Tag Archives: WotLK Classic

Blizzard Gets a Boost in Q2 2022 from Diablo Immortal

It is time once again for the Activision Blizzard quarterly financials and once again they are playing the “we’re being acquired so we don’t have to answer questions” card, just dropping the numbers on the investor relations site and calling it a day.

Activision Blizzard

Whatever.  Bobby Kotick is going to get even richer out of this.  There is no justice, but we were already pretty sure of that.

The overall company reported revenue of $1.64 billion, down from the $1.77 billion earned in Q1 2022, and even further down from the $2.3 billion a year ago in Q2 2021, but this time around it wasn’t Blizzard dragging down the team… not as much as last quarter at least.

Blizzard revenue in Q2 2022 was $401 million.

For once of late that was an uptick, as Blizz brought in just $274 million in Q1 2022.

Still, that was down from $419 million in Q4 2021, the $493 million posted in Q3 2021, the $433 posted in Q2 2021, and the $483 million posted in Q1 2021.

As for news about Blizzard, which is the only part of the company that I can be bothered to care about, the report had this to say:

The June launch of Diablo Immortal™, a deep and authentic Diablo experience designed for the mobile platform, marked the start of a rollout of substantial content across Blizzard’s key franchises. Diablo Immortal received high player ratings on mobile app stores around the world, and reached the top of the game download charts in more than 100 countries and regions following its launch. Over half of the game’s player accounts to date are new to Blizzard. The game ranked in the top-10 grossing games in U.S. app stores for the month of June.

Diablo IV, the next-generation installment in the genre-defining series, is planned for launch on PC and console in 2023. The title will support cross-play and cross-progression across platforms, and is designed to be the foundation for an engaging live service, providing ongoing storytelling and new content for many years to come.

In the Warcraft franchise, Blizzard plans to deliver an unprecedented level of WoW content in the coming months, with Wrath of the Lich King Classic launching on September 26 and World of Warcraft: Dragonflight, the innovative next expansion for the modern game, slated for release later in the year. Blizzard is committed to growing its development resources to meet and exceed its community’s expectations, and at the end of the second quarter significantly bolstered its World of Warcraft team through the acquisition of Boston-based studio Proletariat.

During the second quarter, Blizzard unveiled Warcraft: Arclight Rumble™, an action-packed mobile strategy game that gives both new and existing fans an entirely different way to experience the Warcraft universe. Public testing of the game is underway in select regions.

Overwatch 2 is planned to launch in early access on PC and console on October 4. With a free-to-play live service model designed to provide frequent and substantial seasonal updates, this launch kicks off the next chapter for the acclaimed team-based action game.

Blizzard’s second quarter segment revenue and operating income were lower year-over-year but higher versus the first quarter. World of Warcraft net bookings declined versus a year-ago quarter that included the launch of Burning Crusade™ Classic, offsetting year-over-year growth for Hearthstone® and the contribution from the June launch of Diablo Immortal.

The one other thing that Diablo Immortal did was revive the long sinking Monthly Active Users number, the BS metric that Blizzard pulled out when reporting WoW subscribers became a litany of woe.  But they couldn’t even keep that metric up, and it has been in a steady decline since 2018, as noted over at Massively OP.   But Q2 2022 saw the MAU finally rise to 27 million, up from the 22 million in Q1, the nadir of the MAU reporting.

So Blizz has had some luck with Diablo Immortal, but they really need a strong Q3 with Overwatch 2 and Wrath of the Lich King Classic as well as a big Q4 with the WoW Dragonflight expansion to get back on track.

Related:

Blizzard Declines Hard in Q1 2022 While Diablo Immortal Finally Gets a Launch Date

Activision Blizzard pushed out their Q1 2022 financials at 7:30am Eastern Time yesterday which, while it isn’t the Friday at 4pm routine, still strikes me as an hour suited to attracting less attention or getting bad news out of the way quickly.  And Elon Musk promptly buried that news by buying Twitter.  So there you go.

The date was a bit earlier than I expected as well, the pattern generally being that one gets the announcement in the first week of the second month of the quarter.  But I guess if you aren’t going to do anything fancy you can get things out more quickly.

And Activision Blizzard isn’t doing anything fancy because of the Microsoft acquisition.  They don’t have to impress analysts with a cool slide deck or an engaging conference call or throw out a buzzword salad because Microsoft has said they are going to pay $95 a share when the deal closes, which puts a pretty hard ceiling on the share price.

Of course, Activision Blizzard also has to not screw things up between now and when the deal closes because I am sure the contract for the acquisition is miles long and contains many provisions where by Microsoft can pay less or walk away if Bobby Kotick and company degrade the value of the company in any substantial way… or more so than they have already in any case.

This is the part where I tell you that they aren’t doing very well on that front at the moment.

The overall company reported revenue of $1.77 billion, down from $2.28 billion a year ago in Q1 2021 as both the Activision and Blizzard portions of the company slipped hard so far in 2022.

