Activision Looking at CoD Subscription Model A loss in its fiscal fourth quarter has got the company thinking. By Mike Sharkey.
It appears Activision Blizzard is considering a potentially controversial new way to generate revenue. During yesterday's quarterly conference call, CEO Bobby Kotick hinted that the Call of Duty franchise will head the way of World of Warcraft and become subscription-based.
Activision Blizzard acts as the publisher of the Call of Duty games developed alternately by Infinity Ward and Treyarch. Though the franchise's latest installment, Modern Warfare 2, was the best-selling videogame of 2009 and generated more than $1 billion in revenue according to the NPD Group, Activision Blizzard still reported a $286 million loss in its fiscal fourth quarter. The loss was due, in large part, to the bottom falling out of the Guitar Hero franchise.
Conversely, Blizzard's World of Warcraft franchise continues to be a cash cow for Activision, raking in $15 subscription fees from a reported 11.5 million people every month.
Put the pieces together and you can understand the company's thinking: a financial loss, an enormously popular franchise, and a proven subscription model that generates a river of revenue. Kotick described the future of Call of Duty this way:
If you think about the success that we've had in other product categories on subscription, you can get a sense of the direction that we want to take that franchise. World of Call of Duty? Subscription fees on the game's online multiplayer? Kotick had nothing else to say on the matter, though the company did confirm that the next installment in the series is due out late this year.