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Analysis: What Long-Term Impact Could COD: Elite bring?
by Chris Morris [Console/PC, Business]
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May 31, 2011
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So now it's official. The long-awaited (and, in some cases, long-feared) subscription service for Call of Duty is a reality. And while players pore through the previews and press release to determine exactly what Elite entails, I'm finding it a lot more interesting to look further down the road.
Make no mistake, Elite is a bold move by Activision – and one that could ultimately change the way the industry operates when it comes to user communities and digital add-ons.
There have been plenty of kneejerk complaints about the service's subscription format. That's something that goes with anything that affects people's wallets, but it's hard to argue with the concern this time.
Players are shelling out $60 for the game (one that doesn't follow the industry's normal arc of price erosion, by the way), then will likely pay between $5-$8 per month for Elite access (though it's worth noting that those amounts are speculative for now). And given the game's player base is heavily skewed towards the Xbox 360, that's another $60 per year for Xbox Live fees. All of a sudden, one game is costing you between $180 and $216 per year.
Obviously, there are some caveats in that math. Few people subscribe to Xbox Live strictly for Call of Duty, but you get the point.
For the player, that means that Elite has to have some truly worthwhile content. But Activision isn't trying to lure every Call of Duty owner into Elite from the start. It's smart – and knows how to appeal to the core audience.
Right now, to buy all three map packs that come out with a Call of Duty game, players shell out $45. Let's assume, for argument's sake, that Activision opts for a $5 per month subscription fee. For an extra $15 (one year's worth of monthly fees), COD Elite players will now get the included map packs and a host of additional services, including in-depth tracking of player statistics and an advanced matchmaking service. That's not a particularly bitter pill for people to swallow.
And ultimately, people are going to go where their friends go, which will help build the numbers.
While he's something of a lightning rod among gamers, it's worth noting that Wedbush Securities analyst Michael Pachter was the first to forecast this service last year. And while he says he's still sussing out the particulars, he doesn't expect Activision to shove Elite down players' throats out of the gate.
"I think Activision hopes to get up to 1 million subscribers this year," says Pachter. "From there, they hope to get it up to 3 million next year, then up to 5 million. Over time, they'd like to migrate everyone over to it."
One million subscribers isn't exactly pocket change, but with a player base of 7 million users, it's achievable – and it's something that would be more than a blip on the company's earnings.
"I think they're in this for the long run," he says. "For their next [fiscal] year, 1 million subscribers [to Elite] is about an added 3 cents per share. It's meaningful, but who knows ultimately if they'll end up with 1 million or 10 million."
If those numbers do start to increase, look for the company to expand the Elite model to other notable franchises. And the most obvious places to do so are StarCraft and Bungie's upcoming title.
Bungie and Blizzard, of course, already offer services similar to Elite for free. While there's no way (and, really, no point) for Bungie to add a subscription service onto Halo at this point, you can bet the potential monetization of the online components of its next game played into its discussions with Activision before the two companies signed a long-term partnership.
And with two more StarCraft games in the works, Blizzard could always add additional features to a subscription package. It would be astonishing, in fact, if early conversations about that haven't already occurred.
Looking even further down the road, if Activision's earnings climb steadily due to Elite, other publishers are going to have to follow suit. Their investors will demand it, sensing money being left on the table.
What does that mean long-term for players? Well that's the big mystery. Do subscription services like Elite risk splintering the gaming community? Possibly. Or, potentially, they help separate core players from the casual – which could cut down on griefing and make the experience more fun for both player sets.
Like I said, Elite is a bold move for Activision, and one that could set the course of how major franchises interact with their audience in the years to come.
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However, a shooter, with non-persistent multiplayer matches, has no real purpose on needing monthly fees other than "monetization". If the content offered to players via subscription actually need a server, or some form of online keeping (other than stats), then it makes sense, otherwise it would be better (gamers side) to offer content as DLCs or expansion packs.
I'm skeptical at the move, but then there's always indie games to fall to (which are made (in theory) by gamers, for gamers).
LOL world of warcraft can already be played on pirated servers, only idiots pay for MMO's because they are stupid and illiterate.
Guild wars on the other hand, has it's cost reduced by the fact that the world isn't semi persistant. Everything outside of the towns is handled by instances.
Weird considering Guild Wars 2 is supposed to be more persistant than that. And no fees. Microtransactions, yes. But no monthly fees.
