Why is Call of Duty the most valuable franchise in gaming?
Why an Xbox exclusive Call of Duty is more valuable than any other exclusive
There’s a reason Microsoft is fighting so hard to gain ownership of video game publisher Activision Blizzard and PlayStation is fighting so hard to stop it - it is because its flagship game Call of Duty is the most valuable franchise in gaming. But WHAT makes it different from a warehouse full of format exclusive games?
A megaton in video game parlance refers to shocking news of seismic impact. It’s commonly used when an especially desirable game is announced as exclusive to one specific console platform. In the tribalistic rivalries of gamers this constitutes a ‘win’ an advantage that’s worth boasting about.
So when in January 2022 it was leaked that Microsoft one of the largest companies in the world was intending to buy Activision Blizzard, the largest third-party publisher in the West, for $68.7 billion there was nothing but lively media and public reactions - not all of it positive.
A year later and Microsoft’s bid has hit a few roadblocks. A business deal of this magnitude is now being scrutinised by trade regulators in the UK, the US and the EU for anti-competitive concerns. PlayStation’s CEO Jim Ryan warning them that if the deal goes ahead and Call of Duty goes exclusive to Microsoft’s Xbox console and PlayStation loses access it will have negative implications for the entire gaming industry.
In response Microsoft's president Brad Smith has asked the FTC to think of Call of Duty as just the same as any other exclusive. There's just one problem with this -this is misdirection! Call of Duty is different and it has something that no other publisher has been able to duplicate - no matter how hard they’ve tried.
Let's get something out of the way this discussion isn't about whether the Microsoft Activision purchase should or shouldn't happen as there's no morality with this, there's no good guys or bad guys. You've got two companies Microsoft and Sony and they're both trying to do what's best for themselves what's best for their customers.
The first Call of Duty a World War II era FPS was released in 2003 and since the second game’s release in 2005 it has explored war settings and gone on to become the annual pre-Christmas hit. The franchise has now sold over 400 million copies. Call of Duty is unique in that it's the only non-sport game franchise that has the production capability to be annualised but more importantly it has enough public demand for a new premium game every year and for it to sell so fantastically so let's look into this by examining the wider industry.
Before the reveal of Microsoft's intention to buy Activision Blizzard the legacy games media had a very snobbish opinion of Call of Duty players and the game. They deplored it for being a game played by the ‘uneducated’ masses, people who are not hardcore gaming enthusiasts and who don't know about indie games. There was an often shared meme of these ‘casual’ gamers who only buy two games per year which are Call of Duty and FIFA football, with the implication being that they are easily pleased and their taste in games is lacking. What the media doesn’t understand and has never understood is that the franchise resonated with so many people precisely because it has been delivering an exemplary gaming experience.
FPS games first person shooters are probably the most popular genre and so it's understandable that publishers and game hardware makers are going to want to try and emulate the success of Call of Duty. Over the years many have tried but it's impossible to really emulate what it has done. Sony has made a couple of valiant attempts, it has produced a couple of FPS franchises and they are Killzone which was generally well received and Resistance which is is set in an alternate reality version of the 1950s invading by aliens. And whilst these games had some success that led to sequels, they sold fairly well, they weren't able to transcend beyond the enthusiasts on PlayStation consoles. So they were successful - but they didn't reach megahit status. Likewise super publisher EA has also tried with its Battlefield franchise. It has released a series of FPS games that have tried to emulate the Call of Duty formula and some have been successful games and some very well reviewed. But as was the case with Sony, EA has not managed to emulate what Call of Duty has done. Even Microsoft that with its once chart-topping Halo franchise has stumbled with its last three games. So broadly speaking with all these games they've been made well, they've been made to a high standard and perhaps it's just something about the gameplay or perhaps it's something about the game world that just hasn't connected in that special way with a wider audience and that's why these games have never really managed to become something greater. Over many years multiple publishers have tried to capture lightning in a bottle but no amount of investment in a new in-development game can guarantee a hit.
Format exclusive games are so essential to the three console hardware manufacturers, Nintendo, Sony and Microsoft, because they offer a unique game that can only be played on one console family. This helps distinguish the platform by creating a unique association between the game, the characters and the platform. This means that the public understand if they want to play one of these exclusive games they have to buy the hardware to play it on. These format exclusive games whilst they can be wonderful they take years to produce so there is always a gap between games in the same series. So if we look at Halo 5 Guardians on Xbox it was released in 2015. Its sequel Halo Infinite was released six years later in 2021. The Last of Us was released on PlayStation in 2013. Its sequel The Last of Us Part II was released seven years later in 2020. Zelda Breath of the Wild was released on Nintendo in 2017. Its sequel Zelda Tears of the Kingdom will be released six years later in 2023. The extended development times of these titles is because they are made to be a premium AAA quality and they require a huge amount of manpower but the hardware manufacturers Microsoft, Sony and Nintendo simply do not have the capability to staff multiple teams, working on different games in the franchise in order to release a new game annually in the same way that Activision does with Call of Duty.
