Activision Blizzard Inc.'s "Call of Duty" and Electronic Arts Inc.'s "Battlefield" are two of the videogame industry's signature shooting-game franchises. Now for the first time in a holiday season, both games are in a firefight with one another.
On Tuesday, Activision debuts the latest version in its "Call of Duty" series, dubbed "Call of Duty: Modern Warfare 3." The $60 game goes head-to-head against EA's just-released "Battlefield 3," with both games expected to be among the industry's top sellers this year. In the past, the companies have released their titles at different times of the year.
In a mark of the intensifying rivalry, EA isn't shying away from trash-talking "Call of Duty." EA's campaign promoting "Battlefield 3" features TV commercials and billboards with the tagline: "Above and Beyond the Call."
"We're having some fun," said EA Labels President Frank Gibeau. "We can't completely isolate ourselves from the fact that we're shipping in the same window as 'Call of Duty.'"
Activision has avoided responding to EA's barbs. "I have absolutely no comment on it and could care less about it," said Eric Hirshberg, head of the publishing unit of Activision, which has launched a "Call of Duty" marketing blitz with ads featuring actors Sam Worthington and Jonah Hill, and basketball star Dwight Howard.
The stakes in the face-off are high. The success of the games is critical to both companies this year as the two videogame makers have shifted strategy to release fewer, better-quality games every year, said ITG Investment Research analyst Matthew Jacob.
For Activision, "Call of Duty" makes up a third of the company's $4 billion in annual revenue, said Wedbush Securities analyst Michael Pachter. The last two games in the series, "Modern Warfare 2" in 2009 and "Black Ops" in 2010, both set sales records for the week after their release. Overall, the franchise has generated more than $4 billion in revenue.
EA has a more diversified games lineup, with hits such as the "Madden" football and "FIFA" soccer games. But it lacks a blockbuster in the shooting-game category on the scale of "Call of Duty" and needs "Battlefield 3" to flourish to make inroads in that genre this holiday season.
The two games are debuting at a time when videogame sales industrywide need a pick-me-up. In September, total U.S. game sales—including videogame console hardware and games—were $1.16 billion in the year to date, down 6% from $1.23 billion a year earlier, according to NPD Group.
Traditional videogame makers such as Activision and EA have seen their revenues stagnate as they struggle to plug into the fast-growing online social-gaming industry that Zynga Inc. has dominated. Zynga, founded in 2007, has filed for an initial public offering that could value it at $20 billion—close to the combined market capitalization of Activision and EA.
As a result, the games industry is banking on "Call of Duty" and "Battlefield" to reverse some of its fortunes. Wedbush's Mr. Pachter predicts that game releases last month, including "Battlefield 3" and "Batman: Arkham City," could increase October sales by 14% compared to a year earlier.
Indeed, "Battlefield 3," which debuted on Oct. 25, is selling strongly. EA's Mr. Gibeau said the game has had the most successful launch in the company's 29-year history, selling five million copies in the first week of its release.
But "Call of Duty" is a juggernaut. Activision has said its last two titles in the series sold about five million copies each—on the first day of their release. And while hardcore gamers will buy copies of both shooter games, most will stick to just one—likely "Call of Duty," said Wedbush's Mr. Pachter.
Mr. Gibeau conceded his rival's dominance. "At no point did I say we're going to take them out this year, but we're going to compete with them," he said.
Activision's Mr. Hirshberg said the company's only competition "is ourselves" and said that "Modern Warfare 3" was ahead of last year's record-breaking "Call of Duty" title in terms of pre-orders and other metrics. He declined to make sales predictions.
Analysts say Activision has another special weapon in its "Elite" service that goes with its game. For $50 a year, "Call of Duty" players can access a social network that keeps track of statistics like which gun players have the most success with. The "Elite" subscription also comes with downloadable maps. EA's "Battlefield 3" has similar services, but doesn't have a subscription model.
Still, some gamers say they plan to open their wallets for both games. Maria Ori, a 20-year-old college student in suburban Vancouver, British Columbia, said she'll give "Battlefield 3" a shot because she wants to play that game with one of her friends. But she's most excited about "Call of Duty: Modern Warfare 3" because she's so familiar with the franchise.
