Activision is gearing up for the major release of the holiday season with Treyarch’s Call of Duty: Black Ops.
As the hype machine continues to churn, gamers are itching for a chance to get their hands on the latest offering. Activision’s latest guidance on financials shows that the company is expecting around 20% less on sales from last year’s Modern Warfare 2, according to Cowen & Company analyst Doug Creutz.
Creutz suggests that Activision is being modest with its estimates on the game. “This includes an assumption that the upcoming Call of Duty: Black Ops comps negatively against last year’s Call of Duty: Modern Warfare 2, despite the fact that on several pre-release metrics cited by management Black Ops is tracking ahead of Modern Warfare 2,” Creutz told investors.
“We think management’s guidance implies Black Ops units down roughly 20 per cent versus Modern Warfare 2,” said Creutz.
He added that “our non-GAAP estimate assumes Black Ops is down 10 per cent versus Modern Warfare 2, so we think management is taking a more conservative stance for guidance purposes.”
Estimates on sales have been varied from industry analysts, but all seem to agree that Activision will be in a fine position at the end of the fiscal year. While several analysts have stated they do not see Black Ops performing to Modern Warfare 2’s level, Wedbush Securities analyst Michael Pachter believes the game will strain in sales due to competition, low review scores and slower sales on boxed physical retail.
“We were somewhat relieved that the company quite clearly stated that it did not model Call of Duty: Black Ops to sell more units than last year’s blockbuster title, Call of Duty Modern Warfare 2,” he wrote.
“Press reports saying that the company expected the ‘biggest launch ever’ were consistently misconstrued, and the company was widely credited with claiming that this year’s version of the game would outsell last year’s. While it is conceivable that the new version could outsell the last one, we think such a result is unlikely, due to significantly steeper competition, likely overall industry sales declines, and the likelihood that Black Ops will receive a lower Metacritic score than its predecessor. This year’s game faces competition from holiday sales of Medal of honour and Halo: Reach, both quite competitive in the shooter genre.”
He added: “Notwithstanding our concerns about the likely Metacritic score for Black Ops, we fully expect the game to sell in line or above our estimate of 13 million units, or three million below Modern Warfare 2.”
Black Ops is set for release tomorrow, with many stores opting for midnight releases. Several retailers are offering significant discounts for trade-ins of Fallout: New Vegas and Medal of honour.