They have 7m subscribers. Some of those are paying $15 a month, some are eastern subs. Let us assume that the average amount a WoW "subscriber" pays is $10 a month. With 7m of them, they are getting $70m a month in income. So every two months they are getting roughly the same amount of money that it cost to create the entire SWtoR MMO (which I believe was quoted at $150m).
That isn't taking into account the ludicrously overpriced in-game services (server transfers etc) which are basically 99.9% pure profit. Or the fact that they sell overpriced extras in the in-game shop. Or the fact that they charge for expansions.
The simple fact is, there are a ton of MMOs out there that can function perfectly well on 500k playerbases. So why exactly would WoW be unable to do that? Is it the sheer volume of content they pump out? Hmm, I can't quite see that. Did MoP really provide THAT much over the 2 year life cycle? It could be that they have a bloated support structure of course, but even that is unlikely considering that they made a large number of people redundant a while back.
Nope, the truth is they could function on 500k if they had to, but instead of making enough money to hire gold plated prostitutes for their xmas party, they would have to go back to the regular kind. They wouldn't be able to buy a caribbean island every month from the money they make, or swallow the cost of creating (then apparently junking) Titan.
You know any other software company that could work on a massive project like that for so many years, then flush the work they have done and it not even cause a blip on their share price? Do you believe that could happen if WoW was just managing to survive on the subscribers they have?
They could have 500k subs, provide the same level of content and still make a profit. But they don't want to reach that stage, because then they would have to start behaving like a normal company, instead of being the MMO version of Microsoft. Don't believe me? With 500k subscribers, every 2 years they would be getting $140m in income from subscriptions and $40 expansion. Even ignoring their other methods of gathering funds, that is enough to support an MMO and push out decent levels of content.
Which must be true, otherwise why are there so many MMOs happily trundling along with that many players?