WoW and the Case for Subscription Numbers

There is only one thing in life worse than being talked about, and that is not being talked about.

-Oscar Wilde

Late last week Activision-Blizzard had their quarterly results conference call and presentation.

ActiBlizz450

This has always been a must-attend for WoW watchers because along with the dry financials and vague statements there were those subscription numbers.  That was always the real “health of the game” indicator, a number of substance, some hard data we could track and chart and argue about.

Then, of course, as part of the Q3 2015 results last year, at which point WoW seemed to be stable at 5.5 million subscribers, it was announced that they would no longer be providing subscription numbers.  Instead all we would get were revenue numbers, hand waving, and their completely fatuous “Monthly Average Users” or “MAUs” metric.

So I was curious as to how the earning call would go this time around, whether there would be some WoW news to go with things or not.  Because, if nothing else, Blizzard seemed to feel compelled to give us some news with every dip in the subscriber count.   I am pretty sure, for example, that we got the WoW Legion announcement early in order to counteract the big drop in subscribers announced that same week.

The whole thing was quite dull, at least if you were looking for any news about World of Warcraft.  There was a general statement about people buying lots of the current charity pet, granting the company a nice tax deduction I am sure.  There was some unsubstantiated statement about growth, but it was so vague that some fan sites put the word in apologetic quotes.  And there was some non-news said in a way to make it sound like news about the WoW Legion expansion.  We knew all of this already.

Blizzard Q4 2015 slide

Blizzard Q4 2015 slide

Seriously, telling people that the expansion was going to release this summer, after the Warcraft movie barely even qualified as a rehash of what we already knew.  It couldn’t release before the movie and be during the summer, since the movie releases on June 10th, ten days before the calendar declares the start of summer in North America.  And the data set contained by the parameters “after the movie release” and “Summer 2016” still extends out until September 21, 2016.  They could launch on that last date and still have told the straight up truth.

I even held off on this post through the weekend, just in case there was something else that Blizzard might want to throw out there.  But there was nothing further about WoW.

And so the earnings call was barely a blip on the WoW news front.  Many sites posted the obligatory “something was said” stories, but when you’re given nothing of substance, the story cannot be sustained.  One mention and sites moved on to other things.

However, if Blizz had given us a subscription number, up, down, or stable, I am sure we would have been bouncing that around for a week or more, discussing what it really means and whether or not this unprecedented for Blizzard alpha access to the expansion was helping to hold things together or not.

But maybe that is the way Blizzard wants things.

For the first five years after World of Warcraft launched, Blizzard was the company that made WoW and used to make some other games.  Then for a few years it was the company that made WoW and was remaking those games it used to make.  And then, finally, in the last couple of years, Blizzard has become the company that made WoW and a couple remakes AND a couple of new games.  Yes, World of Warcraft still brings in most of the revenue.  Without WoW I suspect the name of the company would just be “Activision” at this point.

The company clearly wants to talk about Hearthstone and Overwatch, which was reflected in the questions from the investment analysts on the call.  When question time came, nobody asked about WoW or StarCraft II or Diablo III or even Heroes of the Storm… which on could argue is something of a DOTA legacy remake in any case.  No, the questions, when it came to Blizzard products, were all about Hearthstone and Overwatch, the mobile game… and mobile is the current hawtness still, which even Blizzard seems to recognize… and the cartoon copy of Call of Duty… which is no doubt seen as part of the ongoing effort by Activision to cash in on its first person shooter dominance.

So the lack of WoW emphasis suits their needs.  It wasn’t quite that moment when john Riccitiello said that SWTOR wasn’t their most interesting property as a dodge when asked during an EA earnings call about subscription numbers, but it was clearly a step away from WoW.  The subscription number metric always overshadowed everything else, in part because WoW pretty much pays all the bills and then some, but also because of the assumed direct correlation between number of subscribers and total revenue for the game. (Though, as we can see, revenue is still pretty stable even with the big subscriber drop, so Blizz clearly has its ways of coping on that front.)

I do wonder though if, when the time comes to actually ship WoW Legion and the company actually wants us to focus on WoW again, if anything short of announcing a big jump in subscribers… which will be tough to do when you’ve banished that metric… will suffice.  Because if they think MEUs are something of substance, they are kidding themselves.

