Activision Blizzard investors nonplussed by the consistently low share price and mealy dividend yield of the world’s biggest video game publisher are likely both exhausted and enthused by Call of Duty’s popularity. Ever since Infinity Ward propelled the shooter series to superstardom in 2007 with Call of Duty 4: Modern Warfare, Activision has released a new game in the series every November with increasing success. 2011’s Modern Warfare 3 outsold 2010’s Black Ops which in turn outsold Modern Warfare 2, etc.
Call of Duty: Black Ops 2 is no different, at least from a revenue point of view. Activision announced on Wednesday morning that its latest military shooter earned $1 billion in retail sales in just 15 days. Call of Duty: Modern Warfare 3 made $1 billion in 16 days, and Activision was quick to point out that the fastest earning movie of all time, James Cameron’s Avatar, took 17 days to earn the same.
“In order for Call of Duty to remain the entertainment juggernaut that it is, and keep out fans coming back for more, we need to continue to bring fresh ideas and new innovations to the table every time, while always staying true to what people fell in love with in the first place,” said Activision Publishing CEO Eric Hiirshberg, “That’s what we did with Call of Duty: Black Ops II, and that’s what we intend to keep on doing.”
How times change. Activision’s Guitar Hero III was the first individual video game in history to break $1 billion in sales back in 2009, almost fifteen months after it was first released. That Call of Duty: Black Ops 2 could do the same in a fraction of the time speaks volumes about the continuing strength of big budget gaming, but there are a couple of factors that need to be considered when assessing the game’s success.
First, Call of Duty: Modern Warfare 3 wasn’t the only major source of Call of Duty-related revenue in 2011. Last November, Activision sold 1 million paid subscriptions to the now free Call of Duty Elite service, approximately $50 million in additional revenue on top of Modern Warfare 3 sales. That revenue is gone from the Black Ops 2 sales landscape. Additionally, Activision had to spend more on Black Ops 2’s development, considering it needed to invest in resources to port that game over to Nintendo’s Wii U, another source of lost revenue mitigating the $1 billion milestone.
Finally, a difference of 24 hours in hitting a sales milestone is nothing to crow about. It means that retail sales are essentially flat with last year’s model. Black Ops 2’s performance to date certainly supports Stern Agee analyst Arvind Bhatia’s claim that the series is showing signs of decline. Will sales be down 15 percent year-on-year? We’ll see when Activision closes its fiscal year in March.