Earnings Call - WoW Classic: Biggest Quarterly Increase in Subs in History

[Gadzooks]

Too bad we got no new playable class which doesn't bode well for Q1 in 2020's numbers.

A new class wouldn't have any impact on the game until Q4 2020, Q1 2021. I don't understand what you're trying to say - Q1 is two months away, how would a class announcement have any impact, at all, except possibly pre-orders?

You can't use player expectation to look at these presentations. This is for investors, not players.

Now, what they said:
~We have more players
~Interest is returning
~We have long term focus, not short term

Sounds good. But what the investors might be looking at is:

~Where is income coming from in 2020?
~No new titles for at least 8-9 months, with the release of Shadowlands, possibly years with Diablo 4
~No release dates for existing products at their showcase at Blizzcon

ATVI is mainly attractive as a dividend stock. It's held by a lot of 401ks, as a result, the big traders for Fidelity and Blackrock hold ATVI, and pass it along to their customers. It's not a star in the day trading world, as it doesn't swing up or down, like nVidia or AMD. So, they're looking at the dividend for the next year. Will classic and retail - the primary form of income for Blizzard right now - be enough to hold up Blizzard's end of the ATVI stock?

Classic may have given them some breathing room, but it's another year of relying on the cash shop and Hearthstone packs for income if interest subsides. But that monthly sub and the cash shop is where the cash is.

For the Activision side, Call of Duty is also selling, and paying the bills.

But.

“Recent launches have enabled significant growth in the size of our audiences for our Call of Duty and World of Warcraft franchises,” CEO Bobby Kotick said in the earnings release.

Sounds good Bobby. But what are the expectations to keep that audience?

Kotick said management believes that as the company introduces more free-to-play titles based on popular franchises, Activision can increase the size of its audience and improve engagement and monetization across its franchises.

•Free to play
•monetization

Lootboxes and cash shops is the way forward for ATVI. Be afraid. Be very afraid.


“With a strong content pipeline and momentum in mobile, esports and advertising, we are confident we will remain a leader in connecting and engaging the world through epic entertainment,” he added.

So, the future for all of ATVI is mobile games (blech), esports (meh), and...advertising. And a pipeline that has no release dates and is far in the future for release.

Well.

The stock is down, and remains down in after hour trading. I'm not shocked. The analysts are meh on it, because while they beat expectations, the future of the companies they hold are unclear, with a distinct lack of new IPs and titles, which is usually the foundation of big growth for a company. They may hold steady with monetization, but they're not looked at as a rising star anymore, and are looking more stagnant in the gaming space. When D4 ships, it'll be a (hopefully) big payday. When Overwatch 2 ships, it'll be a (hopefully) big payday. When Shadowlands ships...well, who the hell knows. When Activision ships...anything, it'll be a big payday. And it's interesting King didn't get much mention in the presentation. I haven't looked at the whole thing yet, but they did make a big passle of money, and I'm sure they're not going broke any time soon, but as for growth...

Magic 8 Ball sez: uncertain.

New classes? Irrelevant, in the bigger picture.

[Bhanzai]

Space is limited, and they have 4 upcoming titles to talk about. I imagine that is the extent of why it didn't have it's own panel this year.

That and we already know what is coming out in each phase. A 45 minute panel on classic would have been useless and a waste of time.

As someone who only plays classic the only information I am interested in now is if they will be working on a burning crusade version. Its almost a certainty now.

We have classic. We know what is coming. No reason to waste a panel on it.

[Shelly]

Except Classic is a product released less than 3 months ago. It's still not fully rolled out. And the announcement here shows it be the single biggest WoW subscription driver ever. Why on earth wouldn't they have a panel of some sort on it? Why not do a simple Classic Q&A where they can interact with the fans? Get and give feedback. Engage with a passionate audience, one that is having a positive effect on revenue?

It's not a matter of Classic and Retail being in competition with one another. Nor is it saying that Classic is somehow bigger than retail. It's simply saying that the Classic product has proven itself worthy of some attention. At a Blizzcon where Blizzard was going in with a lot of bad PR, highlighting one of their few wins of the year and giving something back to that community might have been a good idea.

At most I'd have expected a five minute thing saying when Phase 2 would be rolling out, outside of that we already know all there is to know about Classic.

It's not a new game.

It's not a new product.

It's just there with a set internal schedule that's under the direction of the legacy team.

They did give something to the WoW community too. It's called Shadowlands. If they'd announced anything new for Classic at this point there'd be nothing but weeping and gnashing of teeth.

It's great that it's a subscription driver but Blizz is taking the hands off approach people wanted and expected. So don't expect too much outside of blue posts every now and again saying when the next phase will launch.

[Gadzooks]

But its the same budget, Wow. If resources is taken away from retail and more of it put into developing classic content or tbc wrath etc, we gonna get a even shittier retail game going forward.