Basically, to get back around to the quote at the top, Blizzard has successfully gotten WoW to not be talked about… or at least talked about less outside of some very narrowly focused media outlets.  I wonder if they will end up regretting that some day.

16 thoughts on “WoW and the Case for Subscription Numbers

  1. bhagpuss

    Wouldn’t you say this is now all hanging on the fortunes of the movie? If Warcraft is a major hit that spawns a hotly anticipated sequel or several then WoW the game will be bang slap center of the zeitgeist again. Subscription numbers will skyrocket (and if so you can bet we’ll be hearing about them again) and WoW will be what everyone wants to talk about whenever Blizzard are in the room. Imagine the impact on the game’s fortunes if the movie is a huge global hit AND they carry through that plan of giving away a free copy of the game and a month’s sub with every ticket…

    If the movie does decent business but nothing amazing there will be a blip of attention for WoW and then things will slip back to the new normal as described above. If the movie bombs WoW will continue to drift down towards long-term maintenance mode and outside of the specialist MMO press we’ll barely hear of it ever again. (Even in that worst-case scenario, however, WoW will roll on regardless as one of the biggest, probably still the biggest, Western MMOs I’d guess there are at least a couple of million people who won’t stop playing and paying until their forced off the servers).

    Whatever happens it’s going to be very interesting to watch. A lot more interesting than that conference call would like us to believe.

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  2. kiantremayne

    What happens with the movie is going to be interesting. The trailers look OK, in a generic “big fantasy blockbuster” kind of way, which is exactly what it’ll be to most people. If all the people who ever played WoW buy tickets to see the movie, and nobody else does, it’ll be a flop on the order of John Carter. If loads of people who AREN’T already WoW fans buy tickets… that could get interesting, since Blizzard are apparently looking at giving a free copy of the game away with every ticket. Retain even a fraction of those people and you’re talking a serious upturn in subs.

    Of course, most of those people aren’t going to play PC games at home. This summer would be the perfect time for Blizzard to unveil iOS and Android clients for WoW :)

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  3. Shintar

    If all the people who ever played WoW buy tickets to see the movie, and nobody else does, it’ll be a flop on the order of John Carter.

    Actually, didn’t WoW announce 100 million accounts created years ago? By now it would be even more… if all of those people went to see the film, that would be a pretty decent success I’d say!

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  4. Halycon

    It won’t be a flop if everyone who ever played WoW bought a ticket. It’s a budget of 100million. At the height of WoW 12 million players, lets heavily lowball a lot and say 15 million total have played WoW because it’s a round number. 15,000,000 people * 11 ticket price(price where I live) = 165,000,000. It’ll make up it’s budget with room to spare, and marketing on this movie so far has been low key to say the least so minimal costs there. So a 65% return on investment-ish, it’s not great numbers but it’s not bad numbers either. For a blockbuster film WoW has a stupidly low budget by today’s standards. Ant-Man, was considered a cheap summer movie at 130 million. John Carter on the other hand had a 260 million budget and 280 million box office, add in marketing cost and it lost money.

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  5. splatus

    Blizzard is likely correct to de-emphasize WoW over faster, less sticky games – especially when they can be played on mobile devices. As a company, they made the transition that CCP for example hasn’t been able to make (yet. Valkyrie is still too early to tell).

    As for the WoW movie, one way or the other, its a flash in the pan. The amazing Lord of the Ring movies were arguably a cinema success but didn’t rescue LOTR as a game. The link between the movie and the franchise is extremely tenuous. WoW players will see the movie and stay WoW players. Others will watch the movie and go back to play Candy Crush. Oh, also an Activision product. So its all good :)

    Liked by 1 person

  6. SynCaine

    Halycon with some way-off math! 100m is a rather high budget. Deadpool had a 60m budget for instance. If the movie came out today, and placed in the top 10, it would be the 3rd highest costing movie out, only behind The Revenant (135) and Star Wars (200).

    Second, the studio doesn’t see 100% of a ticket sale. Between distributors, theaters, and other middlemen, there are a lot of in-between’s. Plus a films budget doesn’t include its advertising budget, which can easily be 50% or more of the total (though less if the studio doesn’t really believe in the movie and is already trying to limit costs).

    Based on how poor the trailer looked, I’d be shocked if the movie broke even. I’ve even seen that trailer in 3D, and it’s not great with that either.

