Activision Blizzard CEO Bobby Kotick and Tencent president Martin Lau.

JULY 3, 2012 • Activision Blizzard, Inc. and Tencent Holdings Ltd. confirmed their partnership to release Call of Duty Online in China. The title has been in development for the last two years, and has been built upon the multiplayer experience of existing Call of Duty titles. Tencent says Call of Duty Online will introduce a new gaming model designed specifically for the Chinese market that gives players greater options to better personalize their weapons, characters and equipment more than in previous Call of Duty games through an in-game store. The most popular online FPS in China today is Cross Fire, which topped 2.8 million concurrent users last year. Cross Fire was developed by SmileGate in South Korea, and is managed in China by Tencent.  Until the announcement little was known about Call of Duty Online except for references to a Call of Duty Asia MMO made during the contentious legal proceedings between Activision and former Infinity Ward studio heads Jason West and Vince Zampella.

Impact: In the latest July 2012 market forecasts, DFC Intelligence is forecasting the game market in China to reach $6.7 billion in 2012.  For foreign companies looking to take advantage of this market it is crucial to pick the right Chinese partner to operate the game in China.  There is really no other option than licensing to a China-based partner.  Popular companies to partner with have included Shanda (THQ, Tecmo and Trion), Changyou (Battlefield Online from Electronic Arts), NetDragon (Hasbro, Disney and Electronic Arts), and Shiji Tiancheng.  Tencent is the largest game company in China but only with the acquisition of Riot Games in early 2011 and the release of League of Legends later that summer did Tencent get seriously involved with releasing Western products in China.  At the Global Game Industry Forum at this year’s E3, DFC Intelligence showed how League of Legends was far and away the most played PC game in North America and Europe.  However, when it comes to revenue the Call of Duty franchise is an even bigger giant.  This must be somewhat of a blow to Netease who Blizzard had just renewed as the operator of World of Warcraft.  Netease was presumed to be the China operator for Diablo III, but Blizzard may be testing the waters to see who can provide the best service.