Activision aims for another $1 billion Call Of Duty bounty

November 5, 2013, 10:04 PM UTC

FORTUNE — It’s another November, which means gamers around the globe have lined up for midnight launch events to be the first to play Activision’s Call of Duty: Ghosts. The game publisher is celebrating the 10th Anniversary of Call of Duty this year, which has generated over $8 billion in sales and an additional $1 billion in downloadable content. The last four games have each generated over $1 billion at retail within two to four weeks of launch. And this new game from developers Infinity Ward, Neversoft, and Beachhead Studio, should keep that record streak intact.

Michael Pachter, video game analyst at Wedbush Securities, forecasts Activision (ATVI) will sell 20 million copies of Call of Duty: Ghosts this year. While that would crest the $1 billion mark yet again, those numbers are 10% below Call of Duty: Modern Warfare 3 sales and 20% below peak sales of Call of Duty: Black Ops.

The franchise has managed to retain high aggregate scores over the years. But the real power of Call of Dutycan be found with online gameplay. Over 18 billion online multiplayer matches have been played to date. Every day gamers around the world play a combined 1,900 years of Call of Duty online.

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That online audience is about to grow with the launch of the first free-to-play game, Call of Duty Online, in China this year. Pachter believes this game will generate $100 million for Activision this year, and that number is expected to rise moving forward.

Call of Duty: Ghosts’ campaign story was co-written by Hollywood director Stephen Gaghan (Syriana), who embedded himself in the Infinity Ward office during part of the development. The new game takes place in the near future, a decade after the enemy faction called the Federation has hijacked America’s Star Wars defense system, Odin, and destroyed parts of the U.S. America is in a war against an enemy that’s better equipped, but they have the elite Special Forces Ghosts on their side. Players step into the combat boots of a Ghost and embark on a global quest that spans tank battles in the desert, piloting an attack chopper around ocean oil rigs, fighting enemies underwater, and even taking part in a pair of space battles.

“It’s a great combination of sci-fi and flat-out gritty military action,” said actor Stephen Lang, who plays Elias Walker in the game. “It’s very appealing to me. I like the locales that they choose and all the diverse places the story goes. It’s like a movie.”

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Actors Brandon Routh, who plays Ghost Sergeant David “Hesh” Walker, and Kevin Gage, who plays antagonist Gabriel Rorke, joined Lang in the new game. Activision employed a combination of motion capture, facial capture, and traditional voice acting to bring the characters in this game to life. The process is similar to the approach James Cameron used for Avatar.

“From my own personal experience, it was just a ridiculous challenge trying to get from Point A to Point B without getting shot,” said Gage, who hasn’t played the new game yet but has played the franchise in the past. “You really felt like you were in a battle situation without the fear of dodging bullets. Obviously, it wasn’t like really being in battle. There was no fear factor. But as far as the excitement, and then the kill factor and having to be strategic and stealth and all of those things, it connects with that primal thing in our DNA.”

One of the standouts from Call of Duty: Ghosts isn’t an actor. It’s the four-legged star, Riley, the German Shepherd who helps the Ghosts in dangerous situations throughout the game. Players actually take control of Riley in several sequences. And the dog is also playable in multiplayer.

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Lang is now part of two of the biggest entertainment franchises of all time, having starred in Avatar, the top film of all time, and now playing a central role in Call of Duty: Ghosts. He sees similarities between video games and big budget Hollywood movies.

“Visually, video games have evolved to keep up with the more demanding and sophisticated audience,” said Lang. “As an audience, we want things to be more imaginative, more lifelike, more immersive and more surprising in a delightful way when you go into an environment and you say, ‘Wow, this is an amazing place.’”

Thanks the PC, Xbox One, and PlayStation 4, the world of Call of Duty has never looked so vivid. After the PC, Xbox 360, PlayStation 3, and Wii U versions launch on Nov. 5, next-gen editions will be available on Nov. 15 and Nov. 22 with the debuts of Sony’s PS4 (SNE) and Microsoft’s Xbox One (MSFT).

“Next generation gave us the opportunity to create a new game engine, which opened up a lot of doors for gameplay,” said Mark Rubin, executive producer of Call of Duty: Ghosts. “We focused a lot of our tech on immersion, not just visually, but audio as well. We aimed at making the player feel even more immersed in the experience, to a level where you never feel like you’re in a game. We want you to feel like you’re in a cinematic movie, and so the audio, the graphics, and the animation system were all done with that level of immersion in mind.”

Microsoft has extended its partnership with Activision to deliver Call of Duty downloadable content to Xbox gamers first for a 30-day exclusive window. This type of deal has been important for Microsoft in the competitive console space, giving gamers an incentive to opt for the Xbox version of the game over the PlayStation. Activision will release four DLC map packs through 2014.

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In addition to a wide assortment of multiplayer modes and the addition of female soldiers, Call of Duty: Ghosts introduces a new four-player cooperative mode called Extinction. This story-based experience connects to the main campaign but adds alien enemies to the mix as four players battle against hordes of attacking creatures.

Call of Duty: Ghosts goes head-to-head with the recently launched Battlefield 4 from Electronic Arts (EA) and developer DICE. Pachter forecasts that Battlefield 4 will sell 15 million copies this year globally with three to five million gamers picking up both the new Call of Duty and Battlefield games. Pachter believes when all is said and done next year, Activision and EA will sell a combined 45 million copies of Call of Duty: Ghosts and Battlefield 4. It will be a close fight, but Activision is expected to once again emerge victorious.

Call of Duty is the most popular ‘core’ game franchise in the world in terms of number of players,” said Peter Warman, founder of video game research firm Newzoo. “Over 200 million gamers worldwide will play one of the Call of Duty franchises this year, 65 million in the U.S. alone. Franchise sales are approximately 150 million worldwide. And let’s not forget DLC map pack sales, which I expect to be at about 25% of new boxed revenues.”

Warman estimates that there are 150 million Battlefield games in homes around the world with 40 million in the U.S. He believes about half of core gamers will buy both Call of Duty: Ghosts and Battlefield 4. To date in the U.S., 53% of Call of Duty players also play one of the Battlefield games.

For gamers, having two massive shooters going head-to-head helps drive innovation between game development studios. It also helps the overall industry, especially in this transition time with core gamers upgrading to new consoles. Activision has invested heavily in marketing the new game, including a commercial directed by James Mangold and starring Megan Fox. Call of Duty: Ghosts is poised to be the second billion game of this fall, following in the successful footsteps of Take-Two Interactive’s Grand Theft Auto V.