Blog Archives

Blizzard’s Q4 2014 Report: Hearthstone Edition

The big news in the Activision Blizzard Quarterly Report everywhere else is that WoW appears to have stabilized at 10 million subscriptions. Also, that Hearthstone has 25 million registered users, whatever that means. After reading through the transcript of the earnings call however, it turns out that we can estimate exactly how well Hearthstone is performing. Spoiler alert: it’s pretty damn good.

First, we have this quote from Bobby Kotick:

Last year, we launched 2 of the most successful new entertainment brands, Destiny and Blizzard’s Hearthstone. Combined, they attracted over 40 million registered players worldwide and generated more than $850 million in non-GAAP revenue, a testament to our team’s proven abilities to capture the imaginations of millions of people around the world time and time again.

Then from Eric Hirshberg (CEO of Activision):

So in closing, over the last 3 years, Activision Publishing has methodically expanded its portfolio, and for the first time in its history, now has 3 tent-pole properties, each of which generated over $500 million in non-GAAP revenue this year and drove the highest digital revenues in Activision Publishing’s history.

So by the power of inductive reasoning, we can say Hearthstone made around $350 million in revenue last year. Further, according to Thomas Tippl (COO), Destiny and Hearthstone are “tent-pole franchises” that were “profitable out of the gate” and are expected to “contribute to [Activision Blizzard’s] results every year in a significant way.” Combine that with Mike Morhaime confirming that the December release of the Goblins vs Gnomes expansion resulted in the highest monthly active players and highest revenue quarter-to-date, that indicates Hearthstone is still growing a year later. That’s kind of a big deal.

Now, it’s entirely possible that “more than $500 million” means Destiny has a larger slice of the $850 million combined revenue pie than I am assuming here. Maybe Hearthstone “only” achieved $300 million. Or even as little as $250 million. It’s helpful to keep some perspective though: all of paper and digital Magic: the Gathering brings in $250 million in revenue. So, on the low end, Hearthstone is already a bigger franchise than Magic: the Gathering. And apparently growing.

Not bad for a “casual app with a PC port.”

Or Maybe We Won’t See

Once again, Blizzard has buckled under the weight of people giving them money:

#ZerothWorldProblems

#ZerothWorldProblems

I would call something like this unprecedented, but I suppose I have experienced something similar firsthand back when Guild Wars 2 came out (Jesus, was it really 2.5 years ago?). I mean, it’s one thing to take people’s money and then not let them play because the servers are on fire; it’s something else entirely to not take the money in the first place.

In related news, someone on Reddit provided the following Twitch screenshot:

Rather unprecedented.

Rather unprecedented, I think.

In case that’s hard to see, it says Hearthstone had 190,704 viewers on Twitch.tv – higher than the next two games combined, which were… League of Legends and WoW. At the time I’m writing this post, it has decreased to ~86k viewers, but it’s still beating out LoL by a few thousand. New expansion and all, sure, but that’s still not a bad performance for a “casual app with a PC port.”

Crushing Success

The final tally for Microsoft’s purchase of Minecraft is $2.5 billion. Markus Persson’s (aka Notch) personal take is reported to be $1.8 billion.

What is almost more interesting though is his thought process behind selling at all:

[…] I’ve become a symbol. I don’t want to be a symbol, responsible for something huge that I don’t understand, that I don’t want to work on, that keeps coming back to me. I’m not an entrepreneur. I’m not a CEO. I’m a nerdy computer programmer who likes to have opinions on Twitter.

As soon as this deal is finalized, I will leave Mojang and go back to doing Ludum Dares and small web experiments. If I ever accidentally make something that seems to gain traction, I’ll probably abandon it immediately.

It is almost funny, in a way. Can you separate the making of games from the business of making games? One can imagine some hobbyist painter who inadvertently crafts a masterpiece… that simply stays in the attic for decades. Or a writer who simply creates a book for themselves. The process is what they desired, not the outcome.

But games? Like information, games yearn to be free. A game without players is incomplete. So while I can understand the sentiment behind Notch’s desire, it seems somewhat futile. Being a game designer does not make one a good entrepreneur, true, but once released a game takes on a life of its own.

I will admit that my first reaction was to be a little petulant over Notch’s payout, because $1.8 billion. But looking at Minecraft itself and how it got there… who can really complain? This isn’t a game that preys on the weaknesses of the human psyche with microtransactions and cash shops (in the base game). This isn’t a game built around its business model. This is Old School purity in which a game relied on its own merits to sell more units. Sure, there is merch and movie deals these days but the core of the game remains the same.

So… good on you, Notch. This sale puts you around #1013 on Forbes’ billionaire list. Or to put it another way, Minecraft single-handedly made you equivalent to 2-3 JK Rowlings. Or about a Gabe Newell and a half.

Crazy world.