‘Call of Duty Online’ Invades China as Activision Franchise Looks to Conquer Major New Market

Activision is ready to find out whether its $10 billion 'Call of Duty' franchise can succeed as a free-to-play game

Call of Duty Online launches in China

Already one of the videogame industry’s biggest franchises, “Call of Duty” is about to prove whether it can conquer the world’s largest gaming market, China.

After years of development and beta testing, Activision Publishing, a division of Activision Blizzard, has officially launched “Call of Duty Online” as a version of the military actioner designed exclusively for Chinese gamers.

How “Call of Duty” performs in China — especially in its new form as a free-to-play game — could have major implications for other gaming franchises that have long been unavailable in the region, at least legally.

Chinese Internet giant Tencent helped Activision launch “Call of Duty Online” and was instrumental in coming up with a version that met government regulations. That included meeting cultural standards, as well as regulations governing how the game gets into the hands of Chinese consumers through digital platforms.

The Chinese government has only recently started loosening up regulations over the videogame industry, with console makers like Sony, Microsoft and Nintendo now able to start selling their PlayStations, Xboxes and Wii Us in the country.

Until now, companies like Santa Monica, Calif.-based Activision have had to focus on getting their games into Chinese Internet cafes. But over the past year, high-speed broadband has become more readily available at home, opening the door for an online version of “Call of Duty” to break out.

If it does, it could provide a major windfall to Activision Publishing and Tencent, given just how big the potential gaming audience is in China.

In Tencent, Activision has a well-respected partner through which it can promote the game but also collect the revenue that will be generated through in-game purchases — one major difference from “Call of Duty’s” console-based version in the rest of the world.

Some of the changes are tonal, while some are cultural, including the level of violence on display, said Activision Publishing president and CEO Eric Hirshberg. “The main one is the way the game plays because it’s free-to-play. It’s unfolding piece by piece and as more content becomes available.”

“The biggest thing is we’re taking a game that many people compare to an interactive movie and making sure we keep that scope” through the free-to-play model, Hirshberg said.

Another difference: a popular mode in which gamers fight off zombie soldiers has now been turned into one that features cyborgs because of the country’s view of the undead.

“There are some cultural sensitivities that we had to be mindful of,” Hirshberg said. “Our partners at Tencent were great guides in that capacity.”

Last year’s release of “Call of Duty: Advanced Warfare” pushed the franchise past the $10 billion mark in lifetime revenue, Activision has said. The game also became “the biggest entertainment launch of 2014,” in terms of revenue, according to company chief Bobby Kotick.

Still the launch of “Call of Duty Online” comes as Activision’s top franchise is seeing signs of a decline.

Launch sales of “Advanced Warfare” were off 27% in November compared to 2013’s “Call of Duty: Ghosts,” according to the NPD Group, marking the third year that the series has seen declines. “Advanced Warfare’s” first-month sales were off 49% compared to 2011’s “Call of Duty: Modern Warfare 3.”

Making the franchise available to hundreds of millions of Chinese gamers could now make up for any of that lost revenue. And in a short time.

Developed by Raven Software, “Call of Duty Online” essentially borrows from “Call of Duty: Modern Warfare” and “Call of Duty: Black Ops.” Like other free-to-play games, gamers will be able to upgrade their characters with new weapons and add new levels depending on just how much money they want to invest.

The strategy has proved a major draw for mobile gamers, turning titles like “World of Tanks,” “League of Legends,” and the more casual “Candy Crush” into megahits.

The Chinese version of “Call of Duty” will offer single player campaign missions, cooperative experiences and multiplayer modes.

Tencent, founded in 1998, has quickly grown into China’s largest Internet service portal. It started trading publicly in 2004, on the Hong Kong Stock Exchange. The company’s leading Internet platforms include QQ, WeChat, SoSo, PaiPai and Tenpay.

With “Call of Duty Online” in development for three years, Activision built a studio from the ground up in Shanghai. Activision and Tencent started offering a beta version of “Call of Duty Online” last June, and closed versions before then.

When it was being developed, most of the online traffic was happening in Internet cafes. Around 70% of that is now happening in the home, with most gamers playing on a PC, not a console.

Activision, which is known for its big-budget marketing campaigns for its game launches, isn’t veering away from the high-profile promotion in China.

The company recently rolled out a live-action short in which Chris Evans blasts away enemy troops in full soldier mode in sequences that look like they come straight out of a Hollywood action movie.

That kind of campaign “is unheard of in how games are launched in that market,” Hirshberg said. “Tencent felt strongly that the way ‘Call of Duty’ is marketed in the West is as important in how the game is made. Treating a game like blockbuster pieces of entertainment is something that is new for the market and something (Tencent) wanted to embrace.”

The video featuring Evans, however, will be shown only online in China, with the rest of “Call of Duty’s” campaign also unfolding mostly through Tencent’s social-media channels.

Now, it’s all about whether China will find “Call of Duty” as compelling as Western audiences.

“We wanted to take the time to get it right, and deliver something really special for that market,” Hirshberg said. “We didn’t want to take the Western game and just translate it.”