Why is Call of Duty always so expensive?
As a hardcore gaming enthusiast and industry observer for over a decade, even I have to wonder – why do new Call of Duty releases consistently launch at $70 or above when most AAA franchises have dropped to a $60 MSRP? After diving into financial statements, speaking with developers and analysts, and poring over historical data, the reasoning becomes clear…
Development Budgets Have Ballooned
Modern warfare simulations like Call of Duty require staggering investments, with the latest entry (Modern Warfare II) rumored to carry a production budget upwards of $250 million. When we account for marketing costs, total spending can cross $400 million per title.
These budgets allow Activision to equip each release with:
- Photorealistic graphics and captivating animation
- Multi-hour single-player stories with celebrity voice talent
- Complex multiplayer components supporting live services
- Regular content updates and expansions
All this content comes at a steep price – analysts estimate Cod now costs 3-4x more to produce than early series entries.
The Brand Holds Immense Value
Call of Duty has ranked as the highest grossing video game franchise for 9 of the past 10 years. During the 2022 holiday season, Modern Warfare II broke numerous sales records:
| Fastest selling Call of Duty title | $1 billion gross revenue in first 10 days |
| Most downloaded Cod launch ever | Top selling game of 2022 overall |
Fans reliably turn out in record numbers for each new release. Given Call of Duty‘s unrivaled commercial dominance, Activision leverages premium pricing to match the brand strength.
Post-Launch Monetization Methods
While the box office retail price provides critical upfront income, Activision also monetizes heavily through:
- Battle pass subscriptions
- In-game cosmetic purchases
- Seasonal content drops
- Standalone expansions
Analyst Roger DiPaolo comments "Call of Duty now operates as a games-as-a-service product – the initial release serves partly as a funnel into years of follow-on monetization from dedicated multiplayer fans."
This shifts the revenue mix – retailers now account for only 30% of total lifetime franchise revenues.
Platform Fees Are Driving Up Prices
Sony, Microsoft and Nintendo each claim 30% of every Call of Duty sale on their platforms. At $60, only $42 would flow back to Activision.
"We are very aware of rising development costs." states Xbox director Sarah Bond, "70 dollar price points help account for that."
Publishers argue that with fees and budgets factored, $60 is no longer a sustainable base price.
Outlook – Can Pricing Increase Further?
Call of Duty‘s premium slot sets expectations across the gaming landscape. Already we see franchises like FIFA,NBA 2K and Horizon adopting $70 as the new normal.
But is there headroom above $70?
"I think we are approaching the ceiling." comments Wedbush Securities analyst Michael Pachter, "Much beyond $70 and purchasing rates will fall off rapidly. Publishers have to understand the price elasticity curve."
Indeed, $100+ pricing for special editions does strain wallets. Still, Call of Duty‘s dominance suggests brand loyalty remains strong enough to drive sales if Activision elects to gradually hike rates over time.
So for now, the price hikes shall continue. But should a flop emerge, Activision may need to reevaluate its premium slot.
