WoW gearing up for Microtransactions (of the F2P variety)

[Slant]

Blizzard is a company, it is illegal for them to lie about their profits. The shareholders would sue if they were being told false information, and the various agencies set up to combat business corruption would shut them down ...

Just an example of how this doesn't work as you think it does. How do you calculate sub numbers and the projected revenue? Well... let's go:

1. Include people that just bought the game and are on their trial, they paid 50 bucks didn't they? Or don't include them... huh
2. Include people that are returning players or not... hmmm
3. Include active players only... or just take anyone playing the game no matter how, everyone has access to the store, right?
4. Count unique players or not. That would take some of those pesky double or triple accounts out of the equation that only makes it complicated.
5. How do you count asian gamers that pay in an internet cafe by the hour? Is it one account per computer? Or one account per player? How much does he leave per month at the clerk? Or do you count the business that runs the cafe?

You see, those are all valid variables. And however big or small I want the number of subs, I can twist it to fit EXACTLY what I need. Talk to your trusted broker about how numbers can be manipulated in a perfectly legal way to get you whatever number you want. As long as Blizzard stays within a realistic ballpark swing, you'll pay more to prove they're a fraud than they lose money if you win.

Just sayin' man. Don't get so worked up over someone saying a company is not 100% honest. They rarely are. They're out there to make money. And they'll use every inch of law they can abuse to make more. And laws are only there to prevent the worst things from happening. Not from businessmen creating opportunities by cheating a little. Otherwise none of you would ever buy a computer for 1k bucks that only costs like 50 bucks in material and has been researched 5 years ago, because they're not going to spoonfeed you the latest technology unless the competitor is pushing them to do so. And that goes for every industry.

Edit: Also, I think you need to look up the word corruption.

[xanzul]

If you look at some of the blue posts from around the time the head items were added to the Blizzard store, they state that they were an experiment to see how selling gear in the store would be reacted to in the Western market and realized afterwards that it was a mistake. They also mentioned that the f2p model wouldn't suit the way WoW was designed. Of course that doesn't mean it won't ever come to that. Just look at how different the game is now from Vanilla and tell me to my face that such a change wouldn't be viable.

Also on the subject of f2p I heard some discussion on a podcast that made me realize something the other day. The guy talking hadn't played since the Vanilla/TBC days and had to quit WoW because he was screwing up his life by playing so much. He ruminated that as soon as WoW's subscription numbers drop below a certain point, Blizzard will have the f2p model pre-loaded and ready to be activated on the PTR with the flick of a switch. A game with this much money behind it NEEDS to have a fail-safe if things start heading into a downward spiral, though at the moment we are simply seeing a decline. Scary to think about but it could easily happen.

Considering the significant loss in profits that going exclusively free to play would cause for Blizzard and Wow it actually isn't viable in any way shape or form. Again the concept of exclusively free to play or exclusively subscription based isn't standard anymore because mixed payment models are much more profitable.

[Thetruth1400]

I'm pretty sure this is only staying on Asian servers since they pay completely differently than everyone else.

I believe it's being "tested" in Asian markets, not that it's exclusive for there. At least that's my impression based off some of the blue responses we've seen.

WoW won't go F2P for a very long time. Sure, the Asian market pays differently then the rest of the world, but even if 75% of their market is in the Asian market, that leaves 25% or almost 2 million non Asian accounts. That's roughly $28.9 million a month or $346.5 million a year they'd still be raking in by not going free to play.

I do see them adding a ton more to the Blizzard store though, but only cosmetic / non game changing items. That means more cosmetic gear, mounts, mini pets, etc. and flasks like this one, with the 100% EXP Boost and even potentially the Potions of Luck going to a for sale item.

I don't agree with that kind of business model, but I do see them doing it to milk their cash cow longer until Titan rolls around. MoP had the potential to be the golden goose WoW needed, but in the end, it turned out to be a regular goose instead.

Just an example of how this doesn't work as you think it does. How do you calculate sub numbers and the projected revenue? Well... let's go:

1. Include people that just bought the game and are on their trial, they paid 50 bucks didn't they? Or don't include them... huh
2. Include people that are returning players or not... hmmm
3. Include active players only... or just take anyone playing the game no matter how, everyone has access to the store, right?
4. Count unique players or not. That would take some of those pesky double or triple accounts out of the equation that only makes it complicated.
5. How do you count asian gamers that pay in an internet cafe by the hour? Is it one account per computer? Or one account per player? How much does he leave per month at the clerk? Or do you count the business that runs the cafe?

