Activision's shakeup at Infinity Ward
yesterday and its reorganization of the Call of Duty franchise
creates some near-term risks, analysts say, and although the possibility of long-term payoff is there, the brand's future may now see some uncertainty.
Lazard Capital's Colin Sebastian looks at the effect of the ouster of Infinity Ward heads Jason West and Vince Zampella: "Specifically, we believe that the executives may have been in discussions externally to leave Activision," he says.
"We see the departure as creating some uncertainty regarding the future of Activision's largest and most profitable console game, Call of Duty
," Sebastian continues. "However, the impact may not be felt until late 2011, which was the presumed launch timing of the next title developed by Infinity Ward."
Sebastian says there is "risk" inherent in the pair's exit in that they are likely to launch a new endeavor -- and that employees of Infinity Ward may leave to join them there, pressuring Activision's other Call of Duty
teams at Treyarch and now at newly-founded Sledgehammer.
"We note that West and Zampella were also part of the team behind EA's Medal of Honor
title, which declined in popularity after they joined Activision to create Call of Duty
," adds Sebastian.
But the publisher's pipeline is now plentiful with Call of Duty
games -- a new title in Fall 2010 from Treyarch, a version from Sledgehammer to follow in 2011 (one which Signal Hill's Todd Greenwald says will "likely not be a first-person shooter"), and two new Modern Warfare 2
map packs from Infinity Ward due this year.
"In addition, we continue to believe that Activision will launch an online subscription model for Call of Duty
as early as late 2010," says Sebastian -- an assessment with which Signal Hill's Greenwald concurs.
Says Greenwald: "Activision announced that it is in discussions to bring the CoD
franchise to Asia, working with partners (likely structured similar to its World of Warcraft
deal with NetEase -- a licensing deal, meaning low risk and high margins)."
With that in mind, analysts seem to think that 2011 could see as many as three Call of Duty
releases, at least one of which will rely on a brand new digital business model.