Why lower video game sales don’t always mean a flop – The Verge

For years, there was a rhythm to the annual release of the world’s best-selling video game series. Publisher Activision would announce the latest Call of Duty with a trailer in the commercial break of a big sporting event, pad the following months with incremental reveals about flashy single-player stories and increasingly elaborate multiplayer modes, host a blowout launch party, and the next day, celebrate with a press release announcing the latest record-breaking sales figures.

Modern Warfare 2 sold 4.7 million copies in a single day back in 2009 — at the time, it was the most successful video game release to date. Then, a year later, Black Ops outdid it. Last holiday season, Call of Duty: Black Ops III earned $550 million in its first three days. It wasn’t the biggest game launch — that crown belongs to Grand Theft Auto V. But it bested every other entertainment launch in 2015. It also led Activision to trumpet its sales figures just days after release as proof the franchise could still outsell (on the short term) even the largest Hollywood blockbusters.

That wasn’t the case for Call of Duty in 2016.

The rhythm of the most recent COD iteration, Infinite Warfare, was off from the start. Its YouTube announcement trailer — showing futuristic space combat that felt alien to fans of the series’ gritty wartime aesthetic — became the most downvoted game trailer in YouTube’s history this past summer. You can blame a troll campaign in part for those votes, but the game’s steady march toward the future has resulted in mixed results in the past, both critically and financially, so there was reason to worry.

When the game came out on November 4th to lukewarm reviews, Activision kept its cards close to its chest. Now, a month later, the company is still only willing to say that Infinite Warfare has been the most successful console game of the year, and only when speaking to US physical retail sales. Other big holiday games, too, have been rumored to miss expectations. Ubisoft’s Watch Dogs 2 is said to have vastly underperformed in the UK, while industry watchers suspect Electronic Arts’ Titanfall 2 is being aggressively discounted for the holidays due to poor launch performance.

Watch Dogs 2
Ubisoft

We don’t know for sure how the games actually performed, and we won’t for quite some time. Unlike film openings, cable television premiers, or album releases, the success of game launches are carefully guarded secrets. Publishers often stake quarterly guidance and even long-term financial success on games that sometimes take years to craft. So when those games fall short post-release, it’s in those companies’ best interest to say nothing and try to course correct behind closed doors. There is no Nielsen or box office report or some other third-party entity to shed light on performance. And worse, the industry still lacks a holistic sales-measurement system that includes both physical and digital.

It’s a frustrating element of the games industry that’s more Silicon Valley than Hollywood. The method of pseudo-transparency is not unlike the behavior of tech giants like Apple that tout iPhone sales figures only when it’s conveniently positive, or Netflix and other streaming services that keep their viewership secret. But there are ways to read between the lines and suss out just how well or poorly a game performs, especially during the holidays. Everything from discounts to leaked retail metrics to the timing of press releases can create an imprecise, but valuable picture of how well sales are going.

For instance, when a company does not announce day-one sales figures — or cumulative sales for the first three days — it’s a telling sign. The largest and most successful games can make hundreds of millions of dollars in the first week alone, and publishers will announce this fact proudly. When they don’t, analysts sometimes speculate that expectations were too high, or something else is amiss. But it’s not exactly clear what went wrong. Sometimes, publishers wait for retail data that reflects a positive development, such as when Activision got its hand on numbers saying Infinite Warfare outsold its competitors. It then sends out a press release to say it was not only the best-selling game (for consoles at US retail) in November, but also the best-selling game of the year (for consoles at US retail), without providing clear sales figures.

Activision declined to comment on game sales more generally. A spokesperson did make mention of CEO Eric Hirshberg’s comments earlier this year explaining that a new entry in the Call of Duty franchise would likely underperform one with an established fanbase, like last year’s Black Ops III. Ubisoft, the publisher of Watch Dogs 2, declined to comment for this story as well. However, a company spokesperson told Eurogamer last month that the publisher is indeed witnessing a noticeable drop in sales for Watch Dogs 2 and a number of games from its competitors, at least in UK retail.

“It is true that first-day and first-week sales for a number of big games, including Watch Dogs 2 and titles from our competitors, are comparatively lower than previous versions in previous years,” the Ubisoft spokesperson said. “However, we expect both week-two and week-three sales to be above traditional sales patterns. There is a trend toward games, especially high-quality games, having stronger and longer ‘tails’ as favorable reviews and word of mouth spread.”