The only other company that has tried to annualise a non-sport franchise is Ubisoft with its Assassin's Creed series, action stealth adventures in historical settings. Every year between 2009 and 2015 it released a new game in the franchise and it did this by having multiple teams working on different games Assassin's Creed II released in 2009 sold over 9 million copies. Assassin's Creed Syndicate released in 2015 sold around four to five million copies -this is a clear drop in units sold, this is a clear drop in demand. Whilst part of the reason Assassin's Creed Syndicate sales dropped so much was because the game from the preceding year had bad press because of performance issues it also indicates that this game was suffering from franchise fatigue where the audience just did not want a new game every year so this is why Ubisoft decided to take two years before releasing its next game. The point being that Sony, Microsoft and Nintendo don't have the production capability to have a new game release every year. But more than that the public would probably tire off these franchises and if that wasn't the case then they would have likely built up their teams to be able to release a new game every year. At the end of 2022 the reaction to Greek action hero Kratos returning in God of War Ragnarok was ecstatic with many review top scores and huge sales - but would the game be receiving such a good reception if a new God of War was released every year?
Call of Duty is so unique because it has the production capability to be annualised but more importantly than that it has the public demand, the public desire for a new game every year. Activision Blizzard has built a formidable machine of multiple development teams that between them can release a new Call of Duty game every year. Each Call of Duty game is substantially different from the last so they feel new, they are thematically connected to each other ensuring that the public maintain interest.
Publisher Activision Blizzard said the latest game, Call of Duty Modern Warfare II topped $800 million in the first three days of sale making it the most lucrative launch in games history.
Every year there's a variety of different games released on PlayStation from first-party to third-party however the one constant is in the Autumn season of October, November is the release of a new Call of Duty game. It makes most sales at launch and then just before Christmas as people buy it for gifts. The franchise traditionally makes most sales on PlayStation. For the game released in 2021 Call of Duty Vanguard it made most of its first week sales in the UK on Playstation formats. It made 41% of its sales on PS5, 29% on PS4, 19% on Xbox One and 11% on Xbox Series X and S so that's a total of 70% on PlayStation and 30% on Xbox.
Call of Duty is not just a regular game it's consistently one of the bestselling games of the year on PlayStation. It’s an expected part of the PlayStation experience with more people choosing to play on PlayStation.
What will happen if the game goes true exclusive to Xbox?
Microsoft has apparently amended its offer so that it will remain on PlayStation for ten years but after that it will presumably become true exclusive to Xbox. So what impact will this have on PlayStation? Will this mean that the people enjoy the Call of Duty franchise will suddenly decide to stop playing it because it's no longer available on PlayStation? Probably not! They're going to want to continue playing it so they're going to go to wherever the game is available and if this means it is only available on Xbox then more than likely that they're going to to want to purchase the Xbox console. This might not happen immediately but it means that when the time comes to upgrading a console to the PlayStation 6 or 7 as the case may be, then if their favourite game is only available on this other platform, Xbox, and that's the game that they choose to play the most, then more than likely that's the platform they're going to buy next.
What happens if Call of Duty is kept for sale on Playstation but made free on Xbox Game Pass?
If Microsoft acquire Activision Blizzard and include Call of Duty with its game subscription service Xbox Game Pass, but keep the game available for sale on PlayStation then apparently nothing's really changed for PlayStation with the game's availability so that may seem to be an equitable solution. However, by being free on Game Pass this does change things! Call of Duty in the UK costs £70 which is a premium price and over the course of six years (the length of a console generation) that comes to a cost of £420 pounds, the price of a premium game console. So a PlayStation owner who enjoys Call of Duty and sees the price is £70 every year and then compares it to being effectively free with Xbox Game Pass. Then they will see this huge difference in how much it costs to play the game, so when buying a new console they're likely going to take that into consideration!
Bloomberg has reported that Microsoft president Brad Smith has told the FTC which is the US trade regulator he said that ‘PlayStation has 286 exclusive games compared with Xbox's 59 so the administrative law charge is going to have to decide whether going from 59 to 60 is such a danger to competition that he should stop this from moving forward’! He has used misdirection to compare Call of Duty to any other ordinary exclusive franchise. But as I've explained before Call of Duty is more than God of War, Call of Duty is more than a Last of Us, it is something different and unique precisely because of what it is. It is a fantastic coordination of business, of infrastructure and creative arts.
Sure PlayStation exclusives are well reviewed and sell well but that won't be enough if the most played, most sold, most loved franchise is removed from the PlayStation platform. This is the reason that Jim Ryan and Sony are fighting so hard to keep Call of Duty as it is on PlayStation. And if Microsoft gains this one exclusive which it has submitted this phenomenal offer for, then it believes that it will net all the previous people who are playing on PlayStation and it will attract them to its own Xbox platforms. Microsoft and Sony know the same thing; that it is a beloved franchise that can be annualised that's why Call of Duty is worth fighting for!