And with your example.. Yeah, they doubled their investment. They spent 1 million and made 2. So 1 million in profit. Second example they spent 10 milliong and made 12. thats 2 million in profits. When did 2 million in profit become worse than only 1 ? Bottom line they made 2 million instead of 1. they made twice as much, even tho it was only 20% of the investment

I wouldn't hold your breath on new development on classic or TBC servers, if they happen. They have clearly kept to the path of simply rebuilding the game, not building on it. I forget who said it, but one of the people talking to the devs at Blizzcon said the team's attitude is "We rebuilt it, play it, it is what it is, and that's all it's going to be." The rollout to Naxx is enough of a driver to keep interest in the game. What happens after that, is unclear, but i do not in any way expect them to shift developers away from the live game, to the classic games. I think all of that is wishful thinking from the classic crowd, and while it's impossible to stop, I'm not falling for it. Blizzard has made no public plans or comments past getting to Naxx.

I think it's a sign that the Warcraft Remastered devs said "no retconning or new story" recently. I think as a whole, they're not even thinking about rebooting or adding onto old games, across the board.

[jellmoo]

At most I'd have expected a five minute thing saying when Phase 2 would be rolling out, outside of that we already know all there is to know about Classic.

It's not a new game.

It's not a new product.

It's just there with a set internal schedule that's under the direction of the legacy team.

They did give something to the WoW community too. It's called Shadowlands. If they'd announced anything new for Classic at this point there'd be nothing but weeping and gnashing of teeth.

It's great that it's a subscription driver but Blizz is taking the hands off approach people wanted and expected. So don't expect too much outside of blue posts every now and again saying when the next phase will launch.

I mean absolutely no offense here, but that's utterly ridiculous.

It's arguably the hottest property Blizzard has going right now, and certainly the one that has gotten the best good press in a long, long time. At a time when Blizzard is getting absolutely crucified for how they handled the Hong Kong fiasco, and at a time where goodwill for BfA has sunk lower and lower, not sparing 30 minutes to have an honest chat about the future of Classic is a massive missed opportunity. They didn't even need to have any answers. Just field some questions, get some feedback, and maybe offer some thoughts. They needn't have announced a single thing.

When we have discussion threads popping up all the time about how underwhelming Shadowlands is looking, and other threads that speak about how people are staying subbed just for Classic, it would be a good idea to actually be inclusive with that community. And it absolutely is a new product. It had a launch and everything. Giving it just the smallest amount of attention could have paid large dividends in terms of customer goodwill. When it is literally the only thing driving your subscriber numbers, it's utterly astounding that Blizzard didn't pivot their presentation in order to give it some attention.

[lortsy12]

...and likely attracted a number of returning players who will end up playing retail once they grow tired of Classic.

Really? Most Classic players aren't interested in retail WoW at all and will just quit WoW again altogether once they get bored of Classic. Most of Classic players haven't played retail in years, me included. They are two totally different kind of games.

[Argorwal]

I'm curious what the next quarter will have to say.

Remember, WoD saw a massive spike in subs for it a quarter...

- - - Updated - - -

At most I'd have expected a five minute thing saying when Phase 2 would be rolling out, outside of that we already know all there is to know about Classic.

It's not a new game.

It's not a new product.

It's just there with a set internal schedule that's under the direction of the legacy team.

They did give something to the WoW community too. It's called Shadowlands. If they'd announced anything new for Classic at this point there'd be nothing but weeping and gnashing of teeth.

It's great that it's a subscription driver but Blizz is taking the hands off approach people wanted and expected. So don't expect too much outside of blue posts every now and again saying when the next phase will launch.

And they did talk about phase 2 release and how successful classic was during the opening ceremony.


Before talking about retail or the Shadowlands trailer.

[lortsy12]

Yeah, nostalgia is powerful, but it dies sooner or later. Classic servers are emptier day by day.

It's clearly not just nostalgia. It's just that the current MMORPG market is in a sad state where a 15 year old game (even with all it's flaws) simply offers the best there is.

[Relapses]

Really? Most Classic players aren't interested in retail WoW at all and will just quit WoW again altogether once they get bored of Classic. Most of Classic players haven't played retail for years, me included. They are totally different kind of games.

That's a pretty wide sweeping generalization. Even if only 10% of Classic players convert to retail that's still a massive number of new players for the game. Since both games use the same subscription there's virtually no down side for Blizzard.

[lortsy12]

That's a pretty wide sweeping generalization. Even if only 10% of Classic players convert to retail that's still a massive number of new players for the game. Since both games use the same subscription there's virtually no down side for Blizzard.

I don't care about Blizzard, just like they don't care about their customers; only their profits. What I care about is if they make good games. WoW to me is a lost cause since I love the Warcraft lore and even if they somehow managed to fix the retail game and make the game actually good and fun again, the story and writing is an absolute joke so retail WoW is a lost cause to me personally. There is only hoping that they will release Classic TBC and WotLK servers in the years to come and that they don't fuck up Diablo 4.