Titanfall 2
Electronic Arts

There is some truth to this sentiment. Electronic Arts this this fall released both the highly anticipated Battlefield 1 alongside a sequel to mech shooter Titanfall. The company told The Verge in an interview that the metrics for success have been drastically changing these last few years, making it more difficult to judge a launch with first-week numbers.

“I perceive launches to be important, and holidays are pretty critical,” says Laura Miele, EA’s head of global publishing who oversees physical and digital sales. But, she adds, the industry is changing fast. “The marketplace is very different than where it was several years ago.”

Miele says players now can enter through EA’s subscription service, EA Access, or by purchasing the game from Sony or Microsoft’s online marketplaces. There is of course a traditional disc, or for PC players there’s EA’s Origin platform. Each venue offers different discount opportunities, or ways to give the game away like with console bundles. EA declined to talk sales specifics, and the publisher has yet to announce hard performance figures for Battlefield 1 or Titanfall 2.

But by having more avenues to purchase a game, players are not as incentivized to preorder at GameStop anymore or make sure Amazon is delivering a boxed game on launch day. Worrying about a new release selling out, or waiting in line at midnight, feels more and more like a quaint relic of the pre-download era. This shift may hurt initial retail box sales, especially those provided by retail analyst firm NPD Group, which is the industry standard. Yet it also means the overall picture of a game’s success remains blurry for longer. With so many different avenues to purchase a game, and so many different ways to discount or bundle them with hardware, it’s more difficult than ever to get cold, hard data from a single source.

In the longer-term evolution of gaming as a business, this obfuscation of launch data may not matter all that much. Because games often now exist as both standalone stories and ever-evolving digital services, new titles have longer lives. These games are no longer offloaded by stores in need of shelf space, and then rarely played after the initial popularity surge. Instead, they’re packaged and repackaged endlessly, all in an effort to keep the software alive and provide easy entry points for new buyers. Once a player purchases a game, there are now more ways to extract money as they continue to play.

Microsoft Holds Its Xbox 2016 Briefing During Annual E3 Gaming ConferenceMicrosoft Holds Its Xbox 2016 Briefing During Annual E3 Gaming Conference

Photo by Kevork Djansezian/Getty Images

“We will sell 4 to 5 million units of [2013’s] Battlefield 4 this year, even as we developed our road into Battlefield 1,” Miele says. “I believe in the shooter space for EA. We’ve seen great success from keeping the communities engaged throughout the life of the game, treating it like a service and taking care of the players that love the franchise.” When asked why EA chooses not to release Battlefield games every year, as it does with sports games like FIFA and Madden, Miele says it “would feel like it would cut it [the game’s success] short” to replace one title for another every 12 months.

This logic could be why some publishers are more willing to work with retailers to discount new games, sometimes just weeks after release. Right now, with the holiday season mid-swing and a whole wave of new consoles just now being plugged in, you can purchase Infinite Warfare, Titanfall 2, and Watch Dogs 2 all for $40 or less for the PS4 on Amazon. The strategy there is simple. If you can’t make significant revenue selling a game at full retail price, then get players to buy in at a discount. That way, they may be more likely to purchase downloadable content or other add-ons down the line.

Consider Activision’s other shooter, Destiny. The game has retained a core base of players who consider the experience more in line with subscription-style titles like World of Warcraft than with Call of Duty. And while some games net $60 from players who then walk away, a majority of the players still engaged with Destiny have spent as much as $170 over the course of four expansions spanning three years. The new Hitman was episodic, meaning players could purchase it outright, and get benefits from purchasing early, or buy it in pieces and spend more money over time. Even the latest Final Fantasy — a franchise once known for its sprawling, standalone stories — will feature downloadable content next year.

The DLC trend is nothing new of course. But it does signal why game publishers are putting less stock in the success of a launch, and then devising ways to make up for a soft release after the fact. It’s worth noting that while full titles now regularly receive discounts, sometimes earlier than ever before, DLC is rarely if ever put up for sale. When bought piecemeal, these updates can sometimes collectively cost more than the original game itself.

So the live service component is effectively now the lifeblood of a modern game. “Players are playing games that they buy for longer,” Miele says. ”We know that [a launch] is just step one. They’re going to be living with these games for a while.” In other words, we may not know exactly how well a game’s launch goes today. But the qualifications for success are already shifting from how many copies are sold to how many players continue to login, and spend money, months to years after release.

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