Call of Duty made $800 million in one weekend. Here’s what that means.



Comment

A Tuesday morning news release from video game publisher Activision included a staggering figure. Counting presales, “Call of Duty: Modern Warfare II,” the latest installment of Activision’s mega-popular military sim franchise, exceeded $800 million in sales in the three days following its Oct. 28 release.

The $800 million in sales includes preorders of the game, but it also represents the biggest first weekend in the history of the Call of Duty franchise, topping the previous high-water mark of $775 million established in 2011 by “Call of Duty: Modern Warfare 3” over five days. (The newest Modern Warfare games from 2019 and this year are a reimagining of the original Modern Warfare trilogy.)

To put this money in context outside of the gaming world, consider that the largest movie opening weekend in history, Marvel’s “Avengers: Endgame,” earned “just” $357 million, per the figures of Box Office Mojo. The highest-grossing film in history, “Avatar,” has earned just under $3 billion since it hit screens in 2009. “Modern Warfare II” just earned over a quarter of that figure in three days.

For years now, as “Grand Theft Auto V” became the top grossing entertainment product of all time and “Fortnite” dances swept the nation’s schools, video games have played an ever increasing role in our culture. While video games may seem insular or mysterious to those who don’t play them, or institutions that still see them as kids’ stuff, the one language everyone can certainly grasp is money. Here’s what all that Call of Duty cash means for Activision’s flagship franchise, the game industry as a whole and the American culture in which this all resides.

For starters: America loves Call of Duty

The first and most obvious takeaway is that the makers of Call of Duty are clearly serving up something that a significant number of gamers want to consume. Even as the sales figures ebbed following the releases 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.

This should probably tell us something about American culture. Call of Duty is a juggernaut for a reason, and that reason is people are willing to pay a lot of money to play the game when the new version releases every year. A lot of people do the same for EA’s Madden NFL franchise. That makes sense: NFL is pure American culture. So too, it appears, are military simulations.

Call of Duty isn’t the cause of America’s obsession with the military, of course. From childhood, American kids are presented with glorified soldiers ranging from the tin variety to G.I. Joe to even Captain America. There are debates to be had over whether this is harmless or could lead to disillusionment about the impact of war and military conflicts — particularly when Call of Duty has sometimes blurred the lines between fantasy and reality — but it’s undeniable that there are plenty of people willing to pay to play soldier.

Call of Duty intersects with a lot of topics covered on the front pages of newspapers nationwide: Military conflicts, foreign policy ethics, the concept of heroism, American hegemony, terrorism — and that’s just in its single-player campaign modes. The interactions of the game’s players in multiplayer lobbies branches into numerous other areas of sociology, for better and worse. Given its massive popularity — 94 million players in August of this year after reaching 150 million in March of 2021 — it’s well worth thinking of Call of Duty beyond a mere “video game” and more as a cultural touchstone.

What does this say about Activision Blizzard’s financial health?

The sales bonanza marks an emergence from something of a trough for Activision. Consider the last two years: The company rode Call of Duty’s potency to new heights following the release of “Call of Duty Mobile” in 2019 — downloaded by over 650 million users globally, according to Activision — and the free-to-play battle royale “Warzone” in the spring of 2020. But by last winter, the company was dogged by fallout from a sexual discrimination and harassment lawsuit filed that summer by the state of California against Activision Blizzard, the parent company of Activision and the studios that develop Call of Duty. The franchise’s annual installment, the World War II-based “Vanguard,” also fell short of sales expectations and stock prices plunged from a high point of $103 per share in February 2021 to $56.94 on Dec. 1 that same year. The company announced the following month it would be acquired by Microsoft. (More on those implications later.)

For as expansive as the Activision Blizzard game portfolio is, including hits like “World of Warcraft,” “Overwatch” and “Candy Crush,” Call of Duty has always served as its core product for console gamers. In the early summer of 2022, the company announced plans to reshape Call of Duty with “Modern Warfare II” and an updated version of “Warzone,” which will release Nov. 16. The first of those two dates has already been a staggering success and could be further fueled by in-game sales from the free-to-play “Warzone 2.0.”

Despite any challenges the company continues to face, its Call of Duty sales revenue does not figure to be among them in 2022.

Project Magma: The untold origin of Verdansk, the Gulag and ‘Call of Duty: Warzone’

What does this mean for the Microsoft acquisition?

Activision’s acquisition by Microsoft, the tech giant behind Xbox, has earned some scrutiny from regulators in the U.K., who seem to have found merit in Sony’s position that, should Microsoft make the Call of Duty franchise exclusive to PC and Xbox platforms, it would unfairly destabilize the video gaming market. While the sales windfall is undoubtedly good news for Activision, will it also serve as evidence that Sony’s argument is justified?

