“Call of Duty” is characterized by dismal game results
NEW YORK — After a pandemic-driven boom, most major gaming companies disappointed investors in 2022 due to a thin release schedule and an economic slowdown that kept sales of all but the most popular titles shackled.
Ubisoft Entertainment SA, Nintendo Co, Electronic Arts Inc, Take-Two Interactive Software Inc and GameStop Corp all released results for the latest quarter that missed Wall Street’s expectations or shared a disappointing outlook for the start of this year.
Last year saw a shortage of blockbuster game releases, with several anticipated titles slipping into 2023.
Many of the big games that were released, like Ubisoft’s Mario + Rabbids: Sparks of Hope or Take-Two’s Marvel’s Midnight Suns, didn’t see the kind of demand publishers were hoping for.
In a sea of dismal results, Activision Blizzard Inc stood out for one clear reason: Call of Duty.
The latest in the blockbuster franchise, Modern Warfare II grossed over $1 billion (RM4.3 billion) in 10 days in October and was the best-selling game of 2022, according to industry researcher NPD Group.
Those results helped boost bookings by 43% over the last three months of the year, the biggest increase in nine quarters.
“Consumer wallets have tightened significantly for everything but the blockbusters,” analysts at KeyBanc Capital Markets wrote in a note following the results.
Strauss Zelnick, Take-Two’s chief executive officer, acknowledged this in his comments on the company’s results, in which the publisher of Grand Theft Auto and Red Dead Redemption lowered its guidance for financial bookings for 2023 and issued a disappointing guidance for the year current quarter.
“We believe consumers have shifted their holiday spending to established blockbuster franchises and titles.
“Some of these have been offered with price action given the macroeconomic conditions,” Zelnick said.
While Grand Theft Auto is one of the most lucrative video game franchises of all time, the next installment in Take Two’s series doesn’t have an official release date.
While much of the market hangs on a much-hyped new release, the industry is also learning to milk hits that have existed for years.
Many top gaming titles are no longer a one-time purchase of $60 (RM258).
They are designed as endlessly repeatable social experiences that are constantly updated with new content.
So-called service games like Grand Theft Auto V, launched in 2013 by Take-Two subsidiary Rockstar Games, are still seeing sustained sales. It surpassed 175 million units in the last quarter.
In these games, players can still purchase digital items or content expansions months or years after their release.
According to Chris Suh, EA’s chief financial officer, revenue from live-service games like Apex Legends accounted for 75% of the company’s business over the past 12 months.
In 2022, according to gaming analytics company NewZoo, the top three games released by monthly active users were 2017, 2011, and 2013.
Many analysts assume that the industry will start a trend reversal this year.
A packed calendar of lively releases from Activision Blizzard, Nintendo, and Square Enix Holdings Co could provide a boost.
Hogwarts Legacy, inspired by the Harry Potter series, is out tomorrow at Warner Bros Games.
In mid-January, pre-order data for the game suggested sales could break records.
Activision and Take Two shares are up more than 5% on Tuesday, while EA is up about 1%. – Bloomberg