CoD: Advanced Warfare Pre-orders Sales Down Doesn't Mean Out

Call of Duty Advanced Warfare pre-orders fall short of expectations but do they truly reflect possible launch date sales?

According to the data, Advanced Warfare is expected to sell 40% less than Ghost's and 70% less than 2012 Black Ops 2. Cowen & Co.' analysis of Call of Duty: Advanced Warfare pre-order sales suggest the decline of the series to continue this year. Cowen Group Inc. is a firm that provides research and sales trading services for a wide range of businesses. Looking at Amazon pre-order figures for the game, research suggest AW will fall short from its previous games. Cowen & Co. speculated this as an indication the franchise has reach it climax.

In a statement from the research notes:

Advanced Warfare is now pacing almost 40 per cent behind last year's Ghosts (vs. 50 per cent last week) and almost 70 per cent behind 2012's Black Ops 2 (vs. 80 per cent last week). We continue to believe CoD will be down meaningfully vs. last year. With the franchise facing two consecutive significant year on year declines in sales, we think it is prudent to assume it has peaked.

Looking back at CoD: Ghosts, pre-orders were well below expectation due to a result of platform uncertainty. According to a source, Activision Publishing president Epic Hirshberg stated in 2013 that hesitation amongst past CoD pre-orderers was because of console transition without a clear platform players could pre-order for.

Surprisingly enough despite the dip in pre-orders, digital sales in Q2 2013 broke records. The question then is, does digital sales and pre-orders get factored into analyst expectations? 

When looking at COD: Modern Warfare 3, we see that it didn't hit its milestone of $1 Billion until 16 days after launch [Source]. The issue then comes down to the pre-orders and not necessarily with Call of Duty. Both Activision and Gamestop confirm that a significant portion of sales are digital, which are not seen in pre-orders. 

In an article by Games Industry, it states that AW is expected to outsell Destiny. Regardless of the expectations of a dip in COD: AW sales based on pre-orders, Cowen & Co. notices three key points of the research "(1) preorders for Call of Duty are down (2) Call of Duty is normally a significant percentage of overall preorders and thus (3) interested parties are concluding that preorders are secularly declining relative to overall sales."

Currently, Call of Duty: Advanced Warfare is ranked #2 under Destiny above critically acclaim titles like Middle Earth: Shadow of Mordor, Borderlands: The Pre-Sequel, and The Evil Within.

You may be wondering what are the methodologies used to come up with these expectations. From the research notes, Cowen & Co. listed the following ways they factored their expectations.

1. "Every week between E3 and the end of the calendar year, we measure the Amazon video game sales ranking for all AAA core gamer titles which are due for release between August and December, capturing data for Xbox and PlayStation consoles (both generations)."

2. "We take those rankings and apply factors from a multi-variable regression analysis that we performed on the 2011-13 data to arrive at a score for each game."

3. "The resulting score is meant to be a more or less linear measure of total sales of the game across all SKUs up to that point; pre-launch, it is an estimate of preorders, and post-launch, it is an estimate of total sales. Thus, a title with a score of 50 is estimated to have sold/pre-sold twice as many units as a title with a score of 25."

Do you feel 3rd party research firms truly know about the gaming business and can make accurate expectations? Tell me your thoughts below!

Published Oct. 30th 2014
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