only one of them requires a subscription. Wedbush Morgan analyst Michael Pachter believes that is going to change.
You can't argue that the Call of Duty franchise is strong enough to maintain a large audience, evident from the first day sales of Black Ops alone. And given how many of those players made their way onto multiplayer within the first 24 hours, it's safe to assume that for a large portion of purchasers the campaign is an afterthought.
This kind of dedication and fan following doesn't happen with every game, so Activision has to wonder if they are currently making the most out of CoD. Blizzard was successful with their previous Warcraft titles, but it was the shift to a massive subscription-modeled game that launched them into their current success. The demand for a military MMO may not be as high, but Activision can certainly charge players to play. At least, that's what analyst Michael Pachter believes.
Pachter recently spoke to Industry Gamers about his thoughts on the company's future, and their choice to avoid hurting Black Ops sales by announcing a subscription model before it launched. Pachter believes that even announcing that a 'premium' service for the game would have enraged the fanbase to such an extent that it was worth keeping quiet for now:
"Activision apparently worried that announcing multiplayer subscriptions before the launch of Black Ops would hurt sales. It's likely that around 60 - 70% of the people who buy Black Ops do so to play online multiplayer, and a greater number of the first week purchasers. Even if Activision retained fully free online multiplayer, the mere mention of a 'premium' subscription service will tick off some consumers, and there might have been a backlash at the precise time that they needed to set records. They decided not to take that risk."
Activision has put rumors of a subscription to bed, but Pachter believes that the subscription model would be much more complicated than a simple pay-to-play. Activision executives made it clear that they will never charge players for access to Call of Duty online, and Pachter says that free access to the multiplayer as it stands today won't be changing:
"I think everyone will be offered the same multiplayer options for free that they have now. In addition, I see premium items offered as virtual goods for a modest fee--let's say $1. There will be special weapons, armor, vehicles, etc. offered, and the quantity will keep growing, in the hopes that some meaningful percentage of gamers who play online multiplayer (I think it's around 14 million active users) pony up $1 or $2 per month on virtual goods.
"I think that the company will "tier" its offering by offering a $5 per month subscription to Black Ops that includes ALL virtual items for free, plus access to all map packs released as long as the player remains active. There are probably going to be three $15 map packs, so that feature alone has a perceived $45 value, and I'm sure that there will be dozens of virtual items, so the $5 subscriber will perceive some value from subscribing. In addition, the $5 subscriber may be offered exclusive tournaments, game play modes, ladders, achievements, and any other features that Activision can think up to induce them to pony up more money."
Pachter made it clear that he doesn't have any insider information, but has a fairly developed idea of the multi-tiered system that would be the most profitable for Activision. In his mind, a premium subscription wouldn't just give players access to extra content for a single game, but an all-access pass to WoW, StarCraft II, all CoD titles, and the new Bungie project for one flat rate:
"Next, I think Activision will offer a $15 monthly subscription that is an "all access pass", allowing subscribers to play WoW, StarCraft II (look for monetization there), the new Bungie game (when it comes out), all CoD games, and whatever they do with Guitar Hero (maybe free downloads of songs), on an unlimited basis. WoW subscribers will love this, since they already pay $15 per month. Of course, they'll have to buy copies of CoD in order to play, but this could spur growth on the PC online side of the game, and Activision would be able to keep all of the revenues, while they have to share with the console manufacturers for Xbox 360 and PS3 subscriptions."
Instituting such a system would be a big gamble, since it hasn't been tried for a property as profitable as Call of Duty. Activision will have to weigh the odds of keeping the status quo against being the first to take a console franchise to a new level. The company prides itself on its risk-taking and market knowledge, so there's no doubt some big decisions are in the process of being made at Activision.
Whether Pachter's conclusions are accurate or not is unknown, and only time will tell how delicate Call of Duty's position in gaming really is. We'll be sure to keep you posted on any and all Activision decisions, and the inevitable fan backlash against all of them.
Source: Industry Gamers