On September 9th, Activision Blizzard (NASDAQ: ATVI) will have one of the biggest days of the company's history as the highly touted, highly reviewed, much ballyhooed Destiny franchise will go on sale. Promoted as the company's next billion dollar franchise behind Call of Duty, the game got off to a successful beta test earlier this year, and pre-orders have been filling up stores and hard-drives ever since. Yet nobody seems to know for sure how well this game will actually do until the lines start forming at midnight at retailers.
Big costs can mean big profits
According to VentureBeat, roughly 10-15 million copies have already been sold, and this isn't including the digital copies available for pre-sale by Microsoft through the Xbox marketplace. This marks a very successful start to a franchise with a $500 million price tag projected already. An analysis by industry expert Doug Creutz, using algorithms to compare pre-sales to post-sales, states that the game could make $600-900 million in sales in the first four months, making the game instantly profitable. To make it even more lucrative, customers who bought the digital download from Microsoft (NASDAQ: MSFT) won't even need to get in line to buy the game like hard-copy customers did, making the game increasingly attractive for a modern video game marketplace.
Destiny's holiday market dominance
It is well known that Destiny is the centerpiece of both Activision's second half of 2014 and the video game industry as a whole, but the scale of the game's market dominance may only just be unfolding. As an open world shooter, it's entering a competitive field alongside Activision's Call of Duty: Advanced Warfare and Electronic Arts' (NASDAQ: EA) Battlefield Hardline. However, Destiny's projected sales figures suggest that it could eclipse not only its sister franchise, but also drown out competitors. Already, pre-sales of Battlefield are off to a franchise-worst start, despite being an immensely popular title.
Advanced Warfare may fare better because of the wide following the franchise has enjoyed over the last date, more so than Battlefield, but with a November release, it concedes the preceding two months to Destiny, and won't have that same new video game smell that Destiny has. This would suggest that Activision could hurt itself by releasing two anticipated games so close together and that sales for one would hurt the sales for the other. The upside though is that, if Destiny reaches that $900 million sales target, it would bring the company more money than it would potentially lose if Advanced Warfare somehow missed the mark (unlikely given its praise from both Gamescom and E3 this summer). Plus, Call of Duty's loyal fan base may not be the same as the potential one for Destiny, given that one is a traditional shooter and the other is expanding the reaches of open world combat. Either way, EA may be the big loser when all is said and done given its initial weakness with Battlefield and the gathering storm that is Activision.
Destiny calls, will you answer?
This is one of the last moments we will have to analyze Destiny before the game hits the shelves, but so far, it appears to be meeting the hype. Usually, predicting a billion dollar franchise before the first game is released can come off as haughty or pretentious, but Destiny may meet those expectations sooner than most people envisioned. Assuming no hiccups with initial gameplay or the multiplayer networks (which will be full of players sooner than previous franchises enjoyed thanks to digital purchasing), this game could be not only the game of the year, but also the game of the decade.
Seems only fitting that it's the makers of Call of Duty and the studio that made Halo who are the same ones that will wow us again.
Disclosure: The author is long ATVI.
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