Analysts: Call of Duty sales down year-over-year — but it still did better than expected

This article originally said that Destiny was the No. 4 best-selling game at U.S. retailers in 2014. That is not correct. It was No. 3. We’ve fixed this, and I apologize for the error.

We are on the other side of the Call of Duty sales peak, but the military first-person shooter’s sales performance is surprises experts.

Call of Duty: Advance Warfare’s sell-through rate to customers was down approximately 6 percent compared to Call of Duty: Ghosts in 2013, according to industry analyst Doug Creutz with investment firm Cowen & Company. That includes both physical and digital sales, which Creutz estimates was around 17 percent of the total copies sold. This dip in sales is despite that Advance Warfare was the best-selling game at U.S. retailers last year, according to industry-intelligence firm The NPD Group. This represents the second year in a row that Call of Duty sales have decreased. While that’s disappointing for a series that regularly raked in more than a $1 billion annually, Advance Warfare actually did better than expected.

“Call of Duty’s [sales were] not quite as bad as we expected,” Creutz wrote in a note to investors. “Including our estimate of digital sales, we estimate Q4 Advanced Warfare unit sell-through was down 6 percent year-over-year, though dollar sell-through was down around 10 percent year-over-year on lower physical average selling price.”

Analysts with Wedbush Securities also noted that Advance Warfare sold better than they were expecting based on the results of the December NPD report.

But while Call of Duty defied some low expectations, the series will likely keep declining overall.

“We continue to believe the franchise has peaked,” said Creutz. “And we note that 2015 will not bring any easier of a competitive slate with Star Wars: Battlefront, Halo 5, and The Division — at least — all expected next fall.”

Activision has prepared for a potential decline in Call of Duty sales by releasing Destiny in 2014, which is a sci-fi shooter from Bungie that finished last year as the No. 3 best-selling U.S. retail game. It was also No. 2 in terms of revenue, according to Activision. The publisher has also opened up the free-to-play Call of Duty Online to all players in China, which is a market that is already spending more than $1 billion on similar games.

And of course, Call of Duty will continue to sell to its dedicated core group of fans. That market won’t evaporate overnight, and the people who made Advance Warfare the best-selling game of 2014 will likely return in 2015 as well.