Assassin’s Sales Crash

Assassin’s Creed: Unity’s release debacle has left two questions that the flurry of press coverage has yet to answer: what is a publisher’s obligations when it cancels a digital product, and what are the idiomatic and reputational risks of shipping an incomplete product?

Spoilers: It’s expensive, but due to idiomatic factors, it may not matter for Ubisoft.

Ubisoft decided very early on in the game’s launch to cancel the game’s season pass, effectively offering the content as an apology gift to mollify frustrated consumers. The free game to passholders was announced within three weeks of release, and this could effectively set a (costly) standard for future situations with publishers. A free game was offered, including a selection of titles (The Crew, Far Cry 4, Watch Dogs, Just Dance 2015) that were still brand new. It’s a safe assumption that this offer cannibalized at least some sales of those respective titles. EA’s Mass Effect 3 had an over 40% day-one DLC attach rate, and Gamestop has great success in obtaining similar rates for some titles.

(Incidentally, I raised the possibility of a season pass meltdown in my post from last May.)

Specific pre-order numbers (and season pass sales) for AC: Unity are not publicly available, but as a thought exercise, it’s feasible to use estimates of 1 million pre-orders and a 20% overall season pass among those buyers, who are largely core gamers and more accustomed to season passes. Those estimates would imply 200,000 season passholders who are now receiving a $60 MSRP game for free, or $12 million in cannibalized sales revenue. While perhaps small in scale to the overall development and marketing budget, which likely exceeds $100 million, these are not insignificant.

Ubisoft’s conduct regarding AC: Unity post-launch was appropriate, and it was shrewd to offer compensation for the game’s problems. The fine print that prevents consumers who accept the offer from then suing Ubisoft, a la Aliens: Colonial Marines, was wise from a legal standpoint. However, this sets an expensive precedent, both in lost revenue and reputation. Depending on the analytics projections of how many passholders would have bought another Ubisoft title independently, it may have been more prudent to simply offer a credit on future Ubisoft purchases.

However, revenue aside, what are the reputational risks of shipping an incomplete product? This hurts both the Assassin’s Creed franchise, a cash cow, and Ubisoft’s own reputation as a publisher. A triple-A title isn’t Steam Early Access, where consumers understand that they are purchasing potentially buggy works-in-progress.

Does this hurt the long-term sales potential of future titles? There aren’t many examples to look at from the past console generation. Battlefield 4 suffered major problems with its online competitive play servers, but it didn’t even impact long-tail commercial sales in EA’s estimation. One will have to wait until Battlefield 5 to really have a qualitative example.

I would posit that this won’t have any impact on Assassin’s Creed’s sales, but not because broken games don’t matter. This is about the idiomatic risk inherent in franchise longevity and resulting fatigue: there is arguably a curve to how long a franchise can post stronger sales numbers before it enters a decline.

Call of Duty is the most prominent example. Its outsized presence in the holiday season began in 2007, but it has been in a steady decline since Modern Warfare 3 in 2011. Since then, each successive entry has seen year-over-year sales declines in double-digit percentages.

We can also look at Guitar Hero for a similar case. The series peaked in sales at its third numbered title, and from Guitar Hero: World Tour onward it followed the sharp fall that befell the entire music genre. The franchise was killed after the Guitar Hero 6: Warriors of Rock failed to break 100,000 copies during its launch. Here, we still see a peak halfway through its lifespan followed by snowballing declines, as Call of Duty is experiencing. Since Guitar Hero had a lower peak, however, it didn’t have the remaining sales to sustain it as Call of Duty does.

For a Ubisoft franchise example, there’s Just Dance, the company’s second best-selling franchise. Just Dance 3 sold over 7 million units. By contrast, Just Dance 2014, the fifth main game, only shipped 6 million.

All these franchises speak to a sales curve of sharp sales growth that plateaus between titles 3-6, and then freefalling as quickly as it had grown.

