Activision Blizzard Q3 2012 Earnings Call

[Mormolyce]

I kind of hope they don't ever report sub numbers in the earning calls again so jerks on the net stop using them as some kind of pathetic trophy of victory in their crusade to hate on a game they apparently don't like and yet can't stop talking about. Those numbers are for investors in the company. Players of a game shouldn't care how many other people are playing it, the only thing that matters is whether you're having fun or not.

[Tharn]

Oh look, another opinion stated as a fact.

Actually he may be closer to reality than you think, World of Warcraft was one of the bread and butter titles for the company. Believe somewhere they said it accounted for 50% of the income/capital generation.

The fact that so little was said about Warcraft at all during this Q3 report should be worrying quite a few people including people who work in the company. I was waiting for Activision/Blizzard to come out saying " TADA " about Warcraft numbers and quite frankly, Warcraft was pretty much pushed to the side almost like they were the "elephant in the room." They focused more on Call of Duty and Diablo than anything to do with Warcraft.

That's very troubling when you downplay what has been traditionally your big money maker to talk about other titles. That doesn't scream that everything is just fine in the Warcraft Universe; it says quite the opposite.

So.

Not under 10 million.

The 39 of your who voted saying it'd be under...

Hi.

The fact that so little was said about Warcraft during this Q3 I'm more than inclined to believe they just let everything roll through with previously reported numbers and did not want to "open pandora's box." As I said with so little said about Warcraft in this Q3 and saying Diablo was their big seller. Those working in Warcraft; I think should be very nervous.

[Kevyne-Shandris]

To be honest though WoW in its current state needs to die, not because of the game itself but because of the gaming scene in general. Games which are infinitely better aren't given the chance to succeed because players are too invested in this game with friends etc and expect any new game to have 8 years worth of stuff to do at end game.

Yep.

Imagine what MMOs could've been today if this 800lb gorilla wasn't in the room. Imagine what WoW could've been if not all that money was spent on trying to please only 10% of the population?

The lack of innovation due to stability -- or old ideas of what a MMO is -- hurt the entire genre.

---------- Post added 2012-11-07 at 07:45 PM ----------

That's very troubling when you downplay what has been traditionally your big money maker to talk about other titles. That doesn't scream that everything is just fine in the Warcraft Universe; it says quite the opposite.

I need to find that stock analysis (it was v-e-r-y thorough) that broke down projections for Activision-Blizzard for the next 3 years. He didn't gloss over the details, especially the troubling situation with WoW, as it bleeds.

Blizzard knows it's suffering, and I bet they're thinking because it's old (old doesn't kill 1.7+ million subs, decisions do). What they need is a fresh outlook.

Burns me seeing their beliefs (which can be wrong as it's so blanket) as some policy. Tseric said it back in 2007, and GC repeated the same in his reply in 2010 -- it's an actual working belief at Blizzard that players are only trying to game the system. That's tunnel vision, as players are not all the same, and shame on Blizzard to think so.

[Slowpoke is a Gamer]

I'm saying D3 expansion announced 2013 or 2014. More likely Blizzcon 2013, along with WoW Expansion 5.

[ibeckman671]

I would definitely expect an expansion announcement for both games...or at this rate, probably just a date for D3 PvP. "Diablo III: PvP Time; Also, Diablo I guess."

[Galaddriel]

How do they lose 20% of subscription income and claim no loss in subs?

3rd Q 2012 $305m
3rd Q 2011 $385m

Both those quarters said 10 million subs but the numbers don't add up.

[SamR]

Actually he may be closer to reality than you think, World of Warcraft was one of the bread and butter titles for the company. Believe somewhere they said it accounted for 50% of the income/capital generation.

The fact that so little was said about Warcraft at all during this Q3 report should be worrying quite a few people including people who work in the company. I was waiting for Activision/Blizzard to come out saying " TADA " about Warcraft numbers and quite frankly, Warcraft was pretty much pushed to the side almost like they were the "elephant in the room." They focused more on Call of Duty and Diablo than anything to do with Warcraft.

That's very troubling when you downplay what has been traditionally your big money maker to talk about other titles. That doesn't scream that everything is just fine in the Warcraft Universe; it says quite the opposite.



The fact that so little was said about Warcraft during this Q3 I'm more than inclined to believe they just let everything roll through with previously reported numbers and did not want to "open pandora's box." As I said with so little said about Warcraft in this Q3 and saying Diablo was their big seller. Those working in Warcraft; I think should be very nervous.

Somehow I think if they had spent 30 minutes talking about how awesome it was that they got back to 10 million WoW subs again, you would consider that worrying, too.

They already had a press release just before Q3 ended. What more did you want them to say on the call?

Seriously, given that we knew ahead of time that the WoW numbers on this call would be 10 mil, what exactly were you expecting from the call?

[Kevyne-Shandris]

How do they lose 20% of subscription income and claim no loss in subs?

3rd Q 2012 $305m
3rd Q 2011 $385m

Both those quarters said 10 million subs but the numbers don't add up.

Shell games.

Hype the good, ignore or if pressed, gloss over the bad.

They loss subs, over 10%, but they're hyping the big numbers again. The big numbers aren't just subs.

Shell games.

[Slowpoke is a Gamer]

Shell games.

Hype the good, ignore or if pressed, gloss over the bad.

They loss subs, over 10%, but they're hyping the big numbers again. The big numbers aren't just subs.

Shell games.

They could reclassify what a subscriber is to make it include the freebies. Thereby looking like a flat month while losing income.

