Activision’s juggernaut of a franchise, Call of Duty, will finally show chinks in its armour.
Make no mistake about it, it’s still a massive franchise as evident by the $500 million in revenue the game generated for Activision and Treyarch in the first week of its launch.
However, analyst has predicted that the sales for their latest game Black Ops 2 will show a 15% YoY decline due to changing market trends. Activision has to take these reports seriously because the games generate 40 to 45% of the company’s EBIT.
Sterne Agee analyst Arvind Bhatia said that, “Our checks show initial sales of CoD: Black Ops 2 at some retailers were down as much as 20%.
“Subsequently, it appears sales of CoD did pick up a bit over the Thanksgiving holiday. We think the current sales curve suggests unit sales in its first year could ultimately be down 10 to 15% year-over-year.
“If we are right, this would be the second year in a row this critical franchise will have seen units decline. We estimate CoD generates 40 to 45% of the company’s EBIT (earnings before interest and taxes) on an annual basis and it goes without saying that weakness in this franchise is a cause for concern.”
Black Ops 2 came out earlier this month and has been received very well by critics and gamers alike. Call of Duty franchise may decline now since it’s the same thing mostly every year, but the company will still make a significant amount of money–probably in billions considering the sheer amount of copies it ends up selling.
Via GI International.