WoW Subscription Modeling by Monthly Fee and by Expansion Cost / Frequency

[Jaylock]

There's been a lot of controversy about subscription costs, expansion costs and the frequency of expansion release cycles, so I thought I would do a little financial modeling (after all, my profession is a financial analyst)

Based on current subscription fees, and expected Expansion Release time frames, and heres what I came up with:

First here are the average monthly subscription models Blizzard offers in the US:

Monthly-----3 Months-----6 Months
$14.99-------$13.99-------$12.99

Assuming Blizzard went to a 1 Year Expansion release cycle, we get the average monthly expansion cost (assuming expansions will cost $50)

$50 / 12 = $4.17 per month.

So the average monthly subscription cost including expansions using each of blizzard's monthly sub models would be:

Monthly-----3 Months-----6 Months
$19.16-------$18.16-------$17.16

Assuming Blizzard went to a 1.5 Year Expansion release cycle, we get the average monthly expansion cost (assuming expansions will cost $50)

$50 / 18 = $2.78 per month.

So the average monthly subscription cost including expansions using each of Blizzard's monthly sub models would be:

Monthly-----3 Months-----6 Months
$17.77-------$16.77-------$15.77

Assuming Blizzard continues the current Expansion release cycle of roughly 2 years, we get the average monthly expansion cost (assuming $50)

$50 / 24 = $2.08 per month.

So the average monthly subscription cost including expansions using each of Blizzard's monthly sub models would be:

Monthly-----3 Months-----6 Months
$17.07-------$16.07-------$15.07


As you can see, it benefits Blizzard GREATLY to decrease the time between expansion cycles because they will be averaging $2.09 more per subscription, per month, if they release them one year apart.

Now discussion can be made for how much value you are actually getting with each of the three examples I have here for expansion release cycles. If blizzard spread out content patches roughly 6 months apart for major content, and gave smaller patches in between, then the obvious best value would be the 2 year expansion release cycles. However the argument can also be made that the value of seeing new environments, new continents, new worlds every 1 year, is better and worth the extra $50 per year.

I take the medium ground here. I would like to see them release expansions every 1.5 years, and release 3 tiers of content during each expansion. It would:

a) Feel like the expansion is long enough that we got enough game-play from the new continent / world

b) Enable them to have Raid Tiers roughly 6 months apart, and it wouldn't feel like huge content droughts like the one we have going on now

c) After 6-7 months of the last tier of the expansion, it would be a huge refreshment to level up again in completely new environments and start the next journey.


I know this is a lot of info, but it gives you an idea of what kind of value you are getting for your dollar (only in terms of your sub fee and expansion cost by release cycle).

There are ton of other factors that come into play, digital deluxe and collector's editions will certainly increase their monthly margins dramatically with faster expansion release cycles.

/discuss