[Tharn]

Somehow I think if they had spent 30 minutes talking about how awesome it was that they got back to 10 million WoW subs again, you would consider that worrying, too.

They already had a press release just before Q3 ended. What more did you want them to say on the call?

Seriously, given that we knew ahead of time that the WoW numbers on this call would be 10 mil, what exactly were you expecting from the call?

I was expecting to see reported their total sales of MOP to date, not just a rehash of 1st week after release we sold 2.7 Million. I expected a "Tada" the fact that their was no statement of total sales to date past their 1st week sales should trouble anyone.

[mosely]

How do they lose 20% of subscription income and claim no loss in subs?

3rd Q 2012 $305m
3rd Q 2011 $385m

Both those quarters said 10 million subs but the numbers don't add up.

My theory (which I posted earlier in this thread): I think that a mass exodus throughout the final months of Cataclysm, followed by a mass resurgence of subscriptions at MoP launch would explain how subscriber numbers at the September 30 mark remained the same despite a huge decrease in subscription revenues.

Also, note that those earnings are the combined subscription revenues from WoW and CoD.

---------- Post added 2012-11-07 at 08:34 PM ----------

Shell games.

Hype the good, ignore or if pressed, gloss over the bad.

They loss subs, over 10%, but they're hyping the big numbers again. The big numbers aren't just subs.

Shell games.

They state very frequently and explicitly that WoW subscription revenues are down from last year. Blizzard's 2012 revenue is largely influenced by D3 and MoP sales, but offset by losses in WoW subscription numbers compared to the previous year.

[Deleted]

My theory (which I posted earlier in this thread): I think that a mass exodus throughout the final months of Cataclysm, followed by a mass resurgence of subscriptions at MoP launch would explain how subscriber numbers at the September 30 mark remained the same despite a huge decrease in subscription revenues.

Also, note that those earnings are the combined subscription revenues from WoW and CoD.

This makes sense. Another possible explanation is that the Western : China sub ratio was higher in 2011 than it was in 2012.

[dokilar]

while i wasnt predicting they would jump back up to 12 million subscribers i would have thought they would have gained more since they announced the intial increase during launch.

also i brought this up in another thread but never really got any replies to it (at least i dont remember if i did). there was a discussion about some guy who multi boxes 40 accounts. so i was wondering, out of 10 million subscribers they have i wonder how many of those subscriptions are individuals and not people who have 2 or 3 different accounts, or 40 in this one persons case.

[NoRest4Wicked]

I was hoping Pancaspe would be right and MoP would bring... What did he say, peak at 20 million? Ah well.

Okay, it was 15.

I expect a new high of 15 million subs for MOP

[mosely]

This makes sense. Another possible explanation is that the Western : China sub ratio was higher in 2011 than it was in 2012.

That's a good point, I hadn't thought about the difference in subscription fees paid by players in different regions.

[Xeraxis]

while i wasnt predicting they would jump back up to 12 million subscribers i would have thought they would have gained more since they announced the intial increase during launch.

also i brought this up in another thread but never really got any replies to it (at least i dont remember if i did). there was a discussion about some guy who multi boxes 40 accounts. so i was wondering, out of 10 million subscribers they have i wonder how many of those subscriptions are individuals and not people who have 2 or 3 different accounts, or 40 in this one persons case.

What does it matter how many people multibox? A subscription is still a subscription either way.

[Tharn]

That's a good point, I hadn't thought about the difference in subscription fees paid by players in different regions.

China also does not accomodate a Monthly subscription form of payment, they pay on a Pay per Play basis.

http://en.wikipedia.org/wiki/World_of_Warcraft

Regional Variations

In China, because a large number of the players do not own the computer they use to play games (e.g. Internet cafes), the CD keys required to create an account can be purchased independently of the software package. To play the game, players must also purchase prepaid game cards that can be played for 66 hours and 40 minutes.[58] A monthly fee model is not available to players of this region.

[IxilaFA]

I was expecting to see reported their total sales of MOP to date, not just a rehash of 1st week after release we sold 2.7 Million. I expected a "Tada" the fact that their was no statement of total sales to date past their 1st week sales should trouble anyone.

Or not trouble anyone, because people don't have to know how many people are subscribed in order to enjoy the game.

But naysayers will twist the details any way they want, while pro-Blizzard fans will twist it the way that helps them. These threads seem to be largely useless and just encourage arguing in the community.

[dokilar]

What does it matter how many people multibox? A subscription is still a subscription either way.

it doesnt matter, everyone should play what they enjoy playing regardless of how many other people are playing it and what those people think of the game.

i was simply just asking a curious question. theres no need to take it the wrong way and jump to speculation that im some kind of "wow hater/basher"

[MikeyD]

Despite how people want to spin it, it's evident that the game isn't experiencing a growth surge. So when the growing stops, the shrinking begins. How fast will the shrink be? That's what we will see as each fiscal quarter's results are reported. People will sooner or later come to terms with the game they know and love is dying, it has been since it went live. Everything dies. Ultima Online is still dying...so is Everquest.

But if you love WoW and your life is so intertwined with it that naysayers and discussion about subscriber losses really upsets you, then perhaps consider seeing a doctor to get a little help.

The lack of actual subscriber totals being reported, and the evasive answers when questioned about China's performance (he spouts off about hitting a million concurrent users at a single point in time, which doesn't indicate a whole lot for financials) it's clear that the big picture isn't as beautiful as they'd hoped.