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[GW2] 4Q17

The fourth quarter results are in for Guild Wars 2: 34,903 million Won.

GW2_Chart2

What does the above tell us about the health of GW2? Well… there might be cause for concern.

Revenue for the two quarters encompassing Heart of Thorns was 67,888 whereas Path of Fire is 55,048, a decline of about 19%. A more concerning factor, IMO, is how these last two quarters encompassed the release of mount skins in the Gem shop. Based on anecdotal evidence, e.g. in-game observation and Reddit threads, the mount skins have been one of the most lucrative additions to the Gem store in months. The Gliders released in HoT were cool-looking, but only seen when, you know, actively gliding. Meanwhile, people are on their mounts a good 90% of the time these days. There are 50 total mount skins, and even if ArenaNet severely bungled the distribution thereof, it’s clear that they are hot items.

Despite that, the 4Q17 results barely moved from where they were in 4th Quarter 2013.

GW2_Chart_Bar

Bar Chart, if preferred. (source)

Having said all that, the situation is not dire per se. If you enjoy GW2 as I am at the moment, there is no particular reason why you could not continue for quite some time. Even with a lower player population, you are unlikely to notice a decline, as players are funneled together into event zergs, and the Diablo-esque loot (99% useless) pinatas keep the dopamine high.

What we are likely to notice is exactly what we are seeing today: a renewed focus on fiddling with Gem Store items and services. The Mount skins were a start, but have continued into the Black Lion Chest “upgrade.” The Fashion Wars endgame remains largely P2W, with rewards for actual content-clearing relegated to the junior varsity artists. And everyone is fine with that since there is no “power” being sold… only motivation. And besides, if you farm enough gold and convert it into gems, you can reap the rewards yourself!

Sigh.

The funny thing about it all is the fact that while you can purchase Gems with Gold relatively effectively over time, the biggest cut for GW2 is actually the Gem to Gold conversion. For example, as of the time of this writing, the conversation rate is 100g = 356 gems. However, if you wanted to buy gold, the conversion is 19g per 100 gems. So, basically you get only 2/3rds of the value buying gold. This means that ArenaNet should probably be encouraging more tradable (and thus sellable on the AH) items, rather than a laser-focus on Gem Store exclusives.

As an example, the legendary greatsword, Twilight, is currently selling on the AH for 2750g. If I really wanted that item right now, I would have to buy 14,474 gems and convert it to the necessary gold. That’s $180.92 worth of gems as of today. Or I could decide that that is absurd (it is), and start off on a journey to craft the Legendary myself, which could be a year-long endeavor that requires touching every part of GW2’s content.

Or, you know, buy an similarly cool-looking greatsword (or bow) skin off the Gem store for like $10. Either/Or. It is becoming increasingly apparent which one ArenaNet would prefer.

Age of the MOBA

According to EEDAR, by the end of 2015 MOBAs will generate more revenue than (F2P) MMORPGs in the North American market:

"Meteoric" pretty much covers it.

“Meteoric” pretty much covers it.

The difference is small – $501m vs $499m – but it’s impressive nonetheless for a genre that didn’t (formally) exist five years ago.

One thing is for certain though: MOBAs are the “new” hotness and are poised to overtake F2P MMOs either this year, or Soon™ in any case. Which is a fascinating turn of events for someone who really has less than zero interest in MOBAs specifically. Indeed, nearly every mechanic that make MOBAs “deep” are the same mechanics that make many MMOs terrible. For example, the whole Last Hit mechanic. Or having over a hundred different characters, many of whom are direct counters to others, requiring one to memorize a truly voluminous amount of minutia to succeed. You thought the whole Raid Dance memorization was dumb? Just wait until you spend time researching dozens of characters who don’t even get picked. Oh, and hey, I heard you like 40+ minute LFG fights were you (ideally) lose 50% of the time.

On the other hand, in the Venn Diagram for MOBA and MMO I wonder how much overlap there really is. Did some people leave WoW for League of Legends? What did they find on the one end that they did not on the other? Perhaps nothing, and the audiences are from two entirely different sources. Which really doesn’t answer the question of where the MOBA audience came from. Is this an entirely different generation of gamer coming to age during the rise of MOBAs? Or was this a deep pool of potential players who hitherto weren’t being serviced by existing products?

Maybe the answer is less complicated than I am making it out to be: MOBA players seemingly sprang from the earth because it’s all F2P. Easy to get into, easy to get hooked, and then easy to get monetized. As revenues approach half a billion dollars in NA alone though, this clearly is not a flash-in-the-pan phenomenon. Despite the MOBA saturation, revenue still increase almost 20% last year, according to the chart. You will undoubtedly have winners and losers in the market, but MOBAs are here to stay.

Which is… well, good for them. I’m going to play something else.

More Hearthstone Revenue Speculation

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:

Numbers.

Numbers.

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):

More numbers.

More numbers.

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.