Analyst - Activision Must Begin Multiplayer Fees Publishers must find a way to profit off online multiplayer, says Pachter. US, July 16, 2010 by Jim Reilly
If the videogame industry is going to rebound from its decline in software sales, publishers will need to look at monetizing online multiplayer, said Wedbush Morgan analyst Michael Pachter in his latest investor report.
Pachter believes one of the main reasons software sales for PS3 and Xbox 360 are down year-over-year is due to gamers continuing to log substantial hours into a handful of online games and not picking up new titles regularly.
"We estimate that a total of 12 million consumers are playing Call of Duty Modern Warfare 2 for an average of 10 hours per week on the two platforms' respective networks, and the continued enjoyment of this game (along with an estimated 6 million Halo online players, 3 million EA Sports players, and 5 million players playing other games, such as Battlefield, Red Dead Redemption, Left 4 Dead and Grand Theft Auto) has sucked the available time away from what otherwise would be spent playing newly purchased games," he said.
Pachter also noted that Activision needs to make the first move with multiplayer charges, and expects we could see something with Call of Duty: Black Ops, set for release this November.
"We think that it is incumbent upon Activision, with the most popular multiplayer game, to take the first step to address monetization of multiplayer," said Pachter. "It is too early to tell whether that will be a monthly subscription, tournament entry fees, microtransaction fees, or a combination of all three, but we expect to see the company take some action by year-end, when Call of Duty Black Ops launches."
Pachter says he expects the publisher will apply a World of Warcraft-like business model to its Call of Duty franchise. Activision will likely continue to offer some form a free multiplayer for awhile, he says, but notes that it's imperative the company capitalizes on the estimated 4 billion hours of time spent online since the launch of Call of Duty: Modern Warfare 2 on Xbox Live and PlayStation Network.
"We are quick to point out that the average single player game has an expected play time of under 30 hours, suggesting that a staggering 133 million units of equivalent game play have been spent (so far) playing Call of Duty online, with Activision only seeing revenues from the original 20 million units sold, plus an estimated 8 million map packs sold," he added.
Activision hasn't been shy in the past about its intentions for some of its key franchises. The publisher has said several times it's looking at new online business models for Call of Duty and Guitar Hero.
In a recent interview, Activision CEO Bobby Kotick also made his displeasure known over closed online networks such as Xbox Live.
"We've heard that 60 per cent of [Microsoft's] subscribers are principally on Live because of Call of Duty," said Kotick. "We don't really participate financially in that income stream. We would really like to be able to provide much more value to those millions of players playing on Live, but it's not our network."
Okay, what are your opinions on it? (Subjective) Would subscription fees hurt the gaming industry or will it help economic wise? (Objective)
I know for the fact the average gamer's age is increasing and the target for the gamer's market is now late 20's or early 30's. This means game industry has room to grow economic wise (people who can actually buy the game is increasing, +potential buyers). Why do we buy video games? A lot of hardcore gamers probably say it's because it's fun. However, it's not only that. The price of games are relatively cheaper than a lot of other hobbies. I say it has a great fun : price ratio. As a passionate gamer, it hurts and I mean it really hurts if we have to pay for a game then pay subscription fees on top of that. I know there are games like WoW, however WoW as an MMORPG is an ever changing environment and that's what people are really paying for. Games like CoD takes little to no maintainance. If we are talking about subscription fees, we are talking about locking players into one game. Sure people will may have subscriptions for more than one game but think for a second, as a gamer how many subscriptions of games are you willing to buy? But seriously, wtf? Doesn't this discourage people from buying other games with subscription fees if you already have another game with a subscription fee? How is this helping the gaming industry economically?
This will not work, most of the Call of duty community will simply just not pay to play a FPS game which has had a free multiplayer service forever..
FPS's just don't have the same level of content provided in your average run of the mill MMORPG's these days, and unless CoD somehow becomes World Of Duty where you have an enormous open ended world with an incredible amount of content, I don't see a reason why anyone would bother with a P2P model.
It will not have a competitive scene (or probably a laughable one similar to WoW Arenas), and it will have an awful community.
