Can Zombies Resurrect Activision Blizzard Incs Call of Duty Franchise?

Source: Activision Blizzard.

Maybe zombies can achieve what Kevin Spacey couldn't. Call of Duty sales dipped with last year's Advanced Warfare despite a starring role for the Academy Award winning actor, a massive advertising budget, and strong critical reviews (gaming site IGN called the title "amazing").

Still, Activision Blizzard sold roughly 6% fewer copies of Advanced Warfare than 2013's Ghosts, convincing some on Wall Street that the 12-year-old Call of Duty brand is on its way out. "We continue to believe the franchise has peaked," a Cowen & Company analyst said in January.

Zombie modeActivision doesn't agree. It's still pouring resources into the brand in expectation of returning the franchise to growth. In fact, last week it announced a major upgrade to this year's Black Ops 3 edition: zombie mode.

Source: Activision Blizzard.

There have been undead play modes in past chapters, but this version significantly ups the ante. The game stars Jeff Goldblum and Heather Graham as voice actors and for the first time includes its own story line, complete with full character progression.

Called Shadows of Evil, the mode boasts "more gameplay and fun than any other experience before it, and has an appropriately twisted and deep narrative, performed by fantastic acting talent, that will keep our fans spinning," Activision said in a press release.

The franchise isn't deadManagement also rejects the idea that Advanced Warfare was a disappointment. After all, the title was the best-selling video game of 2014, booked higher digital revenue than its predecessor, and generated new excitement for the franchise thanks to innovations around player movement and multiplayer gameplay.

Source Activision Blizzard.

Instead of reflecting a gamer base that's tiring of Call of Duty, 2014's sales dip was all about the console transition, according to the company. "I don't think it's franchise oriented," Activision Publishing CEO Eric Hirsberg told investors in February. Last year "was the height of the console transition, so to compare it to years when Call of Duty was able to sell to a much larger and more stable installed base is not an apples-to-apples comparison."

Hirshberg isn't alone in that opinion. An analyst at investment firm Piper Jaffray said last week that the fear of "franchise fatigue" is overblown, and that Call of Duty should dominate sales charts again in 2015. To back up that claim he cited a survey that the firm just conducted of console gamers. The fans were asked which AAA title out of the dozens to be released this year they're most likely to buy. Call of Duty: Black Ops 3 was the clear winner of the survey.

First place in 2015?In contrast to last year's edition, Black Ops 3 doesn't have a clear path to No. 1 in 2015. The title has to face two strong competitors in the shooter category, both from rival publisher Electronic Arts. EA's Battlefield Hardline was released in March, and its new Star Wars: Battlefront game is expected to easily sell more than 10 million copies.

ButBlack Ops 3 has arguably the best chance at returning the Call of Duty franchise to growth. Its prior two iterations are the best-selling games in the brand's history with over 100 million players between them. Black Ops 3 will also get help this year from having a much larger installed base of next-gen consoles than Advanced Warfare did.

The company believes those points practically guarantee that Call of Duty at least ends its two-year sales slide: Management is calling for sales volume to equal last year's numbers. Activision calls that a "fairly conservative" assumption, though. Zombies will play their part by boosting excitement for the brand, pushing engagement levels higher, and driving those profitable downloadable content sales.

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Demitrios Kalogeropoulos owns shares of Activision Blizzard and Apple. The Motley Fool recommends Activision Blizzard and Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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