Market cannibalization is the culprit for this Call of Duty title shutting down

This story about cannibalization, boiled down, in 1:46 minutes.

What’s the fuss?

Despite being a success, China’s Call of Duty Online will shut down later this year. Its existing players will be funneled to another free-to-play Call of Duty title in recompense, signaling shifting prioritization towards amalgamating their existing audiences.

The situation

If you live outside of China, chances are you’ve never played 2015’s Call of Duty Online.

  • The China-exclusive is a free-to-play game that incorporates microtransactions as its main method of monetization.
  • However, similarly to a fully-priced Call of Duty game, it features numerous modes such as a single-player campaign, multiplayer matches, and a zombie-survival gametype with a robotic twist.

On August 31st, Call of Duty Online will be no more due to declining revenue and a lack of license renewal from the developer.

  • As a result, existing players of the game will lose all their progress and account data.
  • Affected Chinese Call of Duty fans are being incentivized towards transitioning to the franchise’s newer phone game, Call of Duty: Mobile, by awarding them in-game items as replacement for unspent virtual currency — but it may not be enough.

Boiling it down

Call of Duty: Mobile has been a resounding success for its developer Activision, in China specifically.

  • Before it was released in December 2020, 46 million Chinese gamers pre-registered for the game, and it raked in $14 million in its first week of release alone.
  • Having said that, it’s likely that the mobile hit took players (and thus revenue) away from the older Call of Duty Online — a classic case of market cannibalization.
  • Activision would effectively scale their business by cutting the entire operational cost of the older title while banking on incremental revenue from transitioned fans.

China is the biggest market for free-to-play games due largely in part to their gaming habits.

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Originally published at https://www.boilitdownnews.com.

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