Given the “Modern Warfare II” revenue, it’s interesting to consider what the financial picture would look like if Call of Duty were no longer available on PlayStation. “Modern Warfare II” is currently available on Xbox, PlayStation, Activision Blizzard’s PC storefront, Battle.net, and the Valve-owned Steam PC store. If this acquisition went through and Microsoft made some exclusivity arrangements, Microsoft’s ecosystem could be the sole beneficiary.

It’s worth wondering, though, if Activision could achieve such a staggering figure without access to Sony’s PlayStation platform, which has significantly outsold Xbox consoles in the past.

“Based on Activision Blizzard’s earnings, Sony is the third largest platform and accounts for 15 percent of the publisher’s revenue,” said Joost van Dreunen, a lecturer on the business of games at the New York University Stern School of Business. “Beyond the revenue, a major franchise like Call of Duty serves as a consumer acquisition tool.”

Xbox CEO Phil Spencer has publicly stated Microsoft intends to keep Call of Duty on PlayStation, but there is also no legal mechanism to stop Microsoft from changing course after the merger, according to Mitch Stoltz, senior staff attorney for nonprofit digital rights group Electronic Frontier Foundation. Given that, Stoltz said Sony’s posturing around the potential loss of access to Call of Duty is a “valid concern.”

“I don’t know for sure that Microsoft would remove Call of Duty from the PlayStation — it might not benefit them — but they might,” Stoltz said. “If they did decide to remove Call of Duty from the PlayStation, the antitrust enforcers couldn’t stop them unless they had made a binding promise not to do that. Essentially, the merger is the antitrust enforcers’ only opportunity to stop Microsoft from making Call of Duty exclusive to the Xbox, so I’m not surprised they’re raising it now.”

Call of Duty based some maps on real places. Not everyone was happy.

What does this mean for Activision developers?

Following the success of “Call of Duty: Mobile” and “Warzone,” Activision reallocated resources at studios developing other games to support its military sim juggernaut. The decision appears to be paying early dividends. While the “Modern Warfare II” launch has not been without hiccups (players have been getting booted from the game when trying to play with friends on different platforms), it has gone far smoother than that of other recent high-profile games, such as Blizzard’s “Overwatch 2” or EA’s “Battlefield 2042.”

Will Activision continue to devote resources to make sure its cash cow is presenting its state-fair best to its player base? Whether that means more resources for Call of Duty’s many laborers, including the recently unionized quality assurance testers at Wisconsin-based Raven Software, a subsidiary of Activision, will be something to follow in the coming year.

Will profits prompt Activision and other publishers to safeguard their cash cows?

This is where we get 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 and communicate with them in real time through voice or text chat in lobbies or while playing cooperative or head-to-head missions. It is nowhere near as big as platforms like Facebook or TikTok or Twitter, but the size is noteworthy. In 2021, Activision announced Call of Duty had around 150 million active players (roughly one third the size of Twitter’s userbase, for example) thanks to the popularity of “Warzone.”

In many ways, these communities offer a common ground, akin to a country club. At their best, they provide an environment where players with a shared interest in a game can relax and chat. But the experiences often encountered in a game are largely produced by those playing it — again, just like on many social media platforms — and can produce some unsavory moments.

Video game companies vow to fight racism in their communities, but offer few details

At any given time in a Call of Duty lobby — or any other multiplayer game with live voice chat — you could hear people catching up on their day, fighting with their family, reminiscing with a group of friends, accusing opponents of cheating, discussing game strategy or political takes, spreading conspiracy theories, talking about the World Series, trash talking (or worse: hurling racial and homophobic insults at one another), and bullying from a distance while enjoying the anonymity provided by gamertag pseudonyms.

Developers offer safeguards within their games to shield users from toxic behavior, as well as tools to report it when it’s encountered. But this still requires game makers to actually police their communities to enforce these policies. In 2020, following the killing of George Floyd, a video was posted to Reddit showing a series of explicitly racist usernames in “Modern Warfare.” Infinity Ward, the Activision-owned studio that made “Modern Warfare” in 2019 and 2022’s “Modern Warfare II,” admitted on Twitter they “need to do a better job.”

“Modern Warfare II” features a screen that appears after installing the game requiring users to acknowledge a pledge they will refrain from utilizing offensive usernames and engaging in toxic behavior like bullying or spouting slurs. Will the monetary windfall provide an incentive for Activision to keep toxic elements, including cheaters, out of the game to avoid criticism and outside scrutiny? Or will it convince those in charge that the community does not need any fixing, instead fixating on their most recent bonanza?

Shannon Liao contributed reporting to this analysis.

Source