[Blaugust Day 6]
It has been yet another Blizzard Investor Report in which Hearthstone metrics have been bundled or otherwise obscured, but this latest report added a few more variables with which to solve for X.
One of the juicier parts was this bit (provided by TheStreet):
Note that this quarter was an important inflection point for Blizzard. In spite of World of Warcraft subscriber declines, which were more concentrated in the East and partly affected by the success of Diablo III in China, Blizzard grew its Q2 revenues 29% year over year at constant FX.
This performance was driven by the strong performances of Diablo, Hearthstone, and Heroes of the Storm, which in Q2 made up the majority of Blizzard revenues. The franchise diversification inside Blizzard is happening rapidly, and even more importantly, the aggregate Blizzard community is healthy and growing.
- Destiny, Hearthstone, & Heroes of the Storm: >70M players & >$1.25B non-GAAP* revenues, LTD
- Destiny: >20 million registered players have played about 100 hours each since launch
- Diablo III has sold-through over 30 million units to date globally
- Hearthstone: Key engagement metrics nearly doubled year over year, largely on account of the new content/platforms.
- Overall Q2 net revenue GAAP = $1.044 billion, non-GAAP = $759 million.
- WoW specific GAAP revenue for Q2 = $221 million; non-GAAP $157 million.
- Asia Pacific net revenue for entire company: GAAP $105 million, non-GAAP $131 million.
- Blizzard specific revenue for Q2: $385 million.
That last data point was not specific in whether it was GAAP or non-GAAP, but I’m assuming it is the latter as otherwise WoW couldn’t be less than half of the Blizzard total, which is what was stated in in the investor report. So here are a few of rudimentary calculations we can draw:
- Blizzard’s non-WoW revenue for Q2 = $228 million (385 – 157).
- Hearthstone + Heroes of the Storm registered players = ~50 million
- Hearthstone = 30+ million registered players as of 6/5/15.
- Ergo, Heroes of the Storm has ~20 million registered players (70 = 20 + 30 + X).
- Destiny + Hearthstone brought in $850 million in 2014.
- The Q1 2015 report (PDF) stated Destiny + Hearthstone had $1 billion non-GAAP revenue LTD.
- Destiny + Hearthstone + Heroes of the Storm = ~$250 million combined in Q2 (1.25b – 1b).
- Diablo 3 sold 20 million copies as of August 2014. Thus sold another 10 million copies in last year.
So… yeah. Still feels like we’re missing too much information to draw any major conclusions.
That said, we can deduce that Hearthstone made less than $250 million in Q2, and less than $150 million in Q1. How much less remains to be seen. Also, while a lot of noise was made about the (F2P!) success of Diablo 3 in China, it bears mentioning that all franchises in both Activision and Blizzard (including WoW) totaled $131 million in revenue in China. In other words, it isn’t as though Chinese Diablo 3 is going to claim the lion’s share of the non-WoW pie.
As always, if you see an error or otherwise have put enough skill points in Language (Economics) to make better sense of the Investor Report numbers, by all means correct me in the comments below. If I had to guess, I’d peg Hearthstone at around $75-$100 million per quarter.
June has not been a good month for game company PR departments. Or maybe it has been an excellent month in demonstrating the necessity of their existence in the face of designers with a bad case of verbal diarrhea. But while I have been focused on ArenaNet and Blizzards’ debacles, the true disaster that is Destiny’s expansion, The Taken King, has slipped me by. Until now.
The story is more or less the same, as if ripped from an identical playbook: an expensive expansion, and an even more expensive version with includes content that the player already owns. The deal this time is with Destiny’s Collector Edition, which includes the base game and prior expansions along with emotes exclusive to this package. There is no way to purchase these emotes individually, and no value whatsoever added if you already own everything already released to this point. So, basically, Heart of Thorns 2.0.
