The big news for MMO watchers in Activision Blizzard’s quarterly report was the mention that World of Warcraft was down to 10.3 million subscribers, a loss of nearly 2 million from its 2010 peak.
Wait, where did I get that 2 million number?
Last year’s end of year report from Activision Blizzard stated that, as of Dec. 31, 2010, there were more than 12 million World of Warcraft subscribers.
As of October 7th, 2010 Blizzard claimed 12 million subscribers world wide.
Cataclysm came out between those two, which must have bumped up the subscriber base some, though we cannot tell exactly how big of a bump that was. Still, selling 4.7 million units in in the first month probably a reasonable indication that some players came back for the expansion, especially since China did not get Cataclysm until this past summer.
So I think we can safely assume that, at some point in December there was a subscription peak at least close to 12.3 million. And with the statement that WoW is down to 10.3 million, 2 million missing subscribers seems to be a reasonable estimate to throw around.
So that is my number.
What does it mean?
While I feel some of it is repudiation of the direction Cataclysm went, with its very solo-centric feel, my gut say that having just five levels of content, and pretty easy content, just wasn’t enough to keep the non-raiders hanging around.
The raid-or-die crew will blast through the content to get to work on raiding, but will hang out doing that for a long time. People like me are more invested in a slower climb through the new zones, and those five zones were pretty fast. That and I think the value people put on the new 1-60 content was pretty low.
Anyway, mistakes were made and at some point next year Pandas will either fix them or make them worse, we shall see.
But does being down 2 million subscribers, a 17% dip from peak (my estimate), mean doom for Blizzard?
The Activision Blizzard third quarter results bear that out pretty strongly.
Way down near the bottom, the results are broken out by “segment,” which means three different sections of the company:
- Activision Publishing (“Activision”) — publishes interactive software products and content.
- Blizzard — Blizzard Entertainment, Inc. and its subsidiaries (“Blizzard”) publishes games and online subscription-based games in the MMORPG category.
- Activision Blizzard Distribution (“Distribution”) — distributes interactive entertainment software and hardware products.
Revenue for Activision was $253 million for the last quarter and $898 million for the year so far.
Revenue for Blizzard was $297 million for the last quarter and $968 million for the year so far.
So the Activision and Blizzard sides of the houses are not far out of syn when it comes to how much money they bring in before expenses. And the numbers for Distribution, just to round this out, were $77 million for the last quarter and $214 million so far in 2011.
Then there is income, which is the amount of money left after they paid all the bills but before they paid taxes.
Income for Activision was… well… they fell short $36 million dollars last quarter, and for the year it has made a grand total of $42 million.
Income for Blizzard was $120 million last quarter and it has made $425 million dollars in 2011 so far.
And Distribution is in for a million dollars of income this year.
So with revenues that are reasonably close, Blizzard has made TEN TIMES as much income this year as Activision.
Not only that, Blizzard makes more than 43 cents on every dollar it takes in. So of your $14.99 subscription fee, $6.58 cents go into a bucket that might as well be labelled “Profits and/or Bail Out Money for Bobby.”
Okay, yes, it is a bit more complicated than that. There are other costs and taxes that come in after that number. And the numbers are down from last year, which is partially because Blizzard didn’t ship anything new in 2010 and partially because of the subscription slide I am sure. But those are still really solid financials.
Call of Duty merely meant that Activision wasn’t nearly as big of a drain of Blizzard’s money making acumen as they might have otherwise been.
Blizzard has been saving the day since was joined up with Activision.