Downloads set records for Activision
While most videogame publishers are taking advantage of digital downloads to extend their profits these days, none are doing so as successfully as Activision.The company on Monday announced that life-to-date sales for downloadable expansions to its “Call of Duty” games have surpassed 20 million units. That’s between $200 million and $300 million in revenue Activision might not have seen five years ago. The rise of online services on Microsoft’s Xbox 360 and Sony’s PlayStation 3 have created a cottage industry that’s becoming increasingly important to publisher’s bottom lines. The “Call of Duty” franchise is the biggest in the gaming industry. Last year’s “Call of Duty: Modern Warfare 2” set a Guinness World Record as the most successful entertainment launch of all time, taking in $401 million in its first 24 hours. The company has since released two map packs for the game at $15 each. The first of those expansions sold 2.5 million copies — racking up sales of nearly $37.5 million — on the Xbox 360 within 24 hours. Previous expansions for “Call of Duty” games set earlier records. From a dollar perspective, the revenue generated from those digital downloads is the equivalent of retail sales of between 3.3 million-5 million copies of a game. (Generally, a videogame that sells more than 1 million copies is considered a big enough hit to warrant a sequel.) But the margin on map packs is significantly higher, since they can be created in shorter time periods, often using existing assets. Additionally, since there’s no retailer involved in the sale, publishers only have to share income with Microsoft or Sony. (Make no mistake, though, Activision is not happy about the cut those companies take, either.) Expansion packs are nothing new in gaming. Publishers have long sought to double down after a successful release. But the rise of multiplayer gaming — in which players compete or play cooperatively online — has made the expansions more popular than ever. Activision has not announced if it plans to release any additional map packs for “Modern Warfare 2,” but the next installment in the “Call of Duty” franchise will go on sale in November. It’s a safe bet the company is already putting plans together to boost post-launch sales with additional downloadable content.