What elevates this to another whole level was this interview with Luke Smith, Bungie’s creative director for the expansion. I highly, highly recommend you read the entire thing because it is comedy gold. Or you can simply read this exchange, and despair:
Eurogamer: I get that it is big but it is also the same price as the base game. That had four areas rather than one and more missions than the Taken King. Why is it the same price?
Luke Smith: All I can do is answer that with the same thing I just gave you… We’re really comfortable with the value we’re giving to players this autumn. I believe that once we begin to share more, players will be even more excited. And for existing players it also comes with the Founder’s pack with a new Sparrow, shader and emblem.
Eurogamer: Just not the emotes.
Luke Smith: It doesn’t because they come with the Collector’s Edition.
Eurogamer: Final question on prices –
Luke Smith: Is it also the final question on the emotes?
Eurogamer: I’m not going to mention them again. I can’t get them.
Luke Smith: But you can if you buy the Collector’s Edition.
Eurogamer: I’m not going to buy the game and the two DLCs all over again.
Luke Smith: Okay, but first I want to poke at you on this a little bit.
Eurogamer: Poke at me?
Luke Smith: You’re feeling anxious because you want this exclusive content but you don’t know yet how much you want it. The notion of spending this money is making you anxious, I can see it –
Eurogamer: I do want them. I would buy them –
Luke Smith: If I fired up a video right now and showed you the emotes you would throw money at the screen.
Eurogamer: What I’m saying is that fan frustration is not because they don’t understand the proposition. It comes regardless of how cool the exclusive content is. The frustration – and mine as a fan – is that the method of acquiring it requires me to re-buy content I bought a year ago.
Luke Smith: [Long pause] It’s about value. The player’s assessment of the value of the content.
I would like to imagine that the “long pause” moment included a return to sanity for Luke Smith, the awakening from a fugue state. Or just a realization for how unconscionably stupid he was just moments prior. I say this because he would finish the interview with a somewhat rational approach to the nature of time-sensitive content and the noting that one cannot go home again.
In any case, Bungie’s now-existent PR department rang up Eurogamer at 9am the next day to update everyone that there will be nameless Veteran rewards forthcoming with the expansion, that will be “even better” than the ones found in the Collector’s Edition. Which really makes you wonder about all those Veterans who already “threw money at the screen” over exclusive emotes, and if they can get refunds of said Collector’s Edition.
Or not, at least according to Bungie community manager David “Deej” Dague, who says in the updated post:
“The Collector’s Edition is mostly sold out, so the people who found that stuff valuable jumped at the chance,” Deej added in a separate post. “You’ll likely see it sold on eBay for much more than what we’re asking. But that’s not the point. Right?
I suppose the takeaway here, besides the entertainment value of all these high-profile face-plants, is that players are going to likely (successfully) call bullshit when they see it going forward. And a large part of that is going to be any expansion being released without some sort of added value given to the very people that made a game or franchise successful enough to warrant an expansion in the first place.
Is that player entitlement? Or is it a renegotiated business transaction with more favorable terms? I dunno, maybe haggling indicates a deep, moral failure on the part of the buyer. What I do know is that all current and future Destiny players are better off today than they were two days ago. And that’s enough for me.
Edit: Also, apparently you get an exclusive quest in the expansion if you buy a can of Redbull. You can’t make this shit up.
Because two posts aren’t enough!
Actually, the real reason is because during the comment back-n-forth with Syncaine, Wilhelm mentioned something I had never realized before: Blizzard actually does post revenue numbers for just World of Warcraft. You can follow along at home by navigating to the Activision Blizzard Investor page and the Q4 2014 Excel document entitled 12-Quarter Financial Model. On the Rev Mix by Platform tab, you get the following (edited) table:
The asterisk indicates that “Online” revenue solely has to do with WoW related subscriptions and services. So for 2014 WoW raked in $1.035 billion. Interestingly enough, this point of reference allows us to flip back to the NR and OI by Segment tab, which breaks down total revenue for just Blizzard (again, chart edited):
Apparently you can get a much easier summation of the above information from this PDF, which I only realized after the fact.
