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Analysis: What Long-Term Impact Could  COD: Elite  bring?
Analysis: What Long-Term Impact Could COD: Elite bring?
May 31, 2011 | By Chris Morris




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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