WoW Subscriptions Drop to 7 Million on Purpose

Last week the Activision-Blizzard earnings announcement indicated that World of Warcraft had dropped from over 10 million subscribers, a position held from November 2014 through at least the end of the year, to 7.1 million subscribers, putting its player base back down to where it stood during the 13 month Pandaria content drought.

Blizzard's slide from the deck

Blizzard’s slide from the deck

That is a tough drop to explain away as “expected and consistent” so soon after Warlords of Draenor and given past history.  The much reviled Cataclysm expansion bottomed out at 9.1 million, while Mists of Pandaria took at least 18 months to hit low ebb at 6.8 million subscribers.  (MMO Champion has a nice chart showing this.) Their might be a seed of something in SynCaine’s hyperbole.

So it seemed like an odd moment for Blizzard to turn around and ban more than 100,000 accounts, unless it was an attempt to get all the bad news in at once.  Only, the bans won’t be reflected in the subscription numbers until the next quarterly report, so that doesn’t really fly.

The first I noticed that something might be up was yesterday morning on Twitter when, in amongst the widespread moaning about the Jem and the Holograms trailer I saw a tweet (since deleted) from somebody enraged that Blizzard had banned a friend’s WoW account for NO REASON.

And then, as the day wore on, we found out that there was likely a reason after all.  The official Blizzard announcement was:

We’ve recently taken action against a large number of World of Warcraft accounts that were found to be using third-party programs that automate gameplay, known as “bots.” We’re committed to providing an equal and fair playing field for everyone in World of Warcraft, and will continue to take action against those found in violation of our Terms of Use. Cheating of any form will not be tolerated.

Blizzard is serious about this sort of thing.  It is ingrained in their corporate culture, forged by their experiences with the original StarCraft, which practically became the national sport in South Korea, that cheats are bad and a threat to their long-term success.  And so they are very aggressive in seeking out any hacks, cheats, or exploits, and have been since day one of WoW. Blizzard’s Warden software has been around a long time.

Of course, there are a lot of “but I was only…” sorts of defense comments out there from the banned.  There is a fine collection of them over at the bottom of the latest post over at The Nosy Gamer, who covers botting and RMT topics regularly.

But we all know it was cheating, both those making the lame rationalizations and those of us reading them.  I ran a poll about six years back where I listed out a bunch of behaviors and let people choose what they felt was cheating.  The results stratified into three groups, with the “we all know they’re cheating” items at the top, the uncomfortable ones in the middle, and the pet peeves at the bottom.  And botting, automation of complex tasks, was right there at the top of the list.

But even if we were going to rationalize and try and kid ourselves that maybe botting some things isn’t so bad, that boring game play somehow legitimizes it, or run off and try to whitewash gold farming to frame it as a good thing, it doesn’t really matter because, as I said above, Blizzard’s corporate culture cannot see it as something besides a bad thing that must be fought.

I used to think the term “corporate culture” was a bullshit phrase.  But that was more because describing corporate culture to somebody is often like trying to describe water to a fish.  It is just there, all pervasive, yet just part of the environment, just the way things are.  Even if you change jobs, moving to another company, it can be hard to really see the full embrace of the culture.  One person just assimilates and learns how things are done.  To really see corporate culture you have to go through a merger or an acquisition and see two different cultures clash.  That is one point when you can really identify what the culture is, when it appears in sharp relief.

At my last company we went through a series of such moves over the course of a decade, and I went from my opinion about corporate culture being bullshit to wondering how some companies survive given how immutable corporate culture can be.  Culture is like a tangible substance.  It can be like mold in your attic, where sometimes it is just easier to tear the house down and start over.

At one point we were acquired by a hardware company that desperately wanted to be a software company.  We went from just shipping a disk or a download to a long and convoluted certification and sales process that looked remarkably like what you would do to sell hardware.  I had a 200-page guide covering everything we needed to do to move software from “we’re done, ship it!” to the point when sales could sell it.  And we couldn’t do a thing about it because they bought us, so their culture “won,” so we had to be a software company that worked like a hardware company, right down to refusing just to sell software unless we installed it on the hardware on which it would run before it left our building.

That quickly strangled sales, until we were acquired again.  This time though it was by a company that was a spin off from the phone company, with all the baggage that implies to anybody who has ever worked for/with any of the one-time Baby Bells.  For somebody from Silicon Valley with a background in start ups, it was almost literally like living in a Dilbert cartoon.

So when I see a company like Nintendo clinging to a hardware based business philosophy while pundits shout that they need to get into selling software, I know what I am seeing is corporate culture… or maybe corporate identity is a better term… at play.  Yes, they have recently made some minor moves in the direction of software only business, but for all they have said, it still strikes me as something to appease stock holders rather than a serious effort to change how the company works.  They still see themselves as a hardware company, measure their success by the number of Wii U or 3DS units sold, and see software as a way to move hardware rather than a revenue stream unto itself.  We’re not going to see core Pokemon RPG games or Mario Kart on iOS or Android.  It will take a near-extinction level event to get there, and while the Wii U has been a serious disappointment, that has been off-set by very healthy 3DS sales, which no doubt reinfoces the idea inside Nintendo that the problem with the Wii U was one of execution and not a call to change business models.

All of which is a very round-about way for me to say that it comes as absolutely no surprise to me at all that Blizzard chose to ban more than 100,000 accounts (and remove the corresponding revenue) right on the heels of announcing that they were down nearly 30% when it came to subscriptions.  Corporate culture will dictate.