1) Active subs are subs that are active at the time the question is answered. If Blizzard came out right now, on 9/23/13 at 6PM PST and said, "We currently have 6 million players." that would be the answer for how many they currently have at that time. Sure, they probably rounded the number off, but it's still a ballpark figure.
2) Again, if the account is active, there's no reason to not count them. If they phrase it as, "Our projected number for this date is 6.5 million subscriptions." That's little more then a guess. They're not claiming to have 6.5 million, they're saying that's their projection.
3) The only subscriptions they count are active ones. What that means is, it doesn't matter if the person logs in for 10 hours a day, or one never, but still pays the subscription fee. That account is active.
4) Multi-boxers have very little to do with things. So what if one person has 10 accounts or 10 people have one account, there are still 10 accounts. They get the same amount of money from either situation.
5) They have to have a subscription, just like everyone else does. It's one account per player, just like here. They buy game time, just hourly. What they pay the internet cafe to use one of their computers / internet connection is irrelevant for anything here. Their business and WoW are two completely separate things. What you are essentially saying is that we should take into account the profits of any company in America that sells you internet connection, the copy of the game, or even the computer you use to play it on. Again, they don't matter.

Sub numbers are always something that Blizzard can figure out at a moment's notice. They can take a screen shot of all accounts, and do the math from there. As for projected totals, that's a totally different ballpark, and nothing more then guesswork based of history. To get a projection of where they'll be in three months, six months, a year, etc. they just need to look at how the game has been trending and what has been happening at that point in time. At the end of the day though, it's just a guess. People need to realize that "projected" does not mean the same thing as "exactly."

[xanzul]

LOL, like that's a valid point in this debate. I could twist every sentence Blizzard says and turn it any direction I want. That's what happens when you let PR people run your company. Not saying you're wrong about them being honest or dishonest. Just saying "fraud" is something that doesn't apply to the game industry, really. Jesus Christ... get back to earth. Slinging around buzzwords. Disgusting.

On that note: Korea is not EU/West. When will people get that message. However dishonest you think Blizzard is, they have never made a secret of their intentions with Korea or the asian market. The culture is different, gaming behaviour is different. And Blizzard always took the stance that special circumstances require special treatment. So whatever crazy you see happening in Korea does not translate to the rest of WoW. Christ, get real people...

There is a significant difference between PR or spin and flat out fraud and lying. Everything Blizzard has said in regards to free to play and microtransactions has been the gods honest truth whether players want to believe it or not. Or are you claiming Blizzard is lying when they said things like transmog helms weren't terribly popular in the NA/EU regions? What is so blindingly stupid is that Blizzard is actually straight up agreeing with many against microtransactions and yet they still accuse them of lying.

[Slant]

WoW won't go F2P for a very long time. Sure, the Asian market pays differently then the rest of the world, but even if 75% of their market is in the Asian market, that leaves 25% or almost 2 million non Asian accounts. That's roughly $28.9 million a month or $346.5 million a year they'd still be raking in by not going free to play.

And they're paying how much for servers, personnel (customer service mainly) and promotion? I'm not saying they're not filthy rich and deseve to be despised, but these napkin calculations in forums are equally disgusting. We don't even know exactly what the running costs are. They might be a joke, but considering how stable the servers have been for years, I'd say they're investing a ton of money into infrastructure. You can hate on Blizz as much as you like - and trust me, I do - but don't be disrespectful. Look at the other MMO crashes and flops and how their servers run. Best example would be SW:ToR and cast lag. Anyone having experienced that will back me up. It's a nightmare. Apart from EvE Online, GW and Everquest I've not seen one serious contender in the MMO market. Not one.

[xanzul]

Just an example of how this doesn't work as you think it does. How do you calculate sub numbers and the projected revenue? Well... let's go:

1. Include people that just bought the game and are on their trial, they paid 50 bucks didn't they? Or don't include them... huh
2. Include people that are returning players or not... hmmm
3. Include active players only... or just take anyone playing the game no matter how, everyone has access to the store, right?
4. Count unique players or not. That would take some of those pesky double or triple accounts out of the equation that only makes it complicated.
5. How do you count asian gamers that pay in an internet cafe by the hour? Is it one account per computer? Or one account per player? How much does he leave per month at the clerk? Or do you count the business that runs the cafe?

You see, those are all valid variables. And however big or small I want the number of subs, I can twist it to fit EXACTLY what I need. Talk to your trusted broker about how numbers can be manipulated in a perfectly legal way to get you whatever number you want. As long as Blizzard stays within a realistic ballpark swing, you'll pay more to prove they're a fraud than they lose money if you win.

Just sayin' man. Don't get so worked up over someone saying a company is not 100% honest. They rarely are. They're out there to make money. And they'll use every inch of law they can abuse to make more. And laws are only there to prevent the worst things from happening. Not from businessmen creating opportunities by cheating a little. Otherwise none of you would ever buy a computer for 1k bucks that only costs like 50 bucks in material and has been researched 5 years ago, because they're not going to spoonfeed you the latest technology unless the competitor is pushing them to do so. And that goes for every industry.

Edit: Also, I think you need to look up the word corruption.

