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Blizzard’s Q4 2013 Report

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.

…and…

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.

…and…

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.

Good Guy SOE

So, I find myself playing PlanetSide 2 again. Yes, I had stopped for good. Probably more than once. I might be what they call an “unreliable narrator.”

What brought me back into the fold (for the time being) were forum tears. Specifically, I saw a veritable rash of QQ posts on Reddit concerning how overpowered A2A missiles are, how unfair it is that skilled pilots (presumably packing lolpods) are being blown out of the sky by noobs, and so on. So I did what every rational gamer would do in such a situation: log on and run the flavor-of-the-month gravy-train all the way to cheeseville.

Let the hate flow through you.

Let the hate flow through you.

11 kills in 43 minutes may not sound like anything – and it’s not – but they were 100% other players in jets, which I can assure you is a feat I have never remotely came close to before. Indeed, the time was inflated a bit because I had to go in search of more jets, having destroyed the gate-camping ecosystem I was hunting in.

In the meantime, there was another controversy brewing on the Reddit forums in the form of John Smedley changing the way subscriptions work at SOE. Currently, you can subscribe to Ps2 for $15/month, receive some membership perks, and then receive a monthly stipend of 500 Station Cash (SC). As Wilhelm has detailed previously, SOE has had a ton of issues with people hoarding currency from triple SC sales, to the point where they had to stop letting you redeem SC for expansions, subscriptions, etc. For the less economic-minded, the problem with SC hoarding is that SOE can’t actually count the cash you used to purchase SC as revenue until you redeem it; until you do, the SC technically counts as a liability. Indeed, since the introduction of Player Studio items, SOE faces the additional uncertainty of having to potentially pay out an unbounded amount of cash to players once per quarter, depending on how many people redeem their SC for those items. We aren’t talking about virtual money for virtual items anymore, we’re talking cash payments to player artists.

If that still sounds confusing, an example I’ve heard is this: imagine what would happen if 100% of EVE’s playerbase used PLEX for their subscription next month. Sure, CCP technically already has the money, but they are unlikely to have enough cash on hand to cover a full month’s worth of payroll, server costs, etc, with nothing coming in that month. Companies do end up estimating “breakage” (e.g. gift cards that are never redeemed and the like) but they can’t claim all of it without running afoul accounting principals.

The first solution Smed presented was interesting. Instead of a 500 SC stipend that simply accumulates, they would allow you to purchase one item a month that costs up to 2000 SC. A voucher, if you will. The primary issue under that scheme is that there is next to nothing in the Ps2 store that costs 2000 SC aside from the ocassional bundle, which you cannot even buy with it. Most player-created items – which, incidentally, are so much cooler than SOE-designed items that its sickening at this point – cost 1000 SC apiece, so ostensibly you would be coming out ahead under this rubric… but Player Studio items were also excluded. Even if Player Studio items were allowed, the creators would see zero reimbursement since the 2000 SC voucher was “free” – Smed stated in the thread that SOE was seriously considering eating the cost and paying the item creators anyway.

If you weren’t interested in fancy hats and cosmetic items though, you were going to be boned as a Ps2 player under this system. One of the perks of subscribing to Ps2 was getting access to a 2nd Deal of the Day, and said deals frequently put items at price points below 500 SC. Indeed, there were two items last week that were selling for 99 SC. If I wanted both, I could either spend an extra dollar and use the 2000 SC purchase on the other, or I could get both with the 500 SC stipend and have some virtual change left over for next month. And on the other end of the spectrum, if you have been playing for a while, there isn’t liable to be anything you want to buy in the store in a given month – especially since the devs decided to take their content-free optimization break. Each month you didn’t purchase anything as a Ps2 player was 500 SC you weren’t ever getting back.

After going back and forth across a 200+ response Reddit thread, Smed dropped some interesting information. The plan going forward for SOE is for the All Access Pass to be lowered to $14.99/month and to automatically apply to all SOE games (on the PC, for now). In other words, one subscription to rule them all. It sounds a bit weird at first, given how many of the games SOE offers are F2P to begin with. But that sort of makes it subtly brilliant: the fact you are receiving “premium” bonuses for games like DCUO might make you more inclined to download the client and take advantage of them. But what if I don’t care about DCUO or EQ1/2 in the least? Hmm. Maybe you have heard of EverQuest Next: Landmark & EQN proper?