13 thoughts on “WoW Subscriptions Drop to 7 Million on Purpose

  1. bhagpuss

    For a minute there I thought, from your headline, that you were going to come out in support of Keen’s position on Blizzard’s long-term plan for WoW. You know, the one where Blizzard is running WoW down on purpose as an aid to Portfolio Diversification, so that the Lost WoW Milions can be “…transitioned into other titles where they will spend more money more often”. That would certainly indicate a unique Corporate Culture…

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  2. Wilhelm Arcturus Post author

    @Bhagpuss – I saw Keen’s article. That isn’t the first time he has gone with that particular flavor of logic, but I cannot get behind it. There is no way the plan at Blizz is “Let’s wreck this billion dollar a year business because it will bet better for our other games!” If nothing else, that goal could be accomplished with a lot less investment in WoW, so the logic doesn’t hold.

    I am more inclined to believe that Blizz is simply feeling the pain of being the market leader, where you are now the big fish to the point that all you can really do in the long term is lose market share. That can make a company crazy in trying to come up with ways to stay on top as opposed to staying in touch with what put them on top in the first place.

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  3. HarbingerZero

    I’m a firm believer as well, watching my wife wade through the corporate world with various companies. I would say many of the times when a company does something that makes your head scratch, its a result of those cultural dynamics asserting themselves. Congregations have the same problem too, succinctly joked about with the phrase “but we’ve never done it that way before.”

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  4. Noizy

    Wow, 100,000? The guy on the Honorbuddy forums was right. This is the biggest ban wave since the Glider days. We’re talking about Runescape numbers now.

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  5. Silverangel

    The graphic says subs are down almost 3 million, but revenue remained “relatively steady”. So they are maximizing revenue per player. The move to ban millions of botters comes on the heels of the launch of WoW tokens. The botters would use the most game resources, while playing for free, and driving down AH prices so other players would buy less tokens because they need less gold? The math is probably there to push this move because of the tokens, so it doesn’t seem odd at all, and this kitty is not connecting the corporate culture dots.

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  6. Stropp

    Don’t forget one important factor when it comes to these bans.

    Most bot accounts are, or are associated with gold sellers, and probably aren’t actually paying a subscription. A lot of these accounts are funded by stolen credit cards which means that the payments made against them are later reversed. It would cost Blizzard more than just the cost of the lost subs in fees and time spent managing the fraud.

    In a lot of ways botters cost Blizzard, or any MMO operator, more than they make in sub fees so it wouldn’t be all that much of a loss to ban them outright regardless of the corporate culture.

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  7. Wilhelm Arcturus Post author

    @Stropp – I might just be in a skeptical mood tonight, but you’re going to have to back that up with something, because I am not buying that most of these are non-paying accounts and/or gold sellers without something to rest the idea on. As they say on Wikipedia:

    [Citation Needed]

    That guy who was saying that Blizz was banning people for AddOns probably put me in that mood.

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  8. Stropp

    Fair enough, I don’t have a citation, but I’m going more on what I’ve read over time from what I remember as reputable sources, especially in the context of credit card fraud being a huge player in the gold market.

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  9. NetherLands

    Frankly it was about time Honorbuddy was finally tackled, ever since it appeared the amount of bot-complaint Threads from PvP’ers was steadily increasing. Same with the Instance-botting in e.g. (the aptly named) Botanica, though the first was most likely more of a turn-off to actual players.
    With PvP already suffering from an increasing amount of issues since esp. 5.2, I assume that one of the reasons they finally (several years down the road) acted against Honorbuddy in-game is that they know they will be churning out less content and so will likely rely more and more on PvP’ers to staunch their subs as they are less voracious for new content.
    While one could have fun pointing out that (if we are to believe e.g. their Threads on the offical forums) Honorbuddy had an unhealthy appeal especially to the more ‘serious’ raiders (”now my Mythic Guild is collapsing!” etc etc.) and this group already is known to have little qualms about e.g. account sharing ‘for the greater good’ (dw, can quote), I do hope Blizz realizes that the other bane of your average, PuG PvP’er are premades in those same PuG BG’s/Arena’s. Watcher’s recent interview and love for the Group Finder in PvP http://venturebeat.com/2015/05/14/dear-world-of-warcraft-players-heres-why-you-should-stay-love-blizzard/view-all/
    makes me doubt that.

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  10. tweell

    To play devil’s advocate, Nintendo just has to look at history to justify themselves staying the way they are. Video game companies that got out of the console business and went software only have all tanked, every one of them. Atari, Coleco, Sega – where are they now?

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  11. Red

    The problem nintendo has is the next game boy is garenteed to flop because the Japanese are adopting smart phones in droves. Nintendo might be better off offering a game orientated smart phone rather than a new game boy.

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  12. Wilhelm Arcturus Post author

    @tweell – The thing is, all of your examples are of companies who basically waited until an extinction level event hit. The argument is that Nintendo should get out of hardware before their very existence is in peril.

    Coleco perished for a number of reasons, including Cabbage Patch dolls not being a long-term sustainable business. Atari has just been a name that somebody owns for a couple decades now, bearing only tenuous links to the company that used to be up the street from me in Sunnyvale. But Sega is actually an example of a company managing to survive their extinction level event, the death of the Dreamcast (which sold more units than the Wii U has) and made their way into software only. Sega is actually doing pretty well right now, even if they seem a little overly reliant of Sonic.

    @Red – That sounds plausible, except that I heard the same arguments when Nintendo launched the 3DS and sales were slow, that wide adoption of smart phones would hold sales down. Then they rolled out the next core Pokemon RPG (X & Y) on the 3DS only and launched the big screen XL model and suddenly sales went through the roof again. Smart phones are already at the saturation rate in Japan, so people will clearly spend $150-200 on hardware to play Pokemon at least in addition to having a smart phone.

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