So, hey, how about that. Leave the country for just two weeks and look what happens.
Blizzard Q2 2014 Investor Call
The big news, of course, is the fact that WoW has dropped 800k subs and is down to 6.8 million from Q1. MMO-Champion has a rather interesting interactive graph on the linked page, but let’s go ahead and take a screenshot for posterity:
Honestly, it is hard to add anything to that; the graph really speaks for itself. I guess it is interesting to note that we are now well below the numbers of vanilla WoW at this point. It is also interesting to note that the number of subscribers WoW lost in the last few months is larger than the total reported subs for The Elder Scrolls Online. Or Wildstar + EVE. So anytime someone happens to discount WoW as a fluke and/or “not representative of the genre as a whole,” just remember that this is a fluke on scale with the supermassive black hole at the center of the galaxy.
There are bigger games, of course, like League of Legends. There still ain’t any bigger MMOs. And let’s face it: there isn’t likely to ever be any.
Back to that investor call, and the unintentionally hilarious corporate doublespeak:
Starting off with World of Warcraft. The franchise remains healthy with revenues up year-over-year. This is due in part to ongoing interest in Warlords of Draenor presales, which now exceed 1.5 million, and the character boost, which suggests strong support for the expansion by the community.
Yeah, sure, I can see it that way, Mike Morhaime. Someone who purchases a(n additional) character boost is likely a person preparing to use said boosted character in the next expansion. At the same time, is a boosted character not also a vote of no confidence of all the content that it was boosted past? Shit, the expansion is not out for another three months, and this is a report of player behavior from earlier in the year anyway. I’m not one of those guys who cry over planned obsolescence, but c’mon man, this is a sword with two edges. Be careful where you pick it up.
In looking over the rest of the call transcript, most of it had to do with Destiny and Call of Duty questions. Hearthstone was a surprise darling, but we sort of knew that already.
Warloads of Draenor
I pretty much agree with the prevailing blogging opinion that the Warlords trailer is excellent on a technical level and somewhat of a horrible trainwreck on grokkable level. Are we supposed to know who these orcs are? It might be a little racist, but I can barely tell any of them apart. And then you get the confused sympathy going on, which results in you thinking the final boss of the expansion is actually a good guy. I mean, we just saw him kill a demon and everything! To the average person watching this thing, they aren’t going to know that the final scene is meant to imply the “good guys” will soon be invading an alternate timeline in which they don’t exist, only to be pushed back into their own world again and beaten silly by 10 or 25 kleptomaniacs in silly costumes.
And when I put it like that, I still almost feel bad for them.
Then I remember that alternate timelines and time travel in general is literally the worst narrative gimmick in literature (and all mediums, really), possibly tied with “it was all a dream.” It is always total bullshit because nobody ever treats it seriously, least of all the authors themselves. Bioshock Infinite, anyone? Warlords is all just another Metzen Horde masturbation fantasy that plumbs the shockingly shallow depths of the Warcraft RTS plot in search of remaining nuggets (or crumbs thereof) which can be squeezed and bled before the swan song of an Emerald Dream expansion.
In my attempt at researching the possibility that the Warlords narrative could be saved by Naaru somehow, I stumbled upon this blog post which does a good job at asserting the fact that we might be battling high lieutenants of the Burning Legion by the end. Up to and including Sargeras. I like the research supporting that position, but again, it all highlights for me the reason why time travel is stupid everywhere. Because now there is an infinite number Sargerases, and Titans, and McGuffins such that the likelihood of the “original” world existing at all is vanishingly small. Maybe the Bronze Dragonflight are supposed to keep all that shit on lockdown, but all it takes is a single “he/she went insane” and suddenly they are attacking every reality.
…which is sort of how the Burning Legion are described. Hmm.
Nah. The writers over there aren’t that clever.
If you have not already heard the news, WoW has
lost gained 200k subscribers in the last quarter, edging back up to 7.8 million subs. This is quite a reversal from last May, when they hemorrhaged 1.3 million in three months.
In a fit of investigative journalism, I went ahead and looked at the investor report. Here are some choice quotes:
In particular, free-to-play games have achieved scale that should now allow us to realize great returns from the investments that we’ve been making in this area. Over the next few years, we plan to introduce at least three potential groundbreaking franchises operating on our free-to-play transaction systems designed to appeal to players across numerous platforms and in numerous geographies. These games including Hearthstone, Heroes of Warcraft, Blizzard’s Heroes of the Storm and Call of Duty online, all have enormous potential.
Personally, this is the first time I’ve heard about a Call of Duty online, but I confess that I don’t follow CoD news generally. Apparently, it is going to be released in China first, but… actually, I don’t know. Surely there will be mainstream releases of the regular CoD franchise every year (even if they go to a 3-year cycle), so perhaps this will be China-only.
