IndustryGamers - Informing the Games Industry

Activision May Offer Subscription for New Bungie Game, WoW, StarCraft II and All Call of Duty, says Pachter

Posted November 19, 2010 by James Brightman

Although Wedbush Morgan analyst Michael Pachter previously shared in a research note some of his thoughts on Activision's possible plan to monetize online gaming, today he provided IndustryGamers further detail on the structure of such a plan. It should be noted that Activision hasn't officially ever said that they will start a subscription plan, although Bobby Kotick has certainly hinted at it.

We asked Pachter if Activision would have lost out on sales and not broken the entertainment sales record if they had announced a subscription to coincide with Call of Duty: Black Ops. Pachter acknowledged that Activision probably would have been hurt by such a plan initially: "Activision apparently worried that announcing multiplayer subscriptions before the launch of Black Ops would hurt sales.  It's likely that around 60 - 70% of the people who buy Black Ops do so to play online multiplayer, and a greater number of the first week purchasers. Even if Activision retained fully free online multiplayer, the mere mention of a 'premium' subscription service will tick off some consumers, and there might have been a backlash at the precise time that they needed to set records.  They decided not to take that risk." 

While Pachter admits he has no insider info on a subscription plan and he could be wrong, he ultimately sees it happening in a tiered format, with the highest tier offering players online gaming access to all Activision titles, including the new Bungie game, World of Warcraft, Call of Duty and more.

Here's his full plan outline

As far as charging for multiplayer, I see it unfolding this way: 

I think everyone will be offered the same multiplayer options for free that they have now.  In addition, I see premium items offered as virtual goods for a modest fee--let's say $1.  There will be special weapons, armor, vehicles, etc. offered, and the quantity will keep growing, in the hopes that some meaningful percentage of gamers who play online multiplayer (I think it's around 14 million active users) pony up $1 or $2 per month on virtual goods. 

I think that the company will "tier" its offering by offering a $5 per month subscription to Black Ops that includes ALL virtual items for free, plus access to all map packs released as long as the player remains active.  There are probably going to be three $15 map packs, so that feature alone has a perceived $45 value, and I'm sure that there will be dozens of virtual items, so the $5 subscriber will perceive some value from subscribing.  In addition, the $5 subscriber may be offered exclusive tournaments, game play modes, ladders, achievements, and any other features that Activision can think up to induce them to pony up more money.

Next, I think Activision will offer a $10 subscription to ALL Call of Duty games.  Anyone paying $10 per month gets virtual items, ladders, tournaments, achievements, game play modes and map packs for CoD MW, CoD MW2, Black Ops and World at War, and as long as their subscription remains alive, they will get the next game and the one after that. There are a total of 7 map packs (I think) available now, and will be another 3 next year, so for $10 per month, a player will get all 10 map packs.  Not a bad value.

Next, I think Activision will offer a $15 monthly subscription that is an "all access pass", allowing subscribers to play WoW, StarCraft II (look for monetization there), the new Bungie game (when it comes out), all CoD games, and whatever they do with Guitar Hero (maybe free downloads of songs), on an unlimited basis.  WoW subscribers will love this, since they already pay $15 per month.  Of course, they'll have to buy copies of CoD in order to play, but this could spur growth on the PC online side of the game, and Activision would be able to keep all of the revenues, while they have to share with the console manufacturers for Xbox 360 and PS3 subscriptions.

The trick is managing this without destroying sales of the game.  They will tread very carefully, and will make sure that they let consumers know that they are NOT taking anything away, but are merely offering a LOT MORE VALUE for a little bit of money.

James Brightman has been covering the games industry since 2003 and has been an avid gamer ever since the days of Atari and Intellivision. He was previously the EIC of GameDaily Biz.