The plot… it thickens.

As for the stipend, Smed will be bringing up a compromise to the suits: subscribers will get the 500 SC like usual, but you have to log on each month to claim it. While it seems silly that that solves anything, I wouldn’t be surprised that there are a non-zero amount of people that have auto-renew subscriptions and do nothing with them. After all, that’s kind of the point of auto-renew subscriptions as a business model. For every heavy Netflix user, there is someone like me who has booted it up for about two months out of the entire last year.

In any case, mad props to John Smedley for coming to Reddit of all places and laying down the behind-the-scenes facts. There are some people who are not happy with the way things shook out (the 2000 SC voucher sounded better to them), but no one can deny the fact that SOE climbed down the mountain and took the feedback of its players seriously. If you were going through Ghostcrawler withdraw like I am, look no further than… the PlanetSide 2 Reddit forums, apparently.

Ouch. WoW down another 1.3 million

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™:

Nothing could go wrong with this.

Nothing could go wrong with this.

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.

Unsubscribing, Take Two

I may have reached the end of my second run of WoW.

As was the case last time, there was no clear death knell, no final straw, no slap in the proverbial face. Forensic evidence would probably suggest that my decline in activity can be traced back to the 5.2 announcement. At that point, I stopped bothering with LFR, knowing that I could endure the same long queues for 20+ better ilevel gear in a few weeks. I was also pretty much geared in all 483s anyway, much to the chagrin of my less fortunate guild survivors.

5.2 reinvigorated several things for me, including reaching some of the reputation milestones on alts that I would have dismissed out of hand as ridiculous previously. There were some underlying truths about myself I started to realize however:

  • A healthy variety of dailies is 100% meaningless. Blizzard seems to think that 15 dailies out of a pool of 90 is somehow more palatable than the same 15 over and over. But… dailies are dailies. Unless a certain daily quest is particularly odious, such as having to kill a hard elite solo (the Pyrestar Demolisher), all daily quests blur together into a gray slurry of virtual obligation.
  • Between the lack of interesting Black Market Auction House wares (which has admittedly improved in 5.2) and the BoP-crafting material economy, it is difficult to maintain interest in even lucrative AH shenanigans. As I continued canceling and re-listing cut gems and other goods day in and day out, I asked myself what exactly I imagine myself doing with this almost 400k gold. Buy something… but buy what? The lack of 476+ BoE weapons particularly was annoying. Yes, I could run LFR a bunch of times or even Honor farm, but all this gold was supposed to save me time, at least theoretically. If time = money, then money = time, does it not?
  • I continued playing long after I no longer experienced any fun because of the possibility that things might change in the future. Which is quite a bizarre feat of circular reasoning, if you think about it. I have 76 pieces of Imperial Silk, for example, because if I suddenly developed a resurgence in interest, my future self would have more fun with all these accumulated mats (which you cannot really get any other way). It reminded me of how I behaved in my Middle School history course: the teacher handed out a week’s worth of worksheets on Monday, and I always completed them that very evening so I could slack off the rest of the week.
  • The Legendary quest backfired big time, at least for me. By the time 5.2 came out, I had 2 Sigils of Power and 14 Sigils of Wisdom. With an average ilevel of 491, I was faced with the prospect of slogging through half a dozen or more DPS queues for the starter LFR raids, getting 476 vendor trash… if I was lucky! And then what? 6000 Valor? The questline might not have been “required” for anything I was doing, but it certainly felt more in-your-face “you are falling behind” than I ever felt before about, say, a raid-only reputation or heroic valor gear, by the very virtue of its accessibility.
  • Once I got over the initial trepidation of skipping a day’s worth of cooldowns and AH re-listings, it actually became more difficult to convince myself to log back on at all. I had already “lost a day” that I would never get back. So… why bother? I skipped logging in one Saturday, and suddenly half the week is gone with nary a fuck given.