When the call got to Mike Morhaime, there were a series of amusing transcription errors. Like this one:
We should use the strength in Q4 for a few factors. The excitement from BlizzCon, seasonality from the holidays and a refresh of the recruit of final program which offer special test inbound to players to bring revenue into World of Warcraft.
We think that this is a great feature that will make it easier for friends to play together in World of Warcraft. It’s also attractive for veteran players, who have already experienced the level and process multiple times and wants to quickly raise a new character to deal ending combats.
Entry into a special game mode called Arena can also be purchased with Indian gold or real currency.
So when you face your special inbound test, make sure to use real currency instead of Indian gold to deal ending combats.
The rest of the call was uneventful beyond one final item, of particular note to the skeptics of Blizzard’s “stabilization”:
Okay. And the other part of the question was on the East-West split. So, in Q4 we were slightly down in the East and slightly up in the West.
So in other words, a lot of the gain came from NA/EU rather than the people paying pocket change in China.
And that’s basically it. Morhaime mentioned that he’s expecting some weaker numbers in Q1 2014 given how they won’t have the BlizzCon boost anymore nor any new content, but is otherwise hopeful that the level 90 boost will drive some ex-player engagement. It doesn’t do anything in particular for me though, at least right now, but we’ll see.
As reported by MMO-Champion, the subscriber total was 8.3 million at the end of the quarter, a loss of 1.3 million subs since Q4 (which had its own 400k loss). For those keeping track at home, Blizzard had 9.1 million subs back on August 3rd, 2012, during an eight-month lull of zero content at the end of Cataclysm, i.e. pre-Mists of Pandaria. That is a net loss of 800k this expansion – with a 1.5 million sub rollercoaster in the middle – and the lowest subscriber count WoW has had since 2007.
By the way, RIP to MMOData.net, which has not made an update in nearly nine months now. How can we pontificate without graphs? Sigh.
I went and signed up to listen to the investor report as there was not a transcript available, wondering where MMO-Champ got the rest of those bullet points. Plus, you know, Press™:
To save yourself 38 minutes, just trust me when I confirm MMO-Champ got all the relevant information.
What did interest me though was hearing how ultra-conservative Activision Blizzard is. I mean, that sort of thing isn’t a particular trade secret, but when Bobby Kotick explained that the company wasn’t interested in the mobile sphere because the Top 10 titles change every year, I cocked an eyebrow. Call of Duty and WoW still have a lot of viable milking years ahead of them, but this is the same company that gushed about their $1 billion Skylanders franchise that didn’t even exist two years ago. If CoD: Ghost ends up pulling a Warfighter along with the further expected losses (their words) in WoW subs, you can almost imagine a scenario in which they conserve themselves right off a cliff by the end of this year.
But, alas, the money machines continue unabated.
Finally, I sort of chuckled at this part of the WoW presentation:
- There has been less engagement by casual players.
Well… yeah. What did they imagine would happen when you release
one of the most alt-unfriendly expansion in the history of the game? And then proceed to put everything behind a triple-gate of dailies and rep, all but remove leveling dungeons (only to put them back), and then essentially stop all production of 5m dungeons for the rest of the expansion? Oh, and don’t get me started on the continued embarrassment of no-pop servers languishing.
At this point, all I’m really interested in is Hearthstone (as hopefully a cheaper Magic: Online) and maybe Bungie’s new game; Titan has been too much of a cocktease for too long to even get a rise out of me anymore. Otherwise Activision-Blizzard might join the ranks of EA as a big-budget publisher who only produces one title that I am remotely interested in, with all the “risky” indie ventures soaking up the money I leave on the table.
And as Doone points out, that’s probably the best thing for everyone involved.
As MMO-Champion reports, WoW had “more than 9.6 million” subscribers as of December 31st, 2012. This is down at least 400k from what Blizzard reported at the end of Q3 2012. I’m not particularly interested in spin or theories of causes, because as we all know, these sort of losses are rarely attributable to any one thing.
I do find it useful though, to keep the following in mind: the subscriber count was 9.1 million back in August of 2012, pre-pandas. If this is what decline and a descent into irrelevance looks like, then we’re in for a pretty soft landing.
Tobold picked up the story about how Funcom stocks tanked after The Secret World failed to hit arbitrary Metacritic scores. While the post is centered on the legitimacy of review scores to begin with and/or the aggregation thereof, the more salient point was acknowledge but left unexamined.