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  7. Wilhelm Arcturus Post author

    @splatus – I have worked for companies in the past that have sought to de-emphasize the product that brings in the vast majority of their revenue in hopes of their newer products catching on. I have yet to see that work out well. Without WoW, Blizzard is just another studio working for a company called Activision.

    @SynCaine – Hrmm… for something that aspires to be a summer blockbuster, $100m isn’t all that much. For 2015, as you note, Star Wars: The Force Awakens was $200m. But there was also Spectre at $250m, Jurrasic World at $150m, Furious 7 at $190m, Avengers: Age of Ultron at $279m, Mission Impossible at $150m, and The Hunger Games: Mocking Jay Pt. 2 at $160m. Hell, even the animated Inside Out clocked in at $175m. Of the top 10 highest grossing films released in 2015, only Minions cost less than $100m, ringing in at a mere $75m.

    That said, just spending $100m doesn’t guarantee anything… there are more films from 2015 that spent more than that in 2015 that didn’t do nearly as well… and that trailer looked pretty bland to me as well. There was nothing in it that made me want to go see the movie and I LIKE World of Warcraft. I don’t think it is going to do all that well without something better to recommend it. And if it doesn’t draw non-players, handing out a free copy of the game with every ticket isn’t going to get the game back to 10 million subscribers. WoW Legion could do that, at least for a little while, if they get things right, but the movie seems a dubious proposition.

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  8. splatus

    @Wilhelm. I too worked for companies that could not adapt their product to the changing market. These companies don’t exist anymore. Blizzard can not bank on WoW for all eternity and they are doing the right thing by diversify.

    In addition, lets be honest. WoW didn’t age well. Its graphics and quest systems are 10 years old. The triad of tank/healer/dps is even older. WoW and their copies had their run, there will always be fans but they are simply not fit to be the next generation of blockbuster games.

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  9. SynCaine

    All those movies you listed though are sequels to established, very successful movie franchises. How many original (to movies) IP movies come in with a 100m budget? There are some for sure, but it’s rarer than not, and 100m is still a larger budget regardless.

    I mean I somewhat see the justification (WoW was the biggest thing out for a bit), but they missed the window by a few years. Everyone is watching LoL matches now, not sitting around in Stormwind like back in 2006.

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  10. Wilhelm Arcturus Post author

    @SynCaine – I didn’t know sequels didn’t count seeing as you had Star Wars on your list. Heh.

    If we adjust for inflation I can find a lot of 100m+ original IP movies. But I get what you are saying, for a known quantity going over 100m is no doubt less of a risk. And we agree on the essential element that, in viewing the trailer, I am not all that enthusiastic about the movie, not unless they are going to clone Chris Metzen and have him in every theater to get people stoked up about Azeroth lore.

    @splatus – Aging well is a very subjective line of reasoning in a world where EverQuest is still viable, making money, and getting expansions twice as fast as WoW.

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  11. Brian 'Psychochild' Green

    I think it’s pretty obvious that Blizzard has drastically changed tracks. After years of only putting out Diablo and *craft sequels along with WoW, they’re suddenly going hard and heavy into a lot of other markets. Card games, MOBA, arena shooters, just to name a few new areas. I think the shine has come off of WoW for Blizzard, and they have an eye toward the future.

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  12. kiantremayne

    @Shintar – over 100 million accounts created, but I wonder how many are bots, and gold farming spam bots don’t buy cinema tickets. More importantly, I assume that a good chunk of those are in China where cinema tickets are cheaper, pirate DVDs are rife and the film may not get a release anyway as they only show a limited number of foreign imports per year.

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  13. dachengsgravatar

    “… on June 10th, ten days before the calendar declares the start of summer in North America

    I always have to smile and shake my head at the madness of a calendar that declares that summer starts on Midsummer’s Day.

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  14. Wilhelm Arcturus Post author

    @dachengsgravatar – Maybe some day you will get over the fact the whole world doesn’t follow your local custom (nobody here calls it Midsummer’s Day, for very good reasons) and stop leaving off-topic comments about it every single time it gets mentioned here.

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  15. DoflamingoGT

    The people who watch the movie arent really going to play the game, they are 2 different crowds. I play wow myself but i couldnt care less about the movie

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  16. Pingback: Critics hated ‘Warcraft,’ but it’s more popular than ‘Star Wars’ in China – Life's Journey

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