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Fight or flight. Those are the two options we have when faced with conflict. Activision, confronted with stiff competition, is choosing to fight … with its checkbook.
During a conference call with investors today, Activision executives voiced concerns that some big competition could draw consumers away from its games during the upcoming holiday season. Infinity Ward’s Call of Duty: Ghosts will go head-to-head with EA’s Battlefield 4, Skylanders: Swap Force will have to fend off Disney Infinity, and Blizzard All-Stars must try to find its way into a market crowded with Riot’s League of Legends and Valve’s Dota 2.
“The competitive landscape will likely require us to increase our sales and marketing for our three largest franchises,” Activision chief executive Bobby Kotick told investors. “This year we expect a number of well-established game franchises and well-capitalized new entries to compete directly for our consumers’ time and attention, particularly as some of our competitors have moved their titles to the back half of the year.”
Activision seems particularly concerned about Battlefield 4. That first-person shooter from developer DICE and Electronic Arts has brand recognition and is coming off its most popular release in its franchise history, 2011’s Battlefield 3.
In response to that, Activision is planning a giant ad campaign for the Infinity Ward title.
“We plan to continue building Call of Duty momentum with Call of Duty: Ghosts on Nov. 5 for Xbox 360, PlayStation 3, and PC,” Activision Publishing chief executive Eric Hirshberg told investors. “Ghosts will also be available for next-gen platforms and will be supported by one of the largest sales and marketing plans in the brand’s history.”
Ghosts introduces a new world with new characters for the Call of Duty franchise, but it also has a new graphics engine and a new subtitle. Activision might worry that fans will skip this game while waiting for a Modern Warfare that will never come.
“Console transitions are an opportunity to reestablish franchises, so we want to do that,” said Hirshberg. “We’re going to keep our ability to defend our market share vigorously.”
As Battlefield threatens Call of Duty, Disney Infinity targets Skylanders.
Infinity is Disney’s take on the interactive toys that Activision developed in the Skylanders series. Skylanders is now a $1 billion franchise for the publisher, so naturally it wants to defend that place in the market from the behemoth Disney. Infinity will offer players the chance to bring their toys into the games, only it’ll be able to capitalize on Pixar and other beloved Disney brands.
Activision won’t just have to fight Disney for games sales but also for precious shelf space at toy retailers.
Finally, on the PC, Blizzard is losing ground in terms of player engagement. Gamers are shifting from World of Warcraft to free-to-play MMOs and multiplayer online battle-arena titles like League of Legends and Dota 2.
WOW lost 1.3 million subscribers, and gamers are spending more time with those free-to-play competitive games. Blizzard has its own MOBA in the works, Blizzard All-Stars, but it’s going to face an uphill battle once it finally debuts.
Activision is still in a strong position. Call of Duty will likely still outsell Battlefield 4, but this is the first time in a while that Activision’s three billion-dollar franchises have faced competition this strong. That means you should probably get your DVRs ready, because the publisher is going to hit you in the face with as many ads for its games as you can stand.