To put that money in context outside of the gaming world, consider that the biggest movie opening weekend in history, Marvel’s “Avengers: Endgame,” grossed “only” $357 million, according to Box Office Mojo. The highest-grossing film in history, “Avatar” has grossed just under $3 billion since it hit the screens in 2009. “Modern Warfare II” has earned a quarter of this figure in just three days.
For years now, with “Grand Theft Auto V” becoming the highest-grossing entertainment product of all time and “Fortnite” dances taking over the nation’s schools, video games have played an ever-increasing role in our culture. Video games may seem mysterious or mysterious to people who don’t play them or organizations that still see them as children’s stuff, but one language that everyone can definitely understand is money. Here’s what Call of Duty cash means for Activision’s flagship franchise, the entire game industry, and the American culture it’s all about.
For starters: America loves Call of Duty
The first and most obvious thing is that the creators of Call of Duty are clearly offering something that a large number of gamers want to use. Despite declining sales figures following the release of “Call of Duty: Black Ops 4” in 2018 and “Vanguard” in 2021, Call of Duty games have consistently ranked among the best-selling console games of the year.
That might tell us something about American culture. Call of Duty is a juggernaut for a reason, and that reason is that people are willing to pay a lot of money to play the game every year when a new version is released. A lot of people do the same for EA’s Madden NFL franchise. It makes sense: The NFL is pure American culture. Also, it seems, are military simulations.
Call of Duty is not a reason to be obsessed with America’s military. From childhood, American children are presented with glorified soldiers, from the tin variety, to GI Joe, even Captain America. It’s debatable whether it’s harmless to be disillusioned with the outcome of war and military conflicts – especially when Call of Duty has blurred the lines between fantasy and reality – but it’s undeniable that many people are willing to pay to play soldiers.
Call of Duty touches on many topics on the front pages of newspapers across the country: military conflict, foreign policy ethics, heroism, American supremacy, terrorism, and that’s just in its single-player campaign mode. Game player interactions in multiplayer lobbies are divided into many other areas of sociology, good and bad. Given the massive popularity of 94 million players in August of this year – reaching 150 million in March of 2021 – it’s fair to think of Call of Duty as something beyond just a “video game” and a cultural touchstone.
What does this say about Activision Blizzard’s financial health?
The sales bonanza has emerged from a trough for Activision. Consider the past two years: With the release of “Call of Duty Mobile” in 2019, the company took the power of Call of Duty to new heights — according to Activision — and the free-to-play battle royale — downloaded by 650 million users globally. “Warzone” in Spring 2020. But last winter the company was hit with a sex discrimination and harassment lawsuit filed that summer by the state of California against Activision Blizzard, Activision’s parent company and the studio that developed Call of Duty. Duty. The annual installment of the franchise, World War II-based “Vanguard,” also fell short of sales expectations, and share prices fell from a high of $103 per share in February 2021 to $56.94 on December 1 of the same year. The company announced the following month that it would be acquired by Microsoft. (More on those results later.)
As expansive as the Activision Blizzard game portfolio is, with hits like “World of Warcraft,” “Overwatch,” and “Candy Crush,” Call of Duty has always been a staple for console gamers. In early summer 2022, the company announced its plans to reshape Call of Duty with “Modern Warfare II” and an updated version of “Warzone,” which will be released on November 16. The first of those two dates is already amazing. The success and in-game sales of the free-to-play “Warzone 2.0” could lead to further growth.
Whatever challenges the company faces, its Call of Duty sales revenue in 2022 won’t be among them.
Project Magma: Verdansk, the Gulag and the Untold Origins of ‘Call of Duty: Warzone’
What does this mean for Microsoft’s acquisition?
Microsoft’s acquisition of Activision has drawn some scrutiny from regulators in the UK, who seem to find merit in Sony’s position that if Microsoft makes the Call of Duty franchise exclusively for the PC and Xbox platforms, it will unduly destabilize the video gaming market. While the drop in sales is undoubtedly good news for Activision, will it also serve as proof that Sony’s argument is justified?
Given the “Modern Warfare II” revenue, it’s interesting to think about what the financial picture would look like if Call of Duty wasn’t available on PlayStation. “Modern Warfare II” is currently available on Xbox, PlayStation, Activision Blizzard’s PC Storefront, Battlenet and the Valve-owned Steam PC store. If this acquisition is completed and Microsoft makes certain arrangements, Microsoft’s ecosystem may be the sole beneficiary.
