Welcome to the Wrath of the Burning Panda Cataclysm.
Expansion IV – A New Hope
Well, it hasn’t been a good week for news if you are a fan of subscription only MMOs. Star Wars: The Old Republic threw in the towel and declared for free to play while other games that already converted continued to dig themselves further into the cash shop morass, whose depths I am sure we have yet to plumb.
And now it has come out that World of Warcraft has shed another million or so users, bringing the game from 10.2 million subscribers at the end of Q1 2012 to 9.1 million subscribers at the end of Q2 2012. More people picked up a copy of Diablo III in Q2 (10+ million) than remained subscribed to WoW.
I went back to look at the Q1 2012 and Q4 2011 results and they both pegged the subscriber base at 10.2 million for WoW, while the Q2 2012 results show the 1.1 million subscriber drop.
Which leads me to some thoughts.
The stability of Q1 must have been partially because of subscription overhang. People cancelled but their subscriptions hadn’t run out. Then again, WoW only shed 100K subscribers in Q4 2011. How much overhang could there be?
Oddly, there was a report towards the end of Q1 that SWTOR was having an impact on WoW. I wonder how that idea works in retrospect? In Q1 WoW was stable and SWTOR shed 400K subscribers.
While WoW hasn’t taken the short term dive in subscribers that SWTOR has, at least as a percentage of total, it is still down from a post-Cataclysm peak of “more than 12 million” at the end of 2010 to 9.1 million midway through 2012. That is a 25% drop in 18 months.
There is still no breakout of the subscription numbers between Western and Asian subscribers, who pay very different rates to play the game. Losing a million Western subscribers would probably be a much bigger hit to the bottom line than a million Asian subscribers.
It is probably no accident that Mists of Pandaria is set to launch about a month before the first of the million players (around 20% of the Western subscriber base) who signed up for the Annual Pass plan, which got you a free copy of Diablo III, wrap up their one year commitment. I am free to cancel come Halloween.
My gut says that we are past the point where a new expansion can boost subscriptions significantly. If nothing else, there is the curse of the level based game with which to contend. 90 levels and four expansions start to look daunting to new players. You cannot just join up and play with your friends who are at level cap. Think EverQuest’s long, graceful decline into old age. (For a game at least.)
Unlike early MMOs, no one game seems to have replaced WoW. EQ siphoned off PvE players from Ultima Online. WoW became the new EQ. But WoW’s decline is not due to one game… there is no “WoW Killer”… but to a profusion of games in the market. And many of those games came about because WoW was so profitable that other players wanted in.
And, of course, all that crowding pushed alternate payment models, and so “free” became the operative word. Not only do you have a lot more choices now, but for a lot of them you no longer need to buy a box and sign up for a monthly subscription. It is hard to compete with free… at least for specific definitions of free.
WoW still remains an outlier in the subscription MMO world, with a huge subscriber base and an insane profit margin, and still seems likely remain so for some time to come.
So what is it going to be? Will Pandas give Azeroth a decent surge in subscriptions? Or will things remain flat tapering into the long, slow decline?
The Ancient Gaming Noob 
I have no doubt that MoP will boost subscribership. However most of those will be returning players checking out the latest expansion. Not many will stay past the time it takes to consume the new content and get bored again, however long or short that is.
I think you’re right about there being fewer and fewer MMO newbies jumping into WoW. Newcomers are far more likely to jump into a new game, I should think; and one based on a familiar IP, like Star Trek, Star Wars, or D&D. Whether they stay depends on the quality of the game, of course.
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I agree with rowan. I think you will see a sizable bump in WoW’s sub numbers after MoP. As you said, there are fewer and fewer people who are new players. You have either tried WoW, or you have absolutely no interest in trying WoW.
But, there are millions and millions of players (no exaggeration, look at how many they’ve lost) who have played WoW recently and will likely take at least a peek at the new content.
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The title took me. The wakeup of a subscription drop greater than the population of an entire other game is.. alarming.
And while many people are associating this decline with the ‘subscription model’ (which has some truth, surely), dare I say that the true cause is a model that is finally showing its age, and in its age, how ugly the gameplay is?
People pay for quality, or perceived quality (proof: Apple-lovers), so the subscription concept, to me, is deriving the wrong conclusion from the facts unfolding.
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And a bit I forgot to include is that Blizzard basically had its best quarter ever despite the subscription drop. Actually launching a new game now and again has its advantages.
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WoW subs in decline might be the prod Blizzard needs to get on and release Titan sometime in the imaginable future.
Whatever it is. Whenever that might be.
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I completely disagree with the idea that new players aren’t coming in; I think they’re still pouring in more or less as they have been since late TBC.
And, in truth, I think more of them are staying (despite Blizzard’s best efforts with the vehicle mechanics to try and mislead new players into thinking that the game really isn’t a DIKU MMO). But, let’s remember, the new player retention rates are still dismal; I don’t believe it was ever in excess of 30%, and a part of me thinks it was at one time reported at around ~10%.
What I really think is killing sub numbers is two things: in the East, WoW is a competitor, not the king. I’d assume the churn there is exceptional, as people pay for a bit, count as a sub, then leave for one of the myriad of other MMOs and probably stick with one of them rather than WoW; whilst, in the West, I daresay what’s happening is a severe attrition of what I’d describe as one of four groups. There are, from anecdotal experience, three types of players who are still continually subbed to WoW: the hardest of the hardcore who still race for the bosses, the people stuck in Annual Pass subs and/or just in WoW out of habit and, finally, genuinely new players. The fourth group, the one that normally re-inflates sub numbers and experiences constant churn, would be the people who *were* the first or second groups but have now dropped out for whatever reason but occasionally come back.
My belief is that them not coming back, be it for expansions or simply because they want to, is what’s showing this drop, along with the increased competition in the East.
I’d imagine once that Western group is finally driven away permanently, the subs will probably stabilise again.
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Coming to a Blizzard near you, WoW progression servers?
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