Analyst: Call of Duty Brand Losing Long Tail Effect at Retail

PiperJaffray analyst Michael Olson says that Call of Duty's "shortened tail" and a general lack of hits are the reasons for lower retail games sales recently. Olson says that the latest game in the series – Call of Duty Modern Warfare 3 – isn't maintaining the same long tail sales that 2010's Call of Duty: Black Ops enjoyed. He projects that the game will be the eighth largest selling game in March 2012, comparing it to Blacks Ops – which was the fifth best selling game in the same period a year ago.

"We believe big name titles are no longer able to sustain 'fat tails.'" says Olson. "This 'thinning tail' phenomenon is driven by 1) casual gamers leaving the market, 2) a steeper pre-sale and up-front curve, and 3) cannibalization from the pre-owned market."

Olson predicts that The NPD Group will report a significant drop in software revenues at U.S. retail on Thursday, when it releases retail sales data for March 2012. He also predicts that software revenues will fall by 26 percent year-over-year in March 2012 to $545 million. Wedbush's Michael Pachter expects a 23 percent drop, while Cowen and Co.'s Doug Creutz expects a 22 percent drop, and Sterne Agee's Arvind Bhatia expects a 25 – 30 percent drop.

Source: Gamasutra

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  1. 0
    Neeneko says:

    Interesting.  I knew of the basic pattern, but had heard that term applied to it before.  Heh, so we have one term for two very different things in retail… fantastic.

  2. 0
    MaskedPixelante says:

    Oh no, Activision will only make a billion dollars on these games at launch. Whatever will they do, besides charging 50 dollars a year for… whatever Elite is supposed to be?

  3. 0
    axiomatic says:

    Wow, no one is talking about the elephant in the room. OK I will. I would think most gamers realize that the real talent behind the Call of Duty franchise (West and Zampella) were forced out of Activision and this "short tail" is a direct result of Activision's questionable management of this whole situation.

    There is a reason some games are better than others. It's not the suits, its the developers that make the game good. No offense to Treyarch but we all know the Infinity Ward COD games were better than the Treyarch COD games and they were better due to West and Zampellas involvement.

    At the end of the day… I'm going to keep looking for what West and Zampella will come out with next, whoever the publisher is.

  4. 0
    Longjocks says:

    "cannibalization from the pre-owned market."

    Uh… you mean the same used game market that was around during the previous releases? Piper Jaffray, I'd like to apply for a job at your company. My qualifications include being able to throw around random BS statements without any real thought. I look forward to your reply.

    If the used game market affected this product more than before, I'd look harder at the actual product.

  5. 0
    Papa Midnight says:

    "…1) casual gamers leaving the market…"

    Fair enough, but I'd argue that a vast majority of those gamers weren't even in the market in the first place. Such an example would be the millions (AND MILLIONS) of copies of Angry Birds served.

    "…2) a steeper pre-sale and up-front curve…"

    You'll get no argument from me on this point, plus the fact that by the time the game has had it's market run, it's come to cost the end-user upwards of $120 (plus applicable sales tax) for the game (in the case of Call of Duty with all it's post-release $15 map packs)

    "…and 3) cannibalization from the pre-owned market."

    Used game sales? Really? So it has nothing to do with Call of Duty becoming the Madden of the First-Person-Shooter title branch of the videogame industry? (Just like they did with Guitar Hero which was pushing upwards of 2-3 games per year before they killed it)

  6. 0
    lomdr says:

    I think the Hero Cluster of 09 spelled doom for the Music Hero series.  It's a shame that it took DJ Hero with that, as it had some promise behind it

  7. 0
    lomdr says:

    The article was going so well, until it brought up Used games.  It's also in the source, so GP is not to blame for including that quote.  I lost interest in COD, and BlOps' multiplayer is just too similar to WAW to me during BlOps' free to play MP weekend.

  8. 0
    E. Zachary Knight says:

    The term "long tail" is used to describe the phenomena of a game's sales history in which there is an initial large spike in sales followed by an extended period of relatively low yet stable level of sales.

    What is actually being describe here is the level of the sales trend rather than the length. That is why the terms "fat tail" and "thinning tail" are used. They describe the average sales during the long tail. 

    E. Zachary Knight
    Divine Knight Gaming
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  9. 0
    Neeneko says:

    This seems like a rather odd use of 'long tail'.  I am more familiar with it in terms of describing niche markets rather then decreasing sales of a major mainstream franchise.

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