On Tuesday, Activision debuts the latest version in its "Call of Duty" series, dubbed "Call of Duty: Modern Warfare 3." The $60 game goes head-to-head against EA's just-released "Battlefield 3," with both games expected to be among the industry's top sellers this year. In the past, the companies have released their titles at different times of the year.
In a mark of the intensifying rivalry, EA isn't shying away from trash-talking "Call of Duty." EA's campaign promoting "Battlefield 3" features TV commercials and billboards with the tagline: "Above and Beyond the Call."
"We're having some fun," said EA Labels President Frank Gibeau. "We can't completely isolate ourselves from the fact that we're shipping in the same window as 'Call of Duty.'"
Activision has avoided responding to EA's barbs. "I have absolutely no comment on it and could care less about it," said Eric Hirshberg, head of the publishing unit of Activision, which has launched a "Call of Duty" marketing blitz with ads featuring actors Sam Worthington and Jonah Hill, and basketball star Dwight Howard.
The stakes in the face-off are high. The success of the games is critical to both companies this year as the two videogame makers have shifted strategy to release fewer, better-quality games every year, said ITG Investment Research analyst Matthew Jacob.
For Activision, "Call of Duty" makes up a third of the company's $4 billion in annual revenue, said Wedbush Securities analyst Michael Pachter. The last two games in the series, "Modern Warfare 2" in 2009 and "Black Ops" in 2010, both set sales records for the week after their release. Overall, the franchise has generated more than $4 billion in revenue.
EA has a more diversified games lineup, with hits such as the "Madden" football and "FIFA" soccer games. But it lacks a blockbuster in the shooting-game category on the scale of "Call of Duty" and needs "Battlefield 3" to flourish to make inroads in that genre this holiday season.
The two games are debuting at a time when videogame sales industrywide need a pick-me-up. In September, total U.S. game sales—including videogame console hardware and games—were $1.16 billion in the year to date, down 6% from $1.23 billion a year earlier, according to NPD Group.
Traditional videogame makers such as Activision and EA have seen their revenues stagnate as they struggle to plug into the fast-growing online social-gaming industry that Zynga Inc. has dominated. Zynga, founded in 2007, has filed for an initial public offering that could value it at $20 billion—close to the combined market capitalization of Activision and EA.
As a result, the games industry is banking on "Call of Duty" and "Battlefield" to reverse some of its fortunes. Wedbush's Mr. Pachter predicts that game releases last month, including "Battlefield 3" and "Batman: Arkham City," could increase October sales by 14% compared to a year earlier.
Indeed, "Battlefield 3," which debuted on Oct. 25, is selling strongly. EA's Mr. Gibeau said the game has had the most successful launch in the company's 29-year history, selling five million copies in the first week of its release.
But "Call of Duty" is a juggernaut. Activision has said its last two titles in the series sold about five million copies each—on the first day of their release. And while hardcore gamers will buy copies of both shooter games, most will stick to just one—likely "Call of Duty," said Wedbush's Mr. Pachter.
Mr. Gibeau conceded his rival's dominance. "At no point did I say we're going to take them out this year, but we're going to compete with them," he said.
Activision's Mr. Hirshberg said the company's only competition "is ourselves" and said that "Modern Warfare 3" was ahead of last year's record-breaking "Call of Duty" title in terms of pre-orders and other metrics. He declined to make sales predictions.
Analysts say Activision has another special weapon in its "Elite" service that goes with its game. For $50 a year, "Call of Duty" players can access a social network that keeps track of statistics like which gun players have the most success with. The "Elite" subscription also comes with downloadable maps. EA's "Battlefield 3" has similar services, but doesn't have a subscription model.
Still, some gamers say they plan to open their wallets for both games. Maria Ori, a 20-year-old college student in suburban Vancouver, British Columbia, said she'll give "Battlefield 3" a shot because she wants to play that game with one of her friends. But she's most excited about "Call of Duty: Modern Warfare 3" because she's so familiar with the franchise.
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