Paying subscriptions are paying subscriptions regardless of who they are, where they live, how much they pay, why they pay, why they play, how many accounts they have, how much they play or any other such nonsense used to downplay subscription numbers. The only accounts involved in subscription numbers are paying active accounts. Period. End of story. It isn't up for debate.

[sourmonkey]

blizzard has always kept the F2P card in their back pocket, they do not need to use it as the current subscription numbers are steady . i say if it drops by another 2-3 million they may transition the game more into F2P but even then it is risky that still leaves roughly 5 million subscribers . the real issue would be if blizzard did not profit and started to cost money that's when activision would pull away and blizzard would be sold to the highest bidder can you envision the horror of what a potential perfect world international / blizzard would be like ? wow with a zen shop ? (okay snap outta it ) lol that aint gonna happen blizzard has the numbers to maintain a pay to play for quite a while .

[mistahwilshire]

Extremely old news and highly unlikely to ever make it to US/EU straight from Blizzards mouth. Nothing to see here.

[Slant]

There is a significant difference between PR or spin and flat out fraud and lying. Everything Blizzard has said in regards to free to play and microtransactions has been the gods honest truth whether players want to believe it or not. Or are you claiming Blizzard is lying when they said things like transmog helms weren't terribly popular in the NA/EU regions? What is so blindingly stupid is that Blizzard is actually straight up agreeing with many against microtransactions and yet they still accuse them of lying.

Yes. But what you're not seeing is that anyone - even a company - is entitled to change their opinion. And that doesn't make it a fraud. No one from Blizzard ever said that they would never change their strategy. All they ever said is that they were not thinking about it at that time. How so many people miss that nuance is beyond me. They always leave a backdoor open. Read their blue posts, it's a genius compilation of back doors. Everyone of the bigger ones that are about WoW business strategy or development. Key phrases like "At this time" or "in the future, we may" are quite worth a drinking game.

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Paying subscriptions are paying subscriptions regardless of who they are, where they live, how much they pay, why they pay, why they play, how many accounts they have, how much they play or any other such nonsense used to downplay subscription numbers. The only accounts involved in subscription numbers are paying active accounts. Period. End of story. It isn't up for debate.

Oh but it is, because to pamper their numbers they do actually count more than just "paid subs". They include all the asian accounts, of which none are subscription based as you know it. Now what? You have your definition of "players playing the game", they have theirs. And while I - nor anyone else - know exactly what the basis for their numbers are, I - and others - are fairly sure it's not just "paid subs". Because honest to god, without Asia, WoW never had close to 10 million paid subs. Ever.

[Asmekiel]

Oh but it is, because to pamper their numbers they do actually count more than just "paid subs". They include all the asian accounts, of which none are subscription based as you know it. Now what? You have your definition of "players playing the game", they have theirs. And while I - nor anyone else - know exactly what the basis for their numbers are, I - and others - are fairly sure it's not just "paid subs". Because honest to god, without Asia, WoW never had close to 10 million paid subs. Ever.

Doesn't matter if 1 person pays 50 million or that 10 million people pay 5 each. They aren't allowed to lie about.

[Slant]

Doesn't matter if 1 person pays 50 million or that 10 million people pay 5 each. They aren't allowed to lie about.

Um, ok I apologize, apparently I can't read and have assumed we're talking about sub numbers. Excuse my brain freeze.

[Thetruth1400]

And they're paying how much for servers, personnel (customer service mainly) and promotion? I'm not saying they're not filthy rich and deseve to be despised, but these napkin calculations in forums are equally disgusting. We don't even know exactly what the running costs are. They might be a joke, but considering how stable the servers have been for years, I'd say they're investing a ton of money into infrastructure. You can hate on Blizz as much as you like - and trust me, I do - but don't be disrespectful. Look at the other MMO crashes and flops and how their servers run. Best example would be SW:ToR and cast lag. Anyone having experienced that will back me up. It's a nightmare. Apart from EvE Online, GW and Everquest I've not seen one serious contender in the MMO market. Not one.

I honestly wish I understood what you're going on about there. Sure, they have costs, but it doesn't take a genius to figure out that they're making a ton of money, even with the game in the state it is. Sub numbers declining means staff reassignments / layoffs / no additional hiring. They're not going to maintain a staff capable of servicing 12 million customers when they only have 7 million. A company like that would be going out of business sooner rather then later. Additionally, they're in the process of buying out Vivendi of their shares of Activision / Blizzard stock. If they weren't making an absurd amount of money, they wouldn't be doing that. They'd leave Vivendi stuck with a struggling company.

Sure, they do have costs in servers, staff, etc. which we don't have access to, but we do know a few things. Their profit as of Aug 2013 was up 75% or $324 million dollars. That money didn't just magically spawn in their bank account. The yearly projected value of Activision / Blizzard is $4.31 Billion.