So, for 2014 Blizzard made $685m in non-WoW revenue. For the curious, those non-WoW figures were $319m in 2013 and $538m in 2012. As far as I know, only the Diablo 3 expansion and Hearthstone were notable releases in 2014, although obviously there is X amount of revenue coming in from incidental sales of D3, Starcraft, and such.
I was unable to find exact figures of total Reaper of Souls sales other than 2.7 million copies in the first week. Assuming $40 apiece, that lowers Hearthstone’s possible share by another $108m at a minimum. If the opening paragraphs of D3’s Wikipedia page can be believed, the original game has sold 15 million copies. Combined with news that D3 + expac sold 20 million altogether as of August 2014, that pushes the Diablo portion to $200m, minimum.
Going back to what we know, the Hearthstone revenue formulas are thus:
- [Hearthstone] = $850m – [$500m+ Destiny], or
- [Hearthstone] = $685m – [$200m+ non-WoW]
Incidentally, most of the Destiny reporting says it achieved $500m in revenue on Day 1. That’s not actually true – there was $500m in shipped product, but only $325m in actually-sold games in the first five days of release. Or about 5 million units, physical and digital. There are two near-as-we-can-tell figures that incorporate all of 2014: VGChartz’s 9.3 million units and 13 million unique players as of Christmas. Depending on how charitable you wish to be, that range is either $558m to $780m (@$60/copy), or $604.5m to $845m (@$65 average/copy). Which means Hearthstone is anywhere from $292m to… er, $5m.
I think I heard Syncaine fall off his chair from here.
All told, I still feel it’s entirely possible that Hearthstone made at least $100m in 2014, if not $200m. That’s a quite a reduction from my earlier post vis-a-vis $350m for Hearthstone, of course. And I’m fine with that in light of this new information; if I’m factually incorrect, then I will acknowledge it and move on. My only real horse in this fight is the ridiculously specious argument that A) Hearthstone is a mobile port, and B) it’s not that successful. Not only does current reality defy A, in terms of B it’s entirely possible Hearthstone (eventually?) outstrips Magic: the Gathering in yearly revenue.
Either way, not bad for a card game that came out of nowhere.
The one bit of news out of CCP’s Fanfest 2014 that peaked my interest was Project Legion. Which is, for all intents and purposes, a rebooting of Dust 514 on the platform it should have been released on in the first place: the PC. I’m not actually sure a sandbox PvP/PvE hybrid shooter MMO is what I’m looking for anymore, but given I have continued to grudgingly slink back to PlanetSide 2 for my FPS urges, let’s just say that I’m not exactly opposed to new experiences. It should be noted that in that article, CCP basically states that Dust still has 100,000 active daily players, which is around 100k more than it seemed to have any reason to have last time I played.
Incidentally, NoizyGamer believes that this year or the last one might have marked the last year of consecutive EVE subscriber growth. That’s noteworthy specifically because the ~10 consecutive years of growth itself was noteworthy. And rather annoying to argue against with my MMO market saturation theories.
Speaking of bodies, WoW lost another 200k of them since last quarter, bringing the total to a mere 7.6 million. I’m not really sure what to think about this sort of thing anymore; at the moment, I’m leaning towards simple incredulity that there are 7.6 million people paying a subscription to a game that will be going on a full year without any new content. I mean, I too was that guy years ago, but that sort of shit doesn’t fly with me these days.
Speaking of questionable Activision Blizzard moves, the console-only FPS MMO Destiny is reportedly going to cost $500 million:
To put some perspective on this, the money being spent on Destiny is more than twice the amount EA reportedly spent on Star Wars: The Old Republic and a little less than double the $265,000,000 Rockstar paid to get GTA V made. The Reuters article cites analysts saying that Destiny will have to sell 15-16 million copies at $60 to break even. So, the final game has to make a very, very good first impression.
