WoW sub down to 11 million

[Don]

One thing I really don't get is why is Blizzard even announcing this stuff, consider pretty much every MMORPG in existence just choose to not tell you about the bad news. Is it because it's too easy to figure out what their sub number is based on income statement so they need to put a number to hide the fact that it's probably even lower than that? I'm going to assume they're not announcing this because they're stupid.

It's also funny people attribute to this to people being 'bore with the game' or 'the game is old', because at 7 year a million people suddenly decided that the game was old and boring but not any point earlier. Unless there is some kind of mass exodus from the genre in general, the population decline has to be done by competitors. It seems like SWTOR picked a pretty good time to show up, since Rift already proved WoW isn't invinicible (if you assume no genre-wise exodus, the numbers WoW lost probably went to Rift) so it might be able to finish the job, whereas if it came first I don't think it can overcome the 'WoW is invinicible' hurdle. Not saying it'd fail but it wouldn't be in a position to seriously question WoW's supermacy. I looked at the footage for SWTOR and it looks pretty much same as any MMORPG except you get guys with lightsabers instead of swords. However I'll probably buy the game just because you have guys with lightsabers instead of swords, because lightsabers are cool.

[Don]

Actually, is the fact that ActiBlizzard is a publicly traded company means they can't just completely lie about everything related to their revenue model unlike most MMORPGs? But SoE lied about their numbers for a pretty long time...

[Eric]

Where'd you read this?

[Don]

http://www.gamasutra.com/view/news/3635 ... Slowly.php

[Eric]

Har, that's what? 300k less then last time? Hardly numbers of death, but not surprising. You see a high when the expansion comes out, then the numbers dip, it also doesn't surprise me given how difficult the dungeons @ the start of this expansion were.

[Don]

Usually companies just handwave and say the sub numbers are completely unchanging since the beginning of time even though anybody can figure out that numbers probably drop in the middle of an expansion. I'm surprised they even gave out numbers in the first place. They say the drop in the number is more serious than usual. If not the Blizzard guy would just say 'nothing besides the usual cyclical fluctuation!'.

[Shrinweck]

There's more to it than lightsabers instead of swords, but clearly that should be enough.

[Kupek]

Blizzard didn't announce this. They replied honestly to investor questions:

Speaking to Activision Blizzard investors during a Gamasutra-attended conference call Wednesday, Blizzard president Michael Morhaime said that the decline -- now in its second quarter -- is to be expected after the release of a major expansion like December's Cataclysm, saying that "what we have seen is that subscribership tends to be seasonal and driven by content updates."

"So as we're heading further away from an expansion launch, it's normal to see some declines," he continued.

It's not like they sent out a press release with this information. But as a publicly traded company, they're obligated to be honest with their shareholders. I imagine someone specifically asked what the subscription number is, and they really can't get away with saying "Oh, it's about the same." Withholding information from your shareholders is a big deal - I'm not sure what the legal requirements are, but even without those, a rational investor is going to be suspicious if you won't give numbers in response to direct questions.

Even if no one directly asked this question, I imagine the investors expect to hear this number, since it's just as important to Blizzard's finances, as, say, the number of iPads Apple has sold is to theirs. And, again, if the investors don't hear this number, they're going to react.

[Don]

I thought SoE is publicly traded too and I've never heard of anything related to their subscription numbers reported anywhere and I find it hard to believe that not a single shareholder was ever interested in how much EQ or EQ2 or FreeRealms or DCUO makes.

As pointed out this kind of behavior is somewhat cyclical (people show up during a new expansion and then leave after they're bored with it) and I don't recall ever hearing anything that suggests WoW had a decline even though the cyclical changes between expansions would be enough to account for a million or more and that'd certainly qualify as big news, and it'd be something easily noticed on the quarterly income (and there is significant difference in income from MMORPG category on a quarterly basis).