Again, they're doing fine with money. I'm not hating on Blizzard at all, I'm supporting them. They're smart enough to know that a F2P model is completely stupid on their part because they're raking in cash, hand over fist with their current model. Sure, when the games starts costing them money instead of making them money, they may go F2P, but, again, that's a long way off.

[Asmekiel]

Um, ok I apologize, apparently I can't read and have assumed we're talking about sub numbers. Excuse my brain freeze.

I haven't actually read the whole thread, but I did see shareholders being mentioned. Doubt shareholders care about the actual subscription numbers more than they do about the latest revenue and profit charts.

[Slant]

I haven't actually read the whole thread, but I did see shareholders being mentioned. Doubt shareholders care about the actual subscription numbers more than they do about the latest revenue and profit charts.

For future predictions and microtransactions, I think numbers of players are highly relevant, don't you agree?

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I honestly wish I understood what you're going on about there.

It's a little crusade against simply stacking up sub numbers times monthly fee and throwing it out there like that's the answer. It isn't. People dream about gigantic numbers that Blizzard generates and immediately feel entitled to more in the game. So I'm not actually disagreeing with you, just putting out there that people don't take your number and base assumptions simply on that, because it isn't that easy.

[Asmekiel]

For future predictions and microtransactions, I think numbers of players are highly relevant, don't you agree?

To a degree, but you can find those numbers back in the revenue changes. Anyway, I just posted to point out they're not allowed to lie about certain things. You can find me in fun stuff if you need me.

[Pann]

Blizzard is a company, it is illegal for them to lie about their profits. The shareholders would sue if they were being told false information, and the various agencies set up to combat business corruption would shut them down ...

There is a huge difference between telling your customers one thing and then doing another, such as saying there will be no transfers from PVE to PVP realms and then allowing them, and what you are talking about. One is fraud the other is changing policy.

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Extremely old news and highly unlikely to ever make it to US/EU straight from Blizzards mouth. Nothing to see here.

Really? Is there any Blue post or Tweet from a Blizzard employee that backs this up?

[Oppressionix805]

It would be stupid on their parts to go FTP anytime soon. I know if they do go F2P I will never play WoW again.

it is very valid they may go free to play in the asian side of the world, due to the fact they they are drastically losing subscriptions there, I mean 80% of subs are now North American subs alone... wouldn't surprise me to open free to play in Asia

[Slowpoke is a Gamer]

We knew this was coming to WoW Asia since 5.4 went on the PTR.

No doubt this is coming to the US if subs don't pick up into the start of next expansion.

[Deficineiron]

Well I had a quick look on through Activision Blizzard's investor site.

In particular their SEC filings that AFAIK constitute a federal document for which they are dire and severe consequences for lying on.

I have several issues with the linked article from Super Data Research

1) It uses an odd choices of months to compare. April 2013 and November 2012

Activision Blizzard only release GAAP Net Revenues by Segment/Platform Mix for three month periods , not separated out into one month periods.

2) Why those two months ? The article was released in September 2013 where you have a selection of these quarterlies to use data from : End of June 2013 , End of March 2013 , End of December 2012 , End of September 2012

3) Given that Activision Blizzard released revenue amounts include things like Call of Duty elite memberships , Skylander Toys and other Activision related sales how have they separated the Activision part out ?

4) Looking at the quarterly reports & annual reports I have no idea where they're getting their figures from. According to :

http://investor.activision.com/secfi...104659-13-8490

Their online subscriptions revenue for the 3 months ending December 31 , 2012 was $285 Million , not the $612 million per that quarter as they would have you believe (IE If they've estimated April by taking the June 2013 amount and dividing by 3 it follows to reason that if they made $204 million in Nov 2012 , times that by 3 for the quarterly figure amount)

AB's annual report :

http://investor.activision.com/commo...ual_Report.pdf

Lists their online subscriptions as $986 million for the entire year.

haven't gone into detail into this particular item but have spent a lot of time in atvi10q's in the part with regard to wow. its very possible, excluding the spikes from expansion sale periods, that wow quarterly revenue is down well over 25% from its peak. If anything, it is amazing they kept it so high for so long, value-added sales must just be huge to support the number when they have easily lost 35% of the western playerbase since late bc/early wotlk.

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it is very valid they may go free to play in the asian side of the world, due to the fact they they are drastically losing subscriptions there, I mean 80% of subs are now North American subs alone... wouldn't surprise me to open free to play in Asia

80% of subs in north america??!! this is wildly imaginative fiction!

think between 1.5-2m north america, slightly less europe.

[Sierra85]

No doubt this is coming to the US if subs don't pick up into the start of next expansion.

i don't think subs will matter, it's coming regardless. It makes too much financial sense. Blizz will keep their subscription model going as long as they can and have these microtransactions as well. Why wouldn't you?