For reference, Borderlands 2 cost ~$35 million and sold 8.5 million copies as of February 2014. It’s worth noting that the first link estimates Destiny at $140 million, so it’s entirely possible that the $500 million is in reference to the entire 10-year franchise run that Activision Blizzard purchased from Bungie rather than the BorderHaloLands game we have on display.
Still… goddamn. This doesn’t even seem like the same ultra-conservative game company of a year ago, who didn’t want to branch out into the mobile space simply because the Top 10 games change every year. I’d like to imagine those executives with a fat Hearthstone egg on their face, but great handfuls of money make for surprisingly effective yolk removal.
Remember BorderHaloLands, more commonly known as Destiny? You might recall I have mentioned it before. Well, yesterday was the first day of a press junket and the overarching narrative is… not good, with Kotaku and Destructoid basically calling it boring. They also called it rather amazingly detailed and lush and beautiful. And barren. And lifeless. And populated with level 2 mobs with health bars that you shoot to power your rechargable super-skills. Yeeeeaaahh.
There is a mega-thread on Reddit if you want more sources and commentary.
What’s kinda funny to me are the understated dangers of game design, at least when you let the hype train roll along just a tad too long and it misses it’s station. In just about every article I’ve read on Destiny, unfavorable comparisons are being drawn between Destiny and Titanfall. And why not? Both are next-gen sci-fi shooters trying to establish new IPs. The problem is that, like it or not, Titanfall pretty much ate Destiny’s lunch before he even got to the cashier. Just look at these developer quotes in the Polygon article:
“The way we like to think about it, is not everybody is going to want to play Destiny, but everybody is going to be able to play Destiny if they want to,” Parsons added. “We’ve made significant improvements to the way players are going to play. People are surprised at how quickly they master the controls and get up to speed and having a great time.”
“It might not feel new compared to some of the other things that have come out recently, like Titanfall,” said design lead Lars Bakken, who added that there are changes, like free-floating double-jumps that can last for a long time. “But we’ve been prototyping for a long time and we’ve created experiences that you’ve never been able to experience before in the previous games that we’ve made, especially because it’s inherent to your character.”
I mean, I laughed at the design lead sheepishly trying to draw a parallel between the now-genre-defining wall-running parkour of Titanfall and his own game’s “long-lasting double jumps.” And then I felt sad for them. Because how were they supposed to know? As I mention in the comments yesterday, I was all gung-ho for Hex to the tune of an $85 Kickstarter pledge right up until Hearthstone came out of nowhere – 3 short months later – and pretty much flipped the proverbial design table. Now I feel like anyone coming out with a digital TCG that requires you to spam-click “Pass Priority” a dozen times a turn is basically Dead On Arrival. Hex has moved on to beta recently, but I’m not even sure I have the alpha client still installed. Why bother?
In any case, the word on the street is still that there won’t be any PC version of Destiny. The reason?
Parsons also said creating and releasing a PC version of Bungie’s shared world shooter would not be as easy as many believe, because all versions of the game connect to the same persistent video game world, which itself extends to multiple platforms.
“It is not nearly as simple as you think,” he said. “It is one central world no matter what the platform, and so that requires lots of intensive thought.
Err… okay. It sorta sounds like they’re implying that people on a Xbone can play with people on a PS4, but I’m relatively certain that that’s not actually going to happen. Just like the chances of me considering a purchase of this game. But good luck, Bungie, all the same. You’re going to need it in this new environment, especially considering you’ve already got the next 10 years of this IP all planned out. If Destiny 2 doesn’t have wall-running, you’re going to be in for a bad time.
Random news mishmash!
Ken Levine had an AMA on Reddit on Tuesday, in which he took some incredibly soft, er, softball questions about Bioshock Infinite and its upcoming DLC. I am not sure what exactly I expected – perhaps an apology? – but I left pretty disappointed. Actually, I sorta found myself feeling angry every time I read someone proclaiming that Infinite was their “favorite game ever.” I keep thinking: “No it’s not. The game taking place in your head bears no resemblance whatsoever to the actual game you are playing.” Yes, there is an ontological difference.
