How Activision Blizzard's 'shooter pincer' will dominate the competitive console shooter for years to come

Seth Barton
How Activision Blizzard's 'shooter pincer' will dominate the competitive console shooter for years to come

When Activision acquired Blizzard back in 2008 via its Vivendi merger, the company had just released one of the most successful and influential shooters of all time - Call of Duty 4: Modern Warfare. The popular series went stratospheric, defining its console generation (especially the Xbox 360) and making levelling and RPG mechanics a core segment of the shooter genre.

Call of Duty became Activision's defining title from that day forth. Arguably it became gaming's defining title as well, maybe not an originator such as Star Wars or Lord of the Rings, but certainly an Avengers or Harry Potter. And despite the tribulations of 2016's Infinite Warfare, it remains amongst gamings top-tier brands.

Back to 2008, and Blizzard was reaping profits from the fattest years of World of Warcraft. Having recently released Wrath of the Lich King, player numbers were heading up to a peak of 12m a year or so later. The company was famous for its MMO, but also RTS and RPG titles, however you probably would have been laughed at if you suggested the company make a competitive shooter.

One thing that no one would have predicted back then, is that an Activision Blizzard earnings call would be lauding the successes of Blizzard's shooter over that of its parent company. But that's just what happened today.

OVERACHIEVER

Yes, while the latest Call of Duty was having a bad time, Overwatch was flying. Now Call of Duty still looks to be the bigger game by the typical metric, monthly active users (MAUs), but the fact we're comparing a 13-year old behemoth franchise to a new release is astounding anyway.

There's no metrics provided for individual games but Activision's titles had a total of 48m MAUs, a drop year-on-year which was attributed by Activision to the 'softness' of Infinity Warfare's launch. Blizzard's games though grew 58% to 41m MAUs, with Overwatch cited as being the key reason:

It was described in the earnings call as "Blizzard's fastest growing new IP ever," with executives Thomas Tippl stating that "In less than a year since launch, Overwatch has 30 million registered players and has become Activision's eighth $1 billion franchise."

It's impossible to know whether Activision Blizzard planned this, but placing Overwatch and Call of Duty side-by-side on its balance sheet, gives the company incredible firepower in the competitive shooter space - one that's becoming increasingly profitable thanks to the growth of eSports.

DOUBLE BARRELLED

Call of Duty remains the gold standard for eSports on console. Activision recently announced the Call of Duty World League (CWL) Championship. This is Call of Duty's biggest competitive event of the year, and will be held in August in Orlando with 32 teams from around the world competing for a prize pool of $1.5 million as part of the largest CWL season long prize pool to-date of $4 million.

The game has run into a few problems on YouTube of late, though, with streamers finding that the violent nature of the content runs afoul of Youtube's tougher regulations on advertising near possible extremist content. But that's merely a blip for what remains the go-to brand for console shooters

It does though highlight just how different the two shooters are, with Call of Duty tending towards the more physical and visceral end of the market  (though it's multiplayer segment is a long way from being truly gritty or gratuitous) with a lot of weapon fetishism thrown in for good measure; while Overwatch is cartoon-like and a far more acceptable proposition for many, with practically no weapons that are recognisably like real-world guns.

Between these two titles, Activision Blizzard could sew up the growing eSports market for console shooters, and the much wider competitive shooter market with it.

MOBILE NEXT

It's impossible to know how much steer the parent company had in Blizzard's new, more console friendly, and more competitive direction. But it's certainly looking to spread the same kind of magic to its mobile arm. With King set to release its own take on Call of Duty, though there's no date on that yet.

It remains to be seen whether Call of Duty on mobile retains either the 'shooter' or the 'competitive' parts of the franchise as we know it. It's an incredible opportunity for the company to create a new generation of Call of Duty players, who will then graduate onto the core console games; as well as monetising its current fan base while on the move of course.

Eric Hirshberg, CEO of Activision, said during the recent earnings call: "The goal is to take a brand that tens of millions of people know and love and reinterpret it in a way that is appealing to the mass mobile audience." While Riccardo Zacconi, CEO of King, said: "The target is to combine … King's [experience] of creating mobile games of broad appeal with the great experience ... in the shooter genre of Activision." Not a lot to go on there, but they did use the word 'shooter' which suggests something outside of the usual staples, unless it apes the large number of 'sniper' games on the market - but I'd expect more of King.

PINCER MOVEMENT

With two of the biggest competitive shooters, each with a very different take on the genre, Activision Blizzard looks to have console eSports sown up. It may be early days for Overwatch but with Blizzard's experience from Starcraft, it would be foolish to bet against it eventually blasting through to the top tier in its genre.

With King providing a steady stream of new players, what chance a King-Blizzard collaboration next? Activision has a bright future here, and all that despite the likely ongoing softening in sales of its key console franchise.

With thanks to www.SeekingAlpha.com for the transcript of the Activision earnings call.

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