CoD is successful because it's what the cool kids are playing online, much in the same way that the first Halo was THE split screen multiplayer game, and going even further back, it was Goldeneye, or Super Smash Bros.
These types of games rope in people who otherwise wouldn't bother playing it because it's what their friends are doing, and they don't carry the social stigma of playing a game like WoW. So if a couple of alpha males in every group can be made to believe that this Elite package is something they need, everyone else around them will soon feel that way too.
But I suppose that Elite is geared more towards the CoD fanboy types who already know that they will be playing nothing but Modern Warfare 3 for months after it comes out. And have played all the other Modern Warfare games up until this point.
So then what is the long-term impact? Well, perhaps the industry will start offering monthly subscription services for an entire franchise; where you pay monthly fees to get new content each month from that particular franchise. I suppose the games themselves will still be individual purchases, but I could see a future where the games themselves are included as a part of the service itself. I guess what this really has implications for is how franchises will be able support themselves into the future. Many games are kind of shipped out and then abandoned; bugs and balance issues are never fixed. I guess this could help support the software maintenance lifecycle. I think this kind of a system is certainly more profitable than a DLC-based system anyway.
And a regular pricing model could be offered to those who don't want to make a commitment to a particular franchise.
But also, depending on what kind of advantages are offered to those buy into the Elite service, it also has the potential to segment the player base.
"Right now, to buy all three map packs that come out with a Call of Duty game, players shell out $45. Let's assume, for argument's sake, that Activision opts for a $5 per month subscription fee. For an extra $15 (one year's worth of monthly fees), COD Elite players will now get the included map packs and a host of additional services, including in-depth tracking of player statistics and an advanced matchmaking service. That's not a particularly bitter pill for people to swallow."
It should say "For an extra $60 (one year's worth of monthly fees)..."
So going with that logic, the story here is that Activision is rolling a few additional features onto the yearly map pack releases, adding $15 to the yearly cost, and making it a service. Not hard to imagine this taking off.
I'm not keen on the idea of losing access to content. It's not the same as DLC at all. Simply putting the dollar values beside each other is apples and oranges. The fact is that if you stop paying them you lose access to features that have no business being part of a subscription package.
The only possible way I would do this is if they brought dedicated servers, kept the same game for a few years instead of a yearly basis, dropped the $60 price tag, and-
Oh wait, none of that is going to happen now is it? Did I add "Hell freezing over", "Pigs flying", and "Unicorns and narwhals teaming up to bring us chocolate rivers"?
In all seriousness, it will be interesting to see how this works. I'm not going to jump on, but to each their own.
After all, why would anyone need to pay extra for advanced matchmaking and stat tracking if they just played on a few favourite servers that already tracked in depth stats at no charge to the player?
I read that as "and that piece of crap IWNet".
No thanks.
The advanced statistics would only be interesting to the die hard, live in their mothers basement, type of players that probably make up less than 1% of the total COD player groups. So for the rest of us (I really enjoy COD - but I'm tiring of BLOPS atm - and the DLC for BLOPs doesn't appear to have taken off) we'd be paying extra for what we can already get. I can't see this working - but then COD is an addiction and there's more than enough stupid people on the planet to make this worthwhile for Activision.
This could enrage some,excite others and open a Pandora's box where every worth wile game from kz3,halo,uncharted or lbp want in on this action making everything a mini mmo.
Also i much prefer a full year @ 20% or more off the monthly price. I'm a hardcore gamer but even though i enjoy games like COD,HALO,GEARS,KZ3 i even more than that enjoy team ICO'S original games,3D dot game hero's,brutal legends,disgaea,valkyria chronicles,super robot taisen og etc.
Fancy graphics and new worlds to blow everyone away in is fun but originality in concept and design+humor get much more respect from me. If more people had broader game tastes games like physconaughts,bg and e or brutal legends wouldn't have tanked at retail
Beware elite as the more easily they herd the sheep the quicker they get shaved/paid and then the me to i want my money syndrome starts...could even be the beginning of the end for single player as everything goes massive.
And every other big company out there has added these services already and none is letting users pay for it.
I like the CoD series but I think this year Battlefield 3 will be my main arena for shooting 12 year old american kids in the face. Unless this works out to be cheaper than just buying map packs (highly unlikely) then I don't see many people going for it.
I just hope they don't introduce some "premium" perks and weapons that inevitably end up being twice as good as anything else...