Thursday, February 10, 2011

Does Activision's survival rely too much on Call of Duty?

Activision Blizzard will cut around seven per cent of its global work force – around 500 people, as it restructures business units.

The company is struggling somewhat at the moment, in part due to a lack of interest in its Guitar Hero franchise. That lack of interest will cause the publishing giant to drop its dedicated Guitar Hero business unit.

This doesn’t mean Guitar Hero will go away, just that it will no longer see the same level of focus from Activision going forward.

Call of Duty looks to be the main thrust for Activision going forward, and mentions of a micro-transaction model being developed for the Chinese market is perhaps a sign of things to come.

MMORPGs have slowly been shifting to a similar model – in concept free to play, but as the player becomes more involved in the game world, the cost of playing (buying special items, unlocking places to explore) starts to jump.

Call of Duty has traditionally been free to play, so it will be interesting to see if Activision is capable of providing enough incentive for people to buy additional in-game goodies.

The stakes are high. Despite the staff cuts, Activision Blizzard is channelling additional resources into the Call of Duty brand, and is building a new studio – Beachhead, to focus on online play.

With the value of the Tony Hawk franchise also on the wane, Activision really needs the various Blizzard properties (World of Warcraft, Diablo 3, Starcraft 2) and Call of Duty to keep it profitable. A backlash against any microtransaction system put into place could cost the publisher dearly.

Of course, this might not happen at all - microtransaction models are more common in China, to counter piracy, which is a greater threat to box product sales. Call of Duty might well remain completely free to play in the West into the forseeable future.

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