As with the last time I unsubscribed, I do not begrudge Blizzard and crew anything in particular. Well, maybe for the shit-hole of a no-pop server that they continue to allow to exist, to the detriment of all the lost souls trapped in Auchindoun-US’s hellish purgatory. But beyond that, most everything else I see as an improvement over prior design. Heroic scenarios sound like a great feature, and would have been custom-made for the 2-3 of my friends that actually managed to log on these past few weeks. Similarly, I am/was looking forward to being able to choose which spec to gear up in LFR, regardless of current role.

But… well. I could quite literally be playing any one of a hundred other videogames right now; games already purchased and with no subscription fee. More than the money though, I am looking forward to having the mental space back. It’s… liberating, in a way that cannot be described to someone whom has not had that same sort of mental real estate spoken for and suddenly vacated.

The Wages of F2P

I finally buckled-down and purchased a 3-month subscription to PlanetSide 2 last night. I say “finally” because I had been waffling back and forth for quite some time on the decision, all of which has resulted in me losing out on +35% XP gains (which translates into faster Cert gains, which translates into character/weapon upgrades) for the duration of the indecision. I have been playing this game 1-2 hours a day for the past several months, so it is not a trivial amount of potential lost progress.

One machine I don't mind being a cog in.

One machine I don’t mind being a cog in.

But still, even with credit card in hand, I felt like I was getting suckered. Since Steam, I never pay full price for anything. And this is a F2P game, right? I know things are designed to part me from my cash. I could technically get everything (non-cosmetic) from gameplay, so why purchase anything? Or, you know, bide my time until the next double/triple Station Cash sale at least.

But… you guys have no idea how much fun I’ve been having with, say, that underbarrel grenade launcher. Or rocket pods on the jets. At what point does it become silly to intentionally have less fun for a long duration for a reward at the end, versus spending that same amount of time having fun with the reward?

Actually, the former sounds like… erhm… daily quests.

By the way, this means, to date, I have spent ~$85 (x3 SC cards, 3 month sub) on a F2P game. Mission fucking Accomplished, SOE.

The Number of Subs Goes Up and Down, Up and Down

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.

Into the Breach

It has technically been four days since I started playing WoW again.

Awakening at my favorite spot after 1.5+ years.

Awakening at my favorite spot after 1.5+ years.

I say “technically” as the first two sessions were 1-2 hours long and essentially involved me downloading and configuring over a dozen addons because Blizzard’s UI options are atrocious. It has been more than a year since I last played, and I understand that a lot of my ire would not exist had I been playing continuously this whole time. But that is exactly my point. To someone just coming back into WoW from a long absence, the returning user experience is pretty bad. Not quite PlanetSide 2 starting experience bad, but close.

My first issue was with the UI scale. When I looked at my old WoW screenshots, it looks like I was running around in 1280×960 resolution, which was fine at the time. Now that I have a 24″ monitor that nags me for being in anything less than 1920×1080, within five minutes I started developing neck pain from having to look to the far corners of the screen to squint at quest text. My initial scan of the options left me with the impression that no scaling UI option existed, so I ended up spending most of Tuesday mucking around with the impenetrable MoveAnything addon and reconfiguring by hand. Eventually, I wised up and Googled my way to the UI Scale slider, but this was way after any rational person would have given up.

Something has gone terribly wrong.

Something has gone terribly wrong.

After two days of screwing around, I did approximately six of the new Pandaria quests before I simply logged off. Unlike a lot of GW2 ex-pats, the clunkiness I experienced with, say, the combat had nothing to do with standing still and trading blows – it was with much simpler things. For example, I kept trying to press E to interact with NPCs or loot bodies. Nope, I have that key bound to Crusader Strike (or whatever primary attack I have for the class/spec I’m playing) because, you know, solely clicking on shit with the mouse never went out of style. And can a brother move a goddamn window please? Maybe I want my quest text a little more to the center of the screen. You never know how much you can miss simply moving shit around until it’s gone.

