Modern Warfare 2 DLC Expected to be a Rainmaker
Even before its release, Call of Duty: Modern Warfare 2 was expected to break sales records which proved to be true after it hit store shelves. And while it continues to set records as year 2009 comes to a close, analysts are predicting that the fun has only just begun for Activision. In 2010, Infinity Ward’s groundbreaking first-person shooter is expected to earn big.
According to analyst Ben Schachter from Broadpoint AmTech, next year just downloadable content alone should net Activision around $140 million. His estimations were derived from the success and DLC sales rations of last year’s Call of Duty: World at War.
“ATVI [Activision] sold ~.625 map packs per unit of World at War, or $6.25 in Map Pack/DLC per installed game unit. Using this ratio as a benchmark and assuming Modern Warfare 2 unit sell-through of approximately 14mil-16mil at the time of the map pack releases, we estimate that Modern Warfare 2 DLC could generate approximately $100mil-$140mil in gross revenue, $59mil-$85mil in EBIT, and $0.03-$0.05 in net profits per share.”
The analyst also predicts that profits could soar above this expectation if Activision decides to monetize a little more on their downloadable content by raising some prices.
“Though the company has not announced anything, we would not be surprised to see the content expand significantly beyond simple map packs to include new missions, modes of play, and in-game items (who wouldn’t pay for a night-time desert assault mission, a 2×2 capture the flag mode, or a very, very sharp bowie knife?) The point is that Call of Duty‘s fan base will pay for additional content, and we expect ATVI’s Infinity Ward to monetize that throughout 2010.”
It is unlikely that Activision will stray from the norm when it comes to pricing the DLC packs by Infinity Ward but with the popularity of Modern Warfare 2 in comparison to last year’s World at War, we believe DLC for the shooter could potentially exceed this estimation—provided that interest does not fade away for the shooter. Do you plan on expanding the horizons of Modern Warfare 2 with extra content?