Call of Duty kicks off cautious holiday season

With the launch of Call of Duty: Modern Warfare 2 on Tuesday, the annual battle for consumers' holiday video game dollars is officially on.

Game retailers across Canada opened their doors in the early hours ofthe morning to accommodate the hordes clamouring for Activision's latest first-person shooter, a title that is sure to be the year's best-selling release and quite possibly the biggest game ever.

The Call of Duty franchise, now in its fifth iteration on home consoles, has enshrined itself among hard-core gamers as a perennial must-have with its immersiveness, cutting-edge graphics, gritty war-themed action and deep online gameplay.

But Modern Warfare 2 is only one combatant in the all-important holiday battle, a time of year where game makers rake in close to two-thirds of their annual revenue. This year, that huge pot will near $60 billion US worldwide, according to market analysts DFC Intelligence. With nearly $40 billion at stake, the Christmas season is akin to the summer months for Hollywood it's blockbuster time.

This year, though, thingsarea little different. So far, 2009 has been a disappointing year for video game makers. An industry once thought to be recession-proof has finally taken a hit. That's causing game makers to rethink the idea of putting all their eggs in one holiday basket and instead spreading out the release of their games over a longer period.

"You'll see that more this year than any," says Jeff Rivait, games and accessories product manager for Xbox Canada. "There have been learnings in the past couple of years."

In previous years, even when consumers were looser with their money, there were always a number of games that didn't sell as well as they could have during the holiday season simply because there was too much competition. In 2008, well-reviewed games that were part of normally hot franchises such as Prince of Persia and Tomb Raider: Underworld, for example were overwhelmed by the likes of Fallout 3, Gears of War 2 and, of course, Call of Duty: World at War.

The Christmas season is thereby being extended as game makers increasingly stagger releases. Microsoft, for one, beat the rush and put out its main holiday title Halo 3: ODST, the latest in its flagship franchise back in September. Sony did the same with its big game, Uncharted 2: Among Thieves, which came out mid-October.

More focus on post-holiday season

Meanwhile, several big sure-fire hits franchise games that could have been expected to be part of a holiday lineup are scheduled for late winter release. The latest Tom Clancy game, Splinter Cell: Conviction, and the Sony-exclusive God of War 3 are slated to hit stores in March and February, respectively.

The post-Christmas season might turn out to be the biggestone yet as a result, Rivait says.

"The games don't stop after the holidays, which is awesome for gamers," he said.

Matt Levitan, marketing manager for Sony Computer Entertainment Canada, says the industry has learned from games such as Grand Theft Auto IV, the reigning best-selling title, which was released in April last year. Staggered releases allow consumers to buy more games because they don't have to choose only the ones they can afford in a given month.

"Our best-selling game so far in 2009 has been Killzone 2, which was released in February, followed by inFamous in May," Levitan said. "Two of my favourite games from the past few years were not holiday titles, with Metal Gear Solid 4 released in June and Grand Theft Auto IV released in April of 2008."

Nintendo has also made a point of avoiding holiday overload. Super Mario Wii, which launches next week, is expected to be a big seller for the company but it's also well spaced out from Nintendo's other big games, such as Wii Sports Resort, which came out in July.

"We've been staggering things throughout the year," says Nintendo spokesperson Matt Ryan. "We didn't want to have 10 first-party titles launching during the holiday time period because we wanted to focus on the quality of the games that did come out."

Even still, the game companies are banking on the holiday period in a big way, says David Cole, an analyst at DFC Intelligence. Modern Warfare 2, which is expected to bring in up to $500 million in its first week, and recent price cuts on consoles by all three manufacturers should help the industry make up for an otherwise forgettable year.

"[Console price cuts are] going to spur a new group of consumers, hopefully, to come into the market," he says. "You can basically make up for a bad year in the holiday season."