I generally have no problem with people having different favorite games than me. If you liked Zelda: Wind Waker more than anything else in the world, good for you. And, hey, now you can buy the High Definition cel-shading version with 300% more bloom! And with basically all the extremely annoying shit you had to do back in 2003 tossed right out: your sailboat can go 50% faster, you don’t have to bother with changing the wind while sailing (pretty sad how exciting that sounds in a game called Wind Waker), and there is significantly less trolling the ocean floor for maps that lead you to pieces of the pieces of the Tri-Force, i.e. what you do for 60% of the game.
See? No judgment here.
I suppose I should be more accommodating for peoples’ favorite games, given how my top-list basically came out in 1997-1998. But, seriously, if Bioshock Infinite registered anywhere higher than Top 50 for you, I’m going to need you to play some other games because damn. It looked pretty and the soundtrack was awesome, but the gunplay and story… you know, it’s not worth it anymore. I’ve said my piece.
Let’s just smother that baby and pretend these paragraphs didn’t happen. ¹
Remember that not-Halo game Bungie was making? Me neither. Kotaku posted an article/video yesterday about how Bungie was coining the term “shared world shooter” for Destiny, and basically contrasting that with more traditional MMO player experiences. Which is actually a sort of interesting game design/philosophy argument when you think about it.
As the video points out, a game like Destiny or GTA: Online simply couldn’t work with 100s of players dicking around and causing mass mayhem. It got me thinking about how MMOs themselves manage to pull it off, and I realized that our extremely limited interaction capability is probably due to precisely this problem. The more people you put in one place, the less they are able to change or influence the environment, lest you spend your gaming hours traversing barren craters everywhere.
This is not a new subject by any means; I posted something similar way back in 2011 and the concept of TTP goes even further back (if not to cave paintings). The angle I had not considered was how ridiculous (and abusive) something like WoW would be if you could impact other players to degree you can in GTA: Online. Mount-jacking, being pushed off cliffs via collision-detection, and so on. Some sandboxes advertise these as features, of course, but I’m starting to wonder which one comes first. Like maybe you have to rely on player-driven content simply because players would just create a constant shitstorm in any sort of PvE content if they had to ability to directly
grief interact with others.
Getting back to Destiny… well, I’d rather not. Once I realized that they are basically making a non-cel-shaded Borderlands, my interest level plummeted. Just watch that E3 video again. Dungeons? Check. Bosses? Check. Random loot drops? Check. Raids? Check. It can still be fun, no doubt, and maybe they will be able to do some things better than Borderlands did. But the game is “Bungie’s Borderlands” to me now, and I am very much burned out from Borderlands 2 right now.
FF6 Coming to iOS/Android
I don’t have much to add to what’s already out there. Well, other than how I think it’s amusing how much these old properties are being mined for residual income in an environment that (I assume) is dominated by ROMs. Actually, it’s probably pretty smart in that even a relatively tech-savvy person like me balks a little bit at the steps necessary to play SNES games on my phone. Hell, I’m not even sure I want to play these games on my phone in the first place; my commute is a short drive and my breaks/lunches get filled pretty quickly via Feedly and Reddit all on their own. And even if I did want to play these games, I sure as hell wouldn’t want to play them using a SNES controller overlay on the touch-screen.
Although I have perked up a few times hearing that I could play Xenogears on the PSP and Vita, I just can’t envision a scenario in which I would be playing it and not be near either my computer or television. If I’m not playing ROMs on the computer right now, why would I be doing so on a handheld? Help me out here, people: when would you be playing these classics on portable devices?
Plus, you know, Sony is still selling 32gb memory sticks for $72 like it’s goddamn 2005.
¹ That’s a Bioshock Infinite joke. If you don’t get it, be thankful.