It’s surprising if Activision could achieve such staggering figures without access to Sony’s platform, which has significantly outsold the Xbox console in the past.
“Based on Activision Blizzard’s revenue, Sony is the third largest platform and accounts for 15 percent of publishers’ revenue,” said Joost van Dreunen, a lecturer in the business of games at the NYU Stern School of Business. “It’s not all related to Call of Duty, of course, but it represents about $400 million a year. Beyond revenue, a franchise as big as Call of Duty serves as a consumer acquisition tool.”
Xbox CEO Phil Spencer has publicly stated that Microsoft intends to keep Call of Duty on PlayStation, but there is no mechanism to prevent Microsoft from changing course after the merger, according to Mitch Stoltz, senior staff attorney at the nonprofit digital rights group Electronic Frontier Foundation. Given that, Stoltz said Sony’s stance around the potential loss of losing access to Call of Duty is a “valid concern.”
“I don’t know for sure that Microsoft will remove Call of Duty from PlayStation – it wouldn’t benefit them – but they might,” Stoltz said. “If they decide to remove Call of Duty from PlayStation, antitrust promoters can’t stop them without a binding promise not to. Essentially, the merger is the only chance for antitrust enforcers to stop Microsoft from making Call of Duty exclusive to Xbox, so I’m not surprised they’re stepping it up now.
Some maps based on Call of Duty real locations. Not everyone was happy.
What does this mean for Activision developers?
After the success of “Call of Duty: Mobile” and “Warzone,” Activision reallocated resources to studios developing other games to support its military sim juggernaut. The decision seems to be paying early dividends. Although the launch of “Modern Warfare II” wasn’t without hiccups (players getting booted out of the game when trying to play with friends on different platforms), it went much smoother than other recent high-profile games, such as Blizzard’s “Overwatch 2″ or EA’s ” Battlefield 2042.”
Will Activision continue to devote resources to making sure its cash cow is performing state-fair best for its player base? Whether that means more resources for Call of Duty’s many workers, including recently unionized quality assurance testers at Wisconsin-based Raven Software, will be something to follow in the coming year.
Will profits motivate Activision and other publishers to protect their cash cows?
This is where we enter into those aforementioned sociological issues. Yes, Call of Duty is a video game, but like many other modern games it also functions as social media, hosting a community of players. They can add friends, similar to Facebook, and interact with them in real time via voice or text chat in the lobby, or while playing cooperative or head-to-head missions. It’s nowhere near the big platforms like Facebook or TikTok or Twitter, but the size is significant. In 2021, Activision announced that Call of Duty has about 150 million active players (1/3 the size of Twitter, for example) thanks to the popularity of “Warzone”.
In many ways, these communities offer a common ground similar to country clubs. At their best, they provide an environment where players with a shared interest in games can relax and chat. But experiences in games are often largely created by those who play them — again, like many social media platforms — and can make for some unpleasant moments.
Video game companies promise to fight racism in their communities, but offer few details
At any time in the Call of Duty lobby — or any other multiplayer game with live voice chat — you can hear people going about their day, arguing with their family, reminiscing with a group of friends, accusing opponents of cheating, discussing the game. strategy or political decisions, spreading conspiracy theories, talking about the World Series, talking trash, or worse: hurling racial and homophobic insults at each other and bullying from afar while enjoying the anonymity provided by the GamerTag pseudonym.
Games offer safeguards to protect users from toxic behavior and tools to report it when it occurs. But enforcing these policies still requires game makers to actually police their communities. In 2020, following the killing of George Floyd, a video was posted on Reddit showing a series of blatantly racist usernames in “modern warfare”. Infinity Ward, the Activision-owned studio that made “Modern Warfare” in 2019 and now “Modern Warfare II,” admitted on Twitter that they “need to do better.”
“Modern Warfare II” features a screen that appears after installing the game that requires users to refrain from using offensive usernames and engaging in toxic behavior such as bullying or spouting slurs. Will the financial windfall encourage Activision to keep toxic elements, including cheaters, out of the game and outside scrutiny? Or will it convince those in charge that the community doesn’t need any fixing, instead fixing on their most recent bonus?
Shannon Liao contributed reporting for this analysis.