Let us not bury the actual lede here (emphasis added):
Case in point: The Secret World. It got a “low” metacritic score of 72, causing Funcom’s shares to tank, and the company to announce layoffs. But the metacritic score was just an average of some people absolutely loving the game, and others not being impressed with the unusual setting, progression system, or pure technical performance. The relevant number for a subscription MMORPG is obviously the number of subscribers and the time it manages to hold onto them, not the review score.
So… what are The Secret World subscription numbers? My guess: not good.
Companies are always pretty eager to belt off “250k/500k/1 million subs!” press releases, and as of the time of writing, Funcom has… well, not said much of anything. The launch day press release awkwardly mentions:
“[...] as of now several of the game’s dimensions – which can hold tens of thousands of gamers playing at the same time – have started filling up due to the ever-increasing number of players coming into the game.”
I cannot help but note that “several tens of thousands” is not, say, 100,000. I am not even sure if I can fault Funcom for their hesitant confusion here, as it mentions that over 1.5 million people signed up for the TSW beta. I am no MMO economist, but I imagine a less-than 7% sale rate from people willing to sign up for a beta for your game is a mite unusual.
Then again, isn’t that near the approximate rate of people who buy stuff in F2P games?
But let us dig deeper. According to VGChartz.com, TSW has sold… 0.05m copies. Um, wow. I only recently started using VGChartz though, so maybe they are not all that reliable. How often is it actually updated, anyway?
I dunno, those look legitimate to me. “Nearly 50,000 players worldwide!” is not exactly the sort of MMO (or any game, for that matter) press release that would garner positive attention.
[Edit] As pointed out in the comments, VGChartz almost assuredly only counts physical box sales. The page for Diablo 3, for instance, indicates only 2.6 million sales whereas Blizzard has said 10 million. While good to know for future reference, it is not entirely germane to the point at hand, e.g. Funcom hasn’t belted off a 250k or even 100k subscriber press release. [/Edit]
But at this point, I am almost more interested in what Funcom themselves expected. You can read the press release everyone is quoting for the wrong reasons (e.g. “Metacritic is the devil”) here. Or, you know, let me do all the fun stuff for you (emphasis added):
Funcom has on several occasions presented two financial scenarios for the first 12 months following launch of the game; please refer to page 17 in the 1Q 2012 presentation *). Funcom does not consider it likely that either of them will be met.
To improve sales going forward, Funcom is currently enhancing distribution by launching the game on the Steam platform as well as focusing on key areas for improvement of the game and on-going activities on content updates, sales initiatives and communication. The effect of all these initiatives together with other factors impacting sales are difficult to predict, but based on the available early data, one scenario is that sales for the first 12 months following launch will be less than half of what was presented in the “Conan-like” scenario. It should be noted that the sales amount in the “Conan-like” scenario is significantly higher than for the game “Age of Conan”, due to the assumption of better retention implemented in the scenario. Also it should be noted that the company has significantly lower operational cost for The Secret World than what was the case for Age of Conan. As less initial sales than expected is considered an indicator of impairment, the company is currently evaluating the need for recognizing an impairment loss for the game in the profit and loss statement.
Oh how very meta of them! In order to solve this riddle, I have to navigate to a 3rd party website, download a PDF, and then open their 1Q 2012 presentation to page 17.
And the answer is…
01000010 01100101 01110100 01110111 01100101 01100101 01101110 00100000 00110010 00111000 00110000 01101011 00100000 01100001 01101110 01100100 00100000 00110100 00111001 00110000 01101011
In other words, Funcom anticipated The Secret World getting between 280k and 490k subscribers. That means the “one scenario” mentioned in the press release refers to 140k subscribers… after 12 months. Technically they are referring to sales, but at this point moving even 525,000 boxes seems a tad aggressive; it is “only” a ten-fold increase in sales since launch.
None of this is to suggest that The Secret World is a bad game – lord knows my blogroll is filled with positive posts from across the spectrum. Personally, I never had much interest in the game primarily because the most lauded feature, Investigative quests, represents what I consider to be bad game design elsewhere: the necessity to look up outside information. Morse Code headlights? Fuck that, I’m an American. If your quest items don’t have a giant, deep-fried corndog floating over them, I’ll Alt-Tab my way into a whole different game entirely. Adventure games like Myst have their place (uninstalled in my Steam library), but I am typically more interested in performance-based games than puzzle ones. The former tend to last longer and feature more granularity in its progression.
But, hey, 50,000 people can’t be wrong.
P.S. One of the more surprising things I stumbled across in the Q1 Report was the fact that Age of Conan is apparently still profitable and will continue to be into the foreseeable future. At least, that is what I assume “cash flow positive” translates into. The bad news is that Funcom themselves appear to be hemorrhaging money, even before taking into account TSW lead-up to release.