King, however, was up.  Candy Crush Saga abides while Call of Duty and World of Warcraft fall.

I am only really interested in the Blizzard corner of the business, so how badly did they tank in Irvine?

Blizzard revenue in Q1 2022 was $274 million.

For comparison, Blizz brought in $419 million in Q4 2021, which itself was down noticeably from the $493 million posted in Q3.  That was also off from the $433 posted in Q2 and the $483 million posted in Q1.

The holiday season was off for Blizz because they had nothing new to sell, but the new year was brutal, as even the low point of 2021 looks pretty sweet when compared to how 2022 is breaking for the division.

To go along with that, the Blizzard Monthly Active User count went down another 2 million users in Q1 2022.  Over at Massively OP they have been tracking the user count decline, which went from 38 million users in Q1 2018 to just 22 million users in Q1 2022.  Even during the peak COVID lockdown Blizzard’s user numbers were flat.  Now we’re closing in on losing half of their user count in four years.

So not happy times down in Irvine.

What did they have to say about it?  It was the usual hand waving about the product cycle of World of Warcraft and promises of better things to come.

Blizzard’s first quarter financial results were lower year-over-year, primarily reflecting product cycle timing for the Warcraft® franchise. Blizzard’s teams reached important milestones across its key franchises in recent months, and the second quarter represents the start of a period of planned substantial releases across Blizzard’s portfolio.

Blizzard continues to work on numerous new experiences to delight and expand the Warcraft community. The newest Hearthstone® expansion, Voyage to the Sunken City™, launched on April 12. Blizzard’s teams are working on major new content for World of Warcraft® including World of Warcraft: Dragonflight, the innovative upcoming expansion for the modern game, and World of Warcraft: Wrath of the Lich King® Classic. Blizzard is also planning to unveil more details about its first Warcraft mobile experience in the coming weeks.

Diablo® Immortal™ will launch on June 2, 2022 in most regions around the world, with the remaining regions in Asia-Pacific gaining access a few weeks later. Over 30 million people have already pre-registered for the game. In addition to offering a deep, authentic, and free-to-play Diablo experience on the mobile platform, Diablo Immortal will also be available free-to-play on Windows® PC, initially as an open beta starting on June 2, 2022, and will support cross-play and cross-progression.

Development on Diablo 4 and Overwatch® 2 is also progressing well. Company-wide internal testing of Diablo 4 is underway, and external testing of the player-versus-player mode of Overwatch 2 begins tomorrow, April 26, 2022.

This is a reminder, once again, as to how important World of Warcraft is to the company and its bottom line.  Nothing delivers as much revenue as reliably as WoW, so the company is chained to it.  They can never walk away from WoW as it keeps the lights on and the paychecks flowing while the company farts around trying to create a new cash spigot from one of its other franchises.

So the forward looking good news was about WoW Dragonflight and Wrath of the Lich King Classic and the recent Hearthstone expansion and some empty milestones related to the Diablo and Overwatch franchises that won’t be anywhere close to launch in 2022.  I think they would have pre-orders open if they had any confidence in a 2022 release.  Remember how far in advance Shadowlands pre-orders started?

The one release with a hard date, the one new thing that Blizzard has lined up to sell in 2022, is Diablo Immortal.

I have been more than a bit dismissive of Diablo Immortal since it was announced at BlizzCon 2018, referring to it as Candy Crush Diablo at the time.  But it was primarily the tone deaf aspect of the announcement… gather all your PC and console fans in a big room and tell them you’re launching a mobile game… that struck me.  How do you get that so wrong?  The phrase “Don’t you guys have phones?” will live on for a decade or more due to that event.

And, the other thing I have harped on about Diablo Immortal was its long development time.  They had a playable demo version at BlizzCon 2018.  Here we are in 2022 and we’re just now getting a release date.  Diablo Immortal will finally launch on June 2, 2022.  How does this take so long?

As it turns out, Blizzard seemed to get it that their core player base was not on mobile, so they ported Diablo Immortal so we could play it on PC as well.

That is actually a pretty impressive demonstration of the company actually trying to listen and respond to user feedback.

I am not sure I would have delayed the mobile release for too long, and technically PC users are only getting access to the open beta of Diablo Immortal on PC on June 2nd, but getting it at all on PC was completely unexpected for me.  (System requirements for phone and PC are up now.)

Pretty exciting stuff in that.  But is it enough?

I am going to guess that the Diablo Immortal release date, with PC only in open beta, is primarily in place to shore up expected ongoing declining numbers for Blizzard.  They need people to get in and spend on that cash shop.

After that, though, 2022 is looking light.  Wrath of the Lich King Classic could easily be a Q3 2022 launch, which would carry the company another quarter, but I am not really feeling like WoW Dragonflight is going to make Q4 2022, which would make for another light holiday season.  And, as I noted above, WoW is what makes or breaks Blizzard.  They need players subscribed.

