Money Matters - Simplified

‘Call of Duty’ aimed at Chinese market by Activision

When consumers in the U.S line up to pay $60 for each year’s installment of Activision Blizzard Inc.’s biggest franchise, “Call of Duty”, people in China will get it for free.

The Santa Monica, Calif.-based, company is responding to the peculiarities of the fast-growing Chinese market, where game consoles barely have a presence and people typically play videogames in PC-laden Internet cafes, often in free games that.
The move is a risky one, analysts say, because Chinese consumers are so different from those in the western world. But the market is large and growing, representing an important opportunity.
“No one’s done it really well yet,” said Michael Pachter, analyst at Wedbush Securities. He said many Chinese gamers have grown accustomed to buying virtual goods in lower-quality games. So, it’s possible they might be willing to pay even more in a game with higher production values.
In addition, he said, war-simulation shooting games have become popular there, creating an inroad for the “Call of Duty” games. “It’s a good experiment and a worthy one.”
Activision will try to make money on its free “Call of Duty” by selling items to help users play the game, such as enhancements for their weapons or extra gear.
“The version is completely new, with a different design and storyline that took two years to produce. Activision created the game at a studio in China to ensure it would appeal to gamers’ tastes there,” said Bobby Kotick, Activision’s chief executive.
“The game is incredible,” he said. “How you play, what you play, customization of weapons, the types of characters, the equipment you use, the game modes, and the maps are all unique to the Chinese market.”
The game is being fine-tuned for the PCs gamers use in China’s Internet cafes, the company said. Activision invested about the same amount of money producing “Call of Duty” for China as it does for one of the installments in the U.S., Mr. Kotick said. Analysts estimate the games cost at least $50 million to produce each year.