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"Call of Duty" Is Coming to Mobile

By Keith Noonan – Updated Apr 15, 2019 at 11:33AM

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Why Activision Blizzard's team-up with Tencent could be a big success.

Activision Blizzard (ATVI -2.42%) and Chinese media giant Tencent (TCEHY -0.08%) took the wraps off Call of Duty Mobile in a recent presentation at the Game Developers Conference in San Francisco. The partners on the project debuted an action-packed trailer that was less than a minute long but showed some promising footage. With the title's impressive visuals and fast-paced, feature-packed gameplay, it looks like the effort to bring the popular first-person-shooter franchise to mobile is heading in the right direction.

The first official look at the franchise's debut mobile entry seems to be going over well with fans of the series, too, and the title has a good chance of being a hit when it launches later this year. That's encouraging for shareholders because Activision needs hits to offset what looks like a slow release year for the Blizzard wing of the business, and Call of Duty Mobile is a key release in the company's push to bring more of its big franchises to smartphones and tablets and broaden its reach around the globe.

Check out the latest earnings call transcript for Activision Blizzard.

A screenshot from Activision and Tencent's Call of Duty Mobile.

A screenshot from Call of Duty Mobile. Image source: Activision Blizzard.

The name says it all

Call of Duty Mobile probably won't win any awards for creative titling, but its direct-to-the-point name seems to be in line with what the game aims to deliver. The upcoming release promises a free-to-play experience that packs in some of the series' trademark run-and-gun gameplay while offering fun multiplayer experiences. And if it makes good on all that, there are reasons to be optimistic about the title's chances on the market.

To Tencent and Activision's credit, Call of Duty Mobile captures the look and spirit of recent series releases. The title appears to sport high-quality visuals and incorporate some of fans' favorite environments, characters, and weapons. Whether the signature run-and-gun gameplay will make a smooth transition to the touch-screen controls of mobile platforms remains to be seen. But if the developers nail that aspect, the project could be a big hit.

The Call of Duty (CoD) franchise has been remarkably successful, and there's a fair chance that its winning streak can be extended to mobile. Activision typically launches a new entry in the franchise each year, and its annual releases have ended up dominating the sales charts over the last decade. Even relative underperformers in the franchise have easily passed 10 million unit sales. That doesn't guarantee that CoD will have a successful transition to mobile platforms, but it does suggest there's an established fan base to tap into as well as a wide pool of new players to win over.

CoD Mobile is an important game for investors to watch

Call of Duty Mobile will be the series' first real experiment with the free-to-play distribution model that's increasingly being tested for big-budget games -- making it an important release for the franchise and Activision Blizzard. CoD games have typically hit the market at the $60 price that's common for triple-A titles, and there's been strong demand at the premium price point. So it's reasonable to expect there could be a big market for a free, pared-down take on the property.

But just because CoD Mobile will be available as a free download doesn't mean it won't bring in some cash. The game will likely be monetized through in-game purchases, as is typical with free-to-play games. It's also possible that Activision Blizzard will use the mobile version to test some of the ad-based monetization schemes it has been working on.

The title will face some tough competition in the shooter space -- with battle royale games like Apex Legends and Fortnite currently all the rage with players. That said, Call of Duty Mobile should be able to carve out a sizable player base as long as its core gameplay is satisfying and the title features an appropriate amount of content.

Activision Blizzard has its sites set on global growth

While CoD Mobile will face big competition, the gaming industry can actually support a large number of high-profile titles because the overall market is still growing at a healthy clip. A lot of that growth is happening outside of the North American, European, and Japanese markets that have historically been the industry's key territories.

Crucially, CoD Mobile has the potential to be a hit in China and other international markets where Activision Blizzard is keen to build its position. The mobile version was mostly developed by Tencent -- making it much more likely that the title will be able to have a Chinese release. China requires that non-domestic companies partner with local ones in order to release games in that country, so the team-up between Activision and Tencent makes a lot of sense. The American company is also partnering with Chinese developer NetEase for its upcoming game Diablo Immortal.

With China's regulatory agencies shifting and a trend toward increasingly stringent standards for attaining release licenses, there's still a significant risk that CoD Mobile won't be able to launch in that county. Activision and Tencent will still need to secure a release license from the country's online content regulation body. Both companies have experience with navigating the requirements of the country's censors, and regulators have recently resumed granting licenses. So the right approach is probably to be cautiously optimistic for a Chinese release at this point.

Triple-A, big-budget gaming experiences are going free-to-play on mobile, and a high-end Call of Duty could stand apart in the crowded mobile game field. There are still some key hurdles for the game to overcome, but the upcoming title has a lot of potential -- and it's one investors should keep an eye on.

Keith Noonan owns shares of Activision Blizzard. The Motley Fool owns shares of and recommends Activision Blizzard, NetEase, and Tencent Holdings. The Motley Fool has a disclosure policy.

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