My argument is not that people don't want to play CoD. My argument is that even Activision wants Apple and come in and kill the current console paradigm. They don't want to keep making 30% of $60 games that sell 10 million copies when they could be making 70% of a $10 game that moves 50 million copies.
I don't understand. Are you saying that Activision should kill CoD and fund the next Angry Birds so they could sell more copies of a cheaper game, or are you saying that CoD could sell 50 million copies if it was priced at $10?
Both of those claims are questionable. I am pretty sure Activision is scared shitless of becoming the next Rovio, and I doubt CoD would even break even being priced at $10.
Considering that CoD had a 200 million dollar budget, they would need to sell 20 million copies to break even vs 3.33 million, and consider to date (4 months) they have sold 20 million copies.
Even if such a price cut caused sales to double, you would have:
20 million * $60 * 30% - $200 million = $160 million dollars
40 million * $10 * 70% - $200 million = $80 million dollars.
Again, they would break even with their old model if they sold ~50 million copies, however, I don't think "hardcore" gaming is that price sensitive, and I doubt we would see a 150% increase in sales if you cut CoD's price to $10.
Lastly, where would these people come from? I don't think Activision has an untapped market 5x their current market size that want to buy Call of Duty but only for $10. Even if you talk about opening to the "casual" market, Nintendo showed us just how toxic that is. Casual gamers don't buy games. I'm sure its a lot smarter to sell to the gamer who buy 3 games a year @ $60, than it so to sell to 5 people who will buy 1 game /year @ $10. So if Activision could sell 50 million copies of CoD, would that stick them in the same position as Rovio, where all they can do is sell CoD, while WoW and Diablo bleed cash?
Wait, you're doubting whether a price cut of 85% would even double sales? With a demand curve like that someone will need to tell the game companies they are leaving billions on the table when they could be charging $150 a copy.
I'm pretty sure we'd see sales explode on price alone but the limited console installed base is also depressing game sales. A large percentage of high end console users use them primarily for netflix and other non-gaming uses but they aren't marketed effectively for these uses. Apple isn't even marketing the ipad as a game machine but they move far more $300+ units than Sony and MS put together each month.
"I don't think 'hardcore' gaming is that price sensitive"
You're talking yourself into a conclusion here. Not only "hardcore" gamers enjoy playing Call of Duty. {And the notion of console fps players being hardcore itself is problematic}