Subscription fees are a sensible model when companies like Blizzard or CCP are constantly working on updating their service with a huge number of staff. Not just releasing a game and sitting back while they develop the next one.
I know I will never, ever buy a game with a subscription fee. I look at games as fun, not something I should be obligated to do, and paying each month forces me to feel like I need to play it in order to justify paying that money.
Well, think about it this way: let's say that instead of CoD5 being $60, it's $50 with a $3/month charge. This makes it so that the people who really enjoy the multiplayer and will get a lot out of playing it months and months from now will pay more for it than people who'll only play it for a couple months.
In other words, people who get more out of the game pay more for it. Doesn't that make sense?
meh it's all based on some stupid "gaming industry analyst". these guys are always really retarded about this sorta thing. i wouldnt worry about it at all.
This is exactly why I want Activision out of Starcraft 2. Activision's only goal is to suck every penny out of a game in the first year that it is released, so they can trash it for the next. In other words, they wish to make games with the highest popularity while having the lowest quality. Someone should really throw a brick through their window.
On July 18 2010 16:31 Chairman Ray wrote: This is exactly why I want Activision out of Starcraft 2. Activision's only goal is to suck every penny out of a game in the first year that it is released, so they can trash it for the next. In other words, they wish to make games with the highest popularity while having the lowest quality. Someone should really throw a brick through their window.
Activision has no control over StarCraft II whatsoever dude. All the fuckups are blizzard's alone.
its a shame when a company gets a monopoly and can get away with things like this. Something needs to replace COD or this is going to happen =/ "in the fps department"
On July 18 2010 15:33 motbob wrote: Well, think about it this way: let's say that instead of CoD5 being $60, it's $50 with a $3/month charge. This makes it so that the people who really enjoy the multiplayer and will get a lot out of playing it months and months from now will pay more for it than people who'll only play it for a couple months.
In other words, people who get more out of the game pay more for it. Doesn't that make sense?
yes but, do you really think they'll charge as low as $3 a month? and i have to agree with what the OP said, being an ex-WoW player, paying monthly was ok for me because WoW is constantly being updated and changed and CoD has little to no security, no mods, and is rarely updated
Don't players already pay a monthly fee to play Call of Duty over Xbox Live? It's like $50 for a year of Xbox Live, which is more than $3 a month. I don't think an additional cost on top of the Xbox Live subscription would work for Activision, since the console is so saturated with FPS games players would make the switch over to Battlefield or Halo.
Activision might have a good idea if they start pushing the PC side of their games as heavily as they are implying. They can afford to sell the game for less because a cut of the profits won't go towards the console manufacturer (they'll still probably make it a $60 package - maybe $50 for the single-player and $10 for the multi-player map pack). Personally I think this is a good move for everybody except for Microsoft. Activision won't have to turn out 4 COD games a year to make a profit, they just have to make one really good one which everyone will pay to play online, and maybe even foster a respectable competitive scene.
The only problem I see is moving over their millions of Xbox 360 sales to the PC. Monetizing the Xbox 360 network won't really work, since, well, like it says in the article it's not Activision's network.
when will activision realize that it's the uninspired content that's out there that kills sales?? besides the era that you fight in, there isn't a difference between any of the COD games. And there's tons of games that are clones of that genre of FPS.
polishing the same piece of shit and throwing it in a slightly different box only works for sports games. I'd simply go find a different FPS to play.
If it's too expensive don't buy it. Silly activision. A lot of people buy multiplayer games because of the guaranteed value over time. This destroys that value.
On July 18 2010 22:16 Hawk wrote: when will activision realize that it's the uninspired content that's out there that kills sales?? besides the era that you fight in, there isn't a difference between any of the COD games. And there's tons of games that are clones of that genre of FPS.
polishing the same piece of shit and throwing it in a slightly different box only works for sports games. I'd simply go find a different FPS to play.
I'm not even sure why it works for sports games.
I'd definitely pay for a subscription if it was a really good game. Obviously depends on the replay value. You pay for television, right? If you get the same amount of use and enjoyment out of the game it's pretty obvious that developers would want to cash in on it. Ultimately it's up to you to decide what a game is worth; no one can force you to subscribe.
EPT