There we go.

I will say that at least Activision Blizzard knows how to mitigate bad news.  They hit us with the bad news in the earnings announcement, then turned around and gave us the Diablo Immortal announcement with the good news about it being available on PC.  Going through the gaming news headlines, there are bland entries about financials and excited ones about the ship date, PC compatibility, cross platform play, and all of that.  Diablo Immortal on PC will dominate the news cycle compared to the financials.

They did not, pulling a random example out of the air, give us a bunch of bad news on a Friday afternoon and then opt to let it fester for two weeks with a vague promise of good news to come.

You may not like Activision Blizzard, but they know what they are doing in many regards… though that is sometimes the problem as well.

Related:

Where Does WoW Classic End?

Just last week we launched into The Burning Crusade in Blizzard’s WoW Classic experiment.  We will likely spend close to two years playing that.  Maybe less.  The thing about doing a retro server is that everybody who doesn’t already know the dance steps can find them online, so a lot of people move at a much quicker pace.  I’ve already gone from “Hey, that’s the first level 70 I’ve seen!” to seeing them all over.

Still only level 60 still as I head to Hellfire Peninsula

After Outland I fully expect that we will move into Wrath of the Lich King Classic, just to finish off what I will call The Classic Trilogy.  That probably gets us out into 2024.

But then what?

I would argue that “classic” ends with WotLK and that Cataclysm, though it is more than a decade in the past at this point, marks the “modern” era of World of Warcraft.  And while there are descisions to be made about WotLK… it was during that era we got Dungeon Finder and achievements, both of which remain of debated value… Cataclysm really represents a leap.

Which isn’t to necessarily say that Blizzard couldn’t or shouldn’t roll the classic train on into Cataclysm, but it does represent some issues.

First off, unlike EverQuest, which is ever the model for these sorts of plans, and all the more so since Holly Longdale is driving the WoW Classic team at Blizz, Cataclysm went back and changed old content.  This differs from the EverQuest model where they just piled on new content by adding zones and maybe adding an NPC here or a teleporter there to the past world.  Cataclysm represents the destruction of vanilla WoW yet again and a lot of the push behind the whole WoW Classic experience was from people, myself included, who were somewhere between annoyed and filled with white hot rage that Blizz did this.

Does Blizzard want to re-ignite those memories of betrayal?  And, probably more importantly, is there demand for a fresh start for Cataclysm?  If there is enough money on the table, I have no doubt that Blizzard will try to claim it.

And I have softened a bit on Cataclysm over the years.  Some of the content was good.  The instances were all interesting.  But none of that has changed over the years and when Blizz already has the post-level squish, fully scaling, parallel paths experience available, do they bother rolling to Cata?

The Shadowlands level squish parallel experience

I suspect there would be demand for a fresh start for any expansion with a rush of people all together and all the content to re-explore.  But the hitch for Blizz is that it isn’t as easy as it is for EverQuest.  Over at Daybreak these sorts of things are done on one or maybe two servers at a time.  It is easy to handle and contain.  WoW Classic went live with more than 150 servers.  And then they had to add some more when Burning Crusade Classic hit and they had to split out the people who wanted to stay in the land of vanilla.

So it isn’t a trivial exercise moving forward.  And they have to make the decision about whether or not to move everybody forward.  I suspect that there is a faction at Blizz that believes you progress or you die off, that this classic ride ends with a whole bunch of people at whatever post-Shadowlands expansion they’re at  when and if they catch up.

I expect, however, there will be a loud group in the community that won’t want to go past WotLK.  Will Blizz off another era split?  Will they offer one for Burning Crusade Classic as well?  Will the classic experiment require Blizz to create a whole pantheon of expansion locked, never to progress, special snowflake servers?

I know that seems ideal to some, but I suspect that it won’t be as nice as it sounds, that some expansions will be more favored than others, that the overhead will be large and confusing, and that Blizz will need to make transfer/clone forward options available all the way along at a price lower than even $15. (Also, how many versions of WoWHead and Icy Veins will we need?  One for each expansion?)

But the flip side of all of that is what do they do if they just stop at WotLK, that “classic” really is just the first three seasons of the game and everything after Cataclysm is ignored?  I suspect that Blizz just re-rolls WoW Classic again and launches into that hype again.  It will have been at least five years since the first rush to old Azeroth, and the EverQuest team has demonstrated that nostalgia is an evergreen source of money.

Will it be another 150+ server event that has a big impact on the company financials?  I don’t know.  I suspect that it won’t be that popular, but the draw of WoW is not to be discounted.  And what happens with the previous classic servers if this hits?

Those are a few options and I am sure I could come up with more.  Blizzard has time to think about this.  As I noted above, I expect that WotLK Classic is a given and that we’re at least 18 months away from that being a thing.  But at some point they’re going to have to make a call on direction and plans.  I am already curious as to where they will go.

Where do you think the classic experience is heading?