Assassin’s Creed seems to be following a similar trend. Its fourth numbered entry, Black Flag, experienced a 16% year-over-year sales drop. Unity has certainly had a similar drop, after its problematic launch.

Looking at new IPs debuting on the new console generation, Destiny and Watch Dogs developers are both making 10-year plans. While that is not a definitive omen, it does reflect an implicit understanding that, apart from evergreen franchises like Nintendo’s, AAA IPs seem to have a maximum lifespan of a decade.

What would that mean for Assassin’s Creed: Unity and the franchise as a whole? That the franchise is already in its long-term decline. Matching up Call of Duty’s annualized lifecycle against Assassin Creed’s, both started declining by the fifth or sixth year of annualized sequels. (CoD began annualization in 2007 and peaked in 2011; AC in 2009 and 2012). The same pattern holds for all the aforementioned examples.

Ideally, quantitative analysis would be more authoritative than qualitative, but there are only a limited number of hugely successful annualized franchises. Comparing Assassin’s Creed’s path against other prominent franchises is as close to an apples-to-apples comparison as one can get.

What’s also concerning is that there may be a limit to how much improved quality can bring consumers back to a franchise. Call of Duty: Advanced Warfare had a double-digit decline over Ghosts despite a far more positive critical reception.

Thus, Ubisoft currently does not have a reason to believe that it can revive a franchise’s flagging sales numbers, given the examples of other franchises, including one of its own (Just Dance). It can continue using Assassin’s Creed as a cash cow for a few more years, and it should strive to ensure that the franchise remains popular for long enough that the franchise’s movie, slated for late 2016, doesn’t release after the fanbase has already shriveled up.

Beyond that, models for reversing a sales decline don’t exist yet, and while ideally Activision and Ubisoft can pioneer those strategies, the market should not expect these IPs to remain relevant by the late 2010’s.


3 responses to “Assassin’s Sales Crash

  1. I haven’t looked at the numbers, but I’d guess Assassin’s Creed’s sales started declining with one of the too many direct sequels to Assassin’s Creed 2. I think Ubisoft could turn the franchise’s fortunes around, but that’d take some changes and attempts at building a new experience in these games, that, given how rushed Unity seems to be, I don’t think they’re willing to take. Rather, it seems they’re just trying to fit as many games as they can into this window before the series’ popularity sinks to the point where it’s no longer profitable to make them.

    In any case, their move in making things up to the customers is a really good one, high cost and all. That was one of the things that I got repeatedly drilled into me through my business classes; nothing builds up loyalty so much as fixing your screw-ups and making things right for your customer.

    • Most of the discussion around AC sales involves Black Flag’s decline compared to AC3 the year prior. I wouldn’t be surprised if the AC2 sequels had lower sales, but it doesn’t seem correct to look at them with the same expectations as numbered titles.

      Do you think that this counts as “making things right”, though? I agree that given the circumstances, Ubisoft was adept at damage control and containment, but the decision to release the game as-is and impose a review embargo reveals a focus on profitability at consumers’ expense, regardless of how they handled the debacle after the furor started.

      • They never should have released it in that state in the first place. That was a grave error on their part, and they’re never going to be able to take it back. Ubisoft has been focused on profit ahead of customer value for the longest time, and I’m not seeing this changing anytime soon. I can’t imagine they made this move entirely altruistically, at some level, their focus is on the bottom line, likely in the hopes of avoiding customer loss.

        That said, though, I was originally thinking that through providing such new AAA titles in compensation, they were offering a lot more in recompense than they had to. I know other game companies have gotten away with less when they had to make nice with their customers. Specifically I was thinking about the whole Mass Effect 3 ending deal, where Bioware released a new ending that was almost as tone-deaf as the original, switched some numbers around, and everyone shut up about it, and the Sony hack, where the games offered as an apology/don’t sue us gift were nice but a few years old and not exactly the top of their catalog. However, I was thinking that Ubisoft’s gift back was in addition to getting your money back, not in lieu of it. I’m a lot more sour on the deal now that I looked into it and didn’t notice that they’re just giving refunds.

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