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Analyst: Subscription Call of Duty In China Could Bring In $100M For Netease

Chinese World of Warcraft operator Netease may extend its relationship with Activision Blizzard with a Call of Duty subscription service that could bring in up to $100 million in first-year sales, says one analyst.
Analyst Mike Hickey with Janco Partners said in a Friday research note that Chinese World of Warcraft operator Netease and Activision Blizzard could ink a new licensing deal to bring a rumored Call of Duty subscription service to China. If established, Hickey said, the service could bring in $50-100 million in first-year sales for Netease, which picked up the lucrative operating rights for Blizzard's World of Warcraft from former Chinese operator The9 last year. The service could generate 15 to 30 cents per share in its first year, Hickey estimated. Santa Monica, CA-based Activision has yet to announce a subscription service based on the Call of Duty military shooter franchise for Western territories, let alone one for China. But Activision CEO Bobby Kotick has been candid about wanting to further monetize the series through subscriptions. Kotick recently said that "Today, probably 70 percent of our operating profit comes from non-console-based video games." The PC MMORPG World of Warcraft is a top money-maker for Activision Blizzard. Blizzard, which just released the chart-topping StarCraft 2, is currently at work on an unannounced MMO, which Hickey said Netease and Activision Blizzard could also partner on for a Chinese release. Janco Partners estimates Netease to generate $769 million in sales in its current fiscal year.

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