I am going to present here my own version of "what went wrong" and why WoW lost so many subscriptions recently. As well as my conclusion, what needs to be done / fixed in next expansions.
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I think, that the worst thing happened to WoW in last 3-4 years and the main reason which, I believe, resulted in loss of subs and people getting disappointed - Blizzard dumbing down the game. I believe, that it's dumbing the game down which was responsible for removal of so many features and, as a result, a lot of niche in-game activities, customization options and extra features many players actually enjoyed.
Why did they start to dumb the game down in first place? I believe, mostly for trying to make it appealing for younger players and kids. But they failed to realize, that RPG is not a children-friendly game genre and will never be.
Even if there are and were exceptions - all the 12-year-old ones who started playing WoW once, are already adults. And if you want new players to join, it's much more likely that those below 16 will not understand WoW and find it worthy the time. Modern kids prefer shooters, games with emphasize on 3D effects, etc, while spending extra time on thoroughly reading questlines, going deep into lore aspects, etc... you understand me, right? As I said - RPG is not a kids friendly genre. So dumbing the game down in order to make it more appealing for children was a fail.
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Now, to the big list of things which got dumbed down lately. Take WoD, for example:
Professions - gone; with combat benefits from each profession removed, all professions (except Engineering) became absolutely useless for those people who don't raid (PvP'ers and casual players). All is based around daily cooldowns; for instance, if I am a player interested in economic aspects of the game and I invest more game time into gaining profit, I still can't best my potential competitors, cause I am limited by a daily cooldown....
Character customization - nearly gone; for max-level gear most socket slots were removed, reforging removed. There are nearly no enchants, no leg armor, no inscriptions, no belt buckles, weapon chains, etc. for level-relevant gear. Nothing.
Gathering - nearly gone (needed again only in 6.2 due to Felblight, but it's too late). Garrison gave everything and even more than was needed for more than half a year before 6.2 was introduced. People abandoned their gatherers.
F***ing Garrison handling everything for free, with minimal thought and effort.
Hunt for rare items - lost any purpose due to Salvage Yard; Take transmog items, for example - these lost most more than half of their AH value and therefore any reason to spend time farming them, since Salvage Yard handles the rarest of items for free, based just on stupid luck. Teebu's Blazing Longsword, for example, which used to be super rare and cost 50-75k, now hardly costs 5k due to Salvage Yard interference and all AHs are flooded with such items.
Items below max level in general - Due to relatively cheap heirlooms covering 2/3 of what players can wear already, all BoE items / dungeon items / etc. below the max level became nearly useless. Won a pair of legs in dungeon? Throw away in a moment, heirloom ones are still better thus grant XP. Got a blue BoE necklace dropped in dungeon, or even an epic one?? Won't sell - why, there is a cheap heirloom growing with character. Throw away again.
World PvP - nearly gone. Reason - people have everything in garrisons, they don't need to gather anything, level professions, etc,. so they sit there and queue to dungeons / raids from Garrison, in absolute safety 24/7. Cities are filled with lvl 100 overpowered guards everywhere, enhanced with Stealth detecting abilities, and flying patrol which dismounts any attackers if they fly too low.
Poor battle pet content... In comparison to MoP, which introduced and developed this game feature, WoD offers a lot less stuff related to pet battles. And it's a shame - at once something good and fun was added, so give it more resources! These new pets in Tanaan were pathetic, so easily beatable. Garrison daily posed some challenge? Very well, let's listen to few crybabies on forums and dumb it to nonsense, so a single pet can beat all three.
Primitive and ridiculous lore events and cutscenes - some episodes of WoD were stomach churning to watch for educated adult players. Pathetic Yrel character, becoming Exarch in literally no time from nothing, and so on... What, Metzen can't create something worthy and logical anymore??
You see, how much interesting stuff, that players used to do and spend their time on, was completely erased from the game just in one expansion!
So, what remained?
Log in, do the garrison stuff, then (depending if you PvP or PvE) queue to LFR / random BG / Ashran, or go into Normal / HC / etc. dungeon or raid.
Play few Arena games, if you're lucky to be Alliance (Horde and finding Arena partners - there is a little problem you've got right now).
Maybe do few daily quests in Tanaan if you still need some raiding items / Apexis. And that's it.
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So, what needs to be done to help the situation??
First of all, bring all the aforementioned back.
Most of loyal subs who still play are adults. You can bring former players back, which are most likely to be adults as well. So, start thinking about making the game challenging and complicated again, in order to attract customers of relevant age. Stop thinking of 12-year-olds and design the game to be friendly to them: it is not your main playerbase.
P.S. And, for God's sake, wipe the goddamn SALVAGE YARD from existence.