I'm guessing Blizzard usually just covers the cyclical loss with numbers from Asia and especially China since with the way they count a subscription it is probably never ever going down, but now the downturn is significant that you can't just do some creative accounting to cover it. With that said, it still doesn't compare to games that totally got hammered on subs, like various SoE games or Warhammer from EA (which I assume is publicly traded too). Yet I've never see anything that remotely confirms the numbers, and for all we know the population of these game is still a number between 1 and 1 billion. Yes you can say it's kind of obvious Warhammer is being hit hard if it's down to 3 servers but even though you've a game that started with something like 100 servers going down to 3 servers, apparently they never had to say how many people they lost in the process. Every statement related to numbers ends up with something generic like: "Our population is doing great! We are always looking to provide the best experience for out customers!"

Or is Blizzard the only publicly traded company out of MMORPG makers? I find that a bit hard to believe.

[Don]

Let's take FF14. I'm pretty sure SQIX is publicly traded in Japan. FF14 doesn't have a monthly fee, so from a fiancial point of view it has a sub of 0. SQIX obviously ate a huge loss on this, so why aren't shareholders asking how many people are actively playing the game that'd qualify as a sub? That'd certainly be useful to know if there's any hope of turning around or that the game is just heading toward doom. On both relative and absolute scale the loss on FF14 would certainly qualify for top 5 in MMORPG history (relatively it's 100%!). But nobody really knows how many 'subs' FF14 has, and sure maybe you can say that's because no one cares about the game, but presumably the shareholders ought to care, and if this number is available somewhere it will get reported on all the major sites since sub numbers are probably the numbers people are most interested in. I guess you can say since WoW accounts for a very significant (often majority) of ActivisionBlizzard's earning they can't just handwave it, but SQIX lost like 95% of their profit from FF14 too, so you'd think that'd be pretty hard to hide too.

[Kupek]

The other MMOs that were part of publicly traded companies probably haven't had enough subscribers for a long enough time for it to matter to investors - raw sales numbers of the boxes in stores probably told the story. But for Blizzard, 11 million subscribers at $10 a month (I saw numbers from $10-15) is $110 million a year in revenue. That's big-boy revenue, and you need to report it when it changes. Withholding that information would be like Apple refusing to say how many iPads they sold, or for Microsoft to refuse to say how many Windows licenses they sold.

[Don]

SQIX's profit was down something like 95% for the quarter because FF14 failed to bring in any revenue.

If you charge $15/month for an year at 500K, that's like 1.5 million people buying 3 $60 games for the year, and recurring costs for a subscription is probably significantly less than the development cost of 3 new games expected to sell millions. Remember that half of WoW's population pays next to nothing for a sub (China). Any game with a sub measured in hundreds of thousands brings in revenue compared to all but the highest profile AAA titles. It's easy to think of hundreds of thousands as 'not much' because WoW has '12 million' but it's certainly not chump change. WoW often accounts for half of ActivisionBlizzard's revenue, and this is a company that owns many high profile franchises. If you got a game that sells for $60 at 1 million copies, and break that up to $15/month over 5 years you only need 66K subscribers over that period of time. Obviously this is a gross simplifcation but MMORPG are extremely profitable and it's really hard for me to imagine why shareholders would not care about their outcome.

I don't really have a suggestion as to why Blizzard is the only company we even have dubious numbers for subscription (no one else even goes as far to release dubious numbers in the first place). Of course the company would like to hide this stuff if possible, but MMORPGs are big money now and there are plenty of titles with AAA expectations. DCUO has a budget of $50 million for example, and I don't see how you can just say shareholders will forget about the $50 million needed to make a high profile title. Of course the company can deny all they want, but at some point you'd think shareholders want to see some concrete number over stuff that cost tens of millions to produce.

Maybe the industry just has a very low accountability standard. After all the best guess we have for subs online is about as accurate as you or I making up some random numbers they heard from someone's cousin who worked for something else.

[Don]