There were some things I appreciated though. When it came time to assign talent points, I did not feel the immediate need to look builds up on ElitistJerks. In fact, it was the first time in years where the entire talent selection process felt… pleasant. “Huh. I’ll probably use this one more than that one. Oh, this one looks fun… I’ll take it.” The glyph system felt similarly serine, although that was mainly because there did not appear to be any actual useful glyphs for Retribution.

Which reminds me: designers, stop being idiotic by ignoring opportunity costs. I can understand the rationale of changing the glyph system to be different than simply +5% DPS options; the Enchanting and Gemming system already has you well covered there. But why would you give people 20+ glyphs with upsides balanced with downsides for three limited slots? If you ask me to choose between X and Y, the downside to X is losing the chance to pick Y. If Y is so bad no one would ever choose it, yeah, maybe it looks like X has no downside… but that’s the designer’s fault for screwing up Y. As it stands, my paladin glyph choices were made based on which ones I could take that inconvenienced me the least. If I felt more comfortable having empty glyph slots, I would have left them that way.

Anyway, some other things I appreciated were the “What Has Changed” tab and the rotation guide thing. The spellbook being divided into spec-specific abilities was helpful, even though it baffles me why Retribution is so limited ability-wise. The Dungeon Journal interface is incredibly slick, and this was the first time I ever looked at it, believe it or not.

Whoever finally convinced the devs to do this deserves a raise.

Whoever finally convinced the devs to do this deserves a raise.

When one of my (ex-former?) guildmates was showing off some of the new pets though, trying to bring out one of my own felt like opening one of those trick cans that shoot the snake and confetti out. “Oh, right, the Pet Battle thing.” It looked pretty overwhelming, to be honest, but I like the way it was set up graphically (I haven’t actually battled anything yet).

I am going to stick with WoW for now because playing games I don’t immediately like until I do (or until the cognitive dissonance kicks in) is my M.O. around here, but I just want to say: good lord, my first impression was bad. If there was ever a moment that I doubted WoW’s longevity was primarily due to social inertia, it has finally past today. It isn’t about the graphics or combat mechanics being old, it’s about downloading a bunch of 3rd-party tweaks just to make the game somewhat playable¹. Which is completely ridiculous if you think about it. If I were a normal person trying to come back again, I would have uninstalled within the first half hour.

But (un)luckily for you, I’m not, I didn’t, and god have mercy on my soul free time.

¹ “Playable” being a term relative to the other games one is playing, of course.

Overboard

I am officially back in action, having successfully moved all my shit across town and (more importantly) getting the internet hooked up at the new place. During the transition, I took the opportunity to indulge in my baser whims, and ended up purchasing the Playstation 3, a very decent TV to play it on, and… games. All of the games.

  • Demon Souls
  • Journey Collector’s Edition (Journey, Flower, flOw)
  • Final Fantasy XIII
  • Heavy Rain
  • Catherine
  • Metal Gear Solid 4
  • ICO & Shadow of the Colossus bundle
  • Red Dead Redemption: Game of the Year Edition
  • Valkyria Chronicles
  • Uncharted 1 & 2 (came with PS3)
  • Infamous 1 & 2 (came with PS3)
  • Bayonetta

In fact, I might have gone a bit overboard, even though all of them were less than $20 apiece.

Scratch that, I know I have gone overboard, because this also happened:

Well... I... but... MoP was $20 so I thought... sigh

Well… I… but… MoP was $20 so I thought… sigh

The funny thing is that I have so much choice at the moment, that I have chosen not to play anything just yet. The only game I have booted up in the last 48 hours has been XCOM (it was $28 at GMG over the holiday), and that was just because it was one of the few Steam titles that I could play in Offline Mode. I only played XCOM until the end of the tutorial (difficulty Normal Ironman), but so far it has piqued my interest. Then again, I should also probably get back on the WoW train if for no other reason than to actually use the last few remaining free days. And then there is some PlanetSide 2 things I want to talk about. Nevermind the fact that I should probably finish hooking up my PS3 and pop at least one disc in the tray…

So, yeah. Overboard.

