Wednesday, November 10, 2010

Black Ops to Make History

While there has been ample speculation from wall street analysts and gaming industry pundits regarding the level of success Activision’s Call of Duty: Black Ops may realize, we felt compelled to make our own bold predictions based upon your twitter chatter.

However, instead of playing it safe by saying “could be more than 11 million”, or “could exceed 18 million, but not match MW2”, or “estimating 7 million sold on day one”, we figured we would provide some rationale to our predictions and provide our thoughts on dollars and profits.

After all, what good is a wall street analyst if they can’t provide the latter two elements.

So, what we found is some pretty cool correlation between the amount of chatter over very specific time periods, the number of unique twitter ID’s, positive versus negative sentiment within the chatter, and sales.  What?

In digging through a bunch of historical twitter chatter corresponding to previously released titles, with which we can find published sales data, we were able to construct some models that held up pretty well to our testing.

This is our final answer...

Day One Sales:   

5.9 - 6.1 million units (US & UK), 6.6 - 6.8 Worldwide,
Generating more than $350 million.
First Week Sales:    

9.1 - 9.4 million units worldwide, 
generating more than $540 million
Thru EOY 2010:    

We will publish our best estimate around 11/18 

We also anticipate above normal margins being realized from these sales due to the number and mix of platforms supported, a suspected reduced/deferred royalty expense due to ongoing legal matters (could be a wash depending on reserves amount), and significant benefits from various partnerships.

Now, could the lofty 7 million units on day one that someone projected come true? Sure, depending on what and when you are counting.  But, we believe that Activision will probably be rather conservative in their accounting and we base our estimates on the first 24 hours of sales (eg. through midnight ET on 11/10/10) for the Xbox, PS3, PC, and Wii. We actually suspect that the 7 million figure was met around 7pm ET on 11/12/10.

And, just to provide you with some pretty pictures, you can get a sense how your collective launch chatter reflects the relative success of video games. Granted, finding a useful visual representation of our data set always seems to be the biggest challenge!

In addition, we thought we would share with you how many of your voices were heard. Can you say, wow!  While these numbers are very impressive, didn’t it seem like the whole world was talking about Black Ops?

Until next time, game on!

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