Activision to export ‘Call of Duty’ game to China

Activision is taking the war to China.

The Santa Monica company Tuesday said it plans to debut a free online version of its popular “Call of Duty” shooter game in China this year.

The game, which is being developed in Shanghai, will be tailored to how people play games in China, namely online and largely in Internet cafes. Players in the U.S. and Europe, on the other hand, prefer to buy their games from a store and take them home to play on computers or consoles.

Although players in China will not have to pay for the game, they would have the choice to buy enhancements, more powerful weapons or special gear for their virtual soldiers. With software piracy rampant in China, game publishers have avoided selling packaged discs, instead opting to sell virtual goods within the framework of a “free” game.

Edward Williams, an analyst with BMO Capital Markets, said in a note to the company’s investors that the potential for Activision to reap profits from this venture is “significant.”

“The current reigning first-person shooter game in China is ‘Cross Fire,’ a Korean game that launched in the country back in 2008 and is also distributed by Tencent,” Williams wrote. “That title hit a record of 2.8 million online concurrent users last summer. While the companies did not provide launch details of the game, we expect a beta period to begin this year with a commercial launch, pending regulatory approval, to occur early in 2013. In time, we believe this could be a significant revenue and profit generator for Activision.”

Activision tapped Chinese Internet powerhouse Tencent Holdings to run its online title, as well as manage the purchase transactions.

Tencent, based in Shenzhen, has made a number of investments in the U.S. In June, the company paid an undisclosed amount to buy 40% to 49% of “Gears of War” creator Epic Games in North Carolina. Tencent also spent $400 million last year to buy a majority stake in Riot Games, an online game company in Santa Monica.

Terms of Activision’s deal with Tencent to operate “Call of Duty” in China were not disclosed.

RELATED:

Activision settles ‘Call of Duty’ lawsuit

‘League of Legends’ tries to conquer the world

‘Gears of War’ creator sells minority stake to Tencent