Since I am already in for a penny, might as well get all the pounds: if there is some PS3/console exclusive title that I should be on the lookout for come Xmas sale time, let me know in the comments. For example, I almost overlooked Bayonetta until I saw it on eBay last night.

Where Are All the Bodies?

WoW subscriber losses since Q1 2011: 2,900,000.
SWTOR subscriber losses since Q1 2012: ~700,001.
Aion subscriber losses since 2011: ~600,000¹.
RIFT subscriber losses since 2011: 350,000¹.
LoTRO subscriber losses since 2011: 300,000¹.
EVE subscriber losses since Q2 2011: ~20,000¹.

Where are all the bodies?

Talk about fiscal cliffs…

It is seductively easy to imagine the MMO landscape as a zero-sum, closed universe. One developer’s bone-headed design mistake is another MMO’s gain. “Guild Wars 2 is going to nail the coffin shut on SWTOR/steal another million from WoW.” But it is fact that there are less people playing “traditional” MMOs today than there were in mid-2009. And there were fewer game options back then!

The graph up there is somewhat misleading in two ways. It does not represent the entire MMO market (browser-based games, etc), so it is entirely possible that in the journalistic sense the “MMO” market is doing perfectly fine. But it is misleading in the other direction too: do you really care how Second Life and Dofus and Asian MMOs are doing? There are a lot of games you will never play and/or people you cannot possibly play with that are propping up those numbers. The Truth™ is liable to paint a much bleaker picture.

I think we may need to start entertaining the notion that the entire genre – as we know it – has peaked. Not just the hot topic of F2P vs Subs, but the whole damn shebang. Classical arguments like “WoW lost subs because grinds/attunements/etc are good” become embarrassingly moot (if they were not already). Where are the bodies?

Whoever is leaving does not appear to be coming back for a second date, or even meeting new people; they have simply vanished back into the ether. Speculation on the whys seems moot as well, because there is zero indication the ex-pats transition anywhere else. Rather than go to the alternative MMOs that offer grinding/feature no grinding, they simply go away.

On a tangentially related subject, yesterday was my one-year WoW anti-anniversary:

A year ago yesterday I was doing Firelands dailies.

So… we have located at least one body. A body with an extra $179.88 in its pocket at that.

Where are the rest?

¹ Based on eyeballing this chart, which hasn’t been updated in a while.

WoW Loses Another Million+ Subs

That is right, kiddos, WoW is down to 9.1 million. It hasn’t been this low since January 2008.

In what must only be completely unrelated news, WoW has shattered all previous records for “longest time without a new content patch.” No, seriously. Dragon Soul was released November 29th, 2011. It is now eight months later. When I relayed this to my friend, he didn’t believe me. The gap between ICC and Cataclysm felt like more than a year. Well, I said, let’s look at the timeline:

  • December 8th, 2009 – ICC released.
  • February 2nd, 2010 – final wing of ICC opened.
  • June 30th, 2010 – Ruby Sanctum released.
  • September 7th, 2010 – the gnome/troll world events start.
  • October 7th, 2010 – WoW hits 12 million players (!).
  • October 12th, 2010 – Patch 4.0.1, with all the new talents/class changes.
  • November 23rd, 2010 – The Shattering, all new 1-60 experience.
  • December 7th, 2010 – Cataclysm launch.

So, yes, in a strictly literal sense it was a whole year between ICC release and Cataclysm launch. Looking at that list though, shit happened. There was a filler raid, there were world events, and I always have a blast when we get to toy around with the next expansion’s talent changes early. In between TBC and the Wrath launch, I remember soloing most of heroic Underbog on my Ret paladin to cap out my Sporeggar reputation, for example.

Now look at Cataclysm:

  • November 29th, 2011 – Dragon Soul released.
  • August 3rd, 2012 – I wrote a blog post.

I mean, come on. A $300 million MMO was released, floundered, and went F2P in that same timeframe!

Only Blizzard gets away with this shit. Good lord.