[Greyvax]

I can tell you with confidence, that right now, retail will be completely flatlined. Literally ZERO reason to log in. Q4 numbers will be abysmal

[Bats]

Classic wasn't mentioned because it isn't important. That's not a hot take, it's reality. It achieved its goal of retaining existing players and likely attracted a number of returning players who will end up playing retail once they grow tired of Classic. Players expect OSRS levels of backpedalling from Blizzard but that was never its intended purpose. Classic+ definitely isn't happening and if TBC and WotLK is a possibility they're still waiting for populations to stabilize before announcing it. (BlizzCon 2020 would be the natural timeframe for such an announcement.)

It's funny how they literally say that classic is the cause of the biggest quarterly increase of subs in WoW's history AND during the Q&A they mentioned that subscriptions continue to grown in some regions with the release of DM. How can you sit there and type all of that after an official announcement that proves your speculations wrong.

Classic is massive success, people need to accept it and move on. Like it or not we now have official proof that it brought back over 2 million subscriptions. Thank you Blizzard for listening to your fans

[glowpipe]

It's funny how they literally say that classic is the cause of the biggest quarterly increase of subs in WoW's history AND during the Q&A they mentioned that subscriptions continue to grown in some regions with the release of DM. How can you sit there and type all of that after an official announcement that proves your speculations wrong.

Classic is massive success, people need to accept it and move on. Like it or not we now have official proof that it brought back over 2 million subscriptions. Thank you Blizzard for listening to your fans

We know it had a large influx of players, thats about it. They said nothing about the retention rate. But you can honestly see that yourself. Just look at the servers. There is no queues anymore. Finding members to groups take longer and longer. Classic sub has peaked. Its not gonna magicaly keep growing, It might have a small jump each new stage the release, but thats it. There is absolutely nothing that shows its growing. Server population you can check yourself is showing the complete opposite. Our classic guild went from over 400 people the first days on discord and ingame, down to 72 now, Not even half of them are showing to raids. We need to pug people because almost everyone left the game. Many people currently playing classic is doing that cause there is a draught in retail. Everyone on my friendslist is just waiting for 8.3 and play classic while waiting

You saw how insane it was the first weeks. So many players that you couldn't even move in the starting zones, You gotta be delusional if you think its anywhere near the amount players still playing

Remember that wod had the like second largest sub increase and bfa was the fastest selling expansion to date. Both are considered to be the worst expansions released. So you guys are reading way to much into the sub increase for classic and putting all your eggs into one basket

[Whiskyjack]

We know it had a large influx of players, thats about it. They said nothing about the retention rate. But you can honestly see that yourself. Just look at the servers. There is no queues anymore. Finding members to groups take longer and longer. Classic sub has peaked. Its not gonna magicaly keep growing, It might have a small jump each new stage the release, but thats it. There is absolutely nothing that shows its growing. Server population you can check yourself is showing the complete opposite. Our classic guild went from over 400 people the first days on discord and ingame, down to 72 now, Not even half of them are showing to raids. We need to pug people because almost everyone left the game. Many people currently playing classic is doing that cause there is a draught in retail. Everyone on my friendslist is just waiting for 8.3 and play classic while waiting

You saw how insane it was the first weeks. So many players that you couldn't even move in the starting zones, You gotta be delusional if you think its anywhere near the amount players still playing

Remember that wod had the like second largest sub increase and bfa was the fastest selling expansion to date. Both are considered to be the worst expansions released. So you guys are reading way to much into the sub increase for classic and putting all your eggs into one basket

Bfa was the fastest selling expansion by merit of it being out when digital sales had killed of brick and mortar stores for games.

Classic will die down and you do still see the rare queue on a few servers. I think a lot of players also log in less. When your leveling you are online constantly when your capped you kinda chill and just log in and out while gearing.

[Bats]

We know it had a large influx of players, thats about it. They said nothing about the retention rate. But you can honestly see that yourself. Just look at the servers. There is no queues anymore. Finding members to groups take longer and longer. Classic sub has peaked. Its not gonna magicaly keep growing, It might have a small jump each new stage the release, but thats it. There is absolutely nothing that shows its growing. Server population you can check yourself is showing the complete opposite. Our classic guild went from over 400 people the first days on discord and ingame, down to 72 now, Not even half of them are showing to raids. We need to pug people because almost everyone left the game. Many people currently playing classic is doing that cause there is a draught in retail. Everyone on my friendslist is just waiting for 8.3 and play classic while waiting

You saw how insane it was the first weeks. So many players that you couldn't even move in the starting zones, You gotta be delusional if you think its anywhere near the amount players still playing

It's true that it will not magically keep increasing, but that's the case for any recent WoW expansion or patch. Clearly launch day population is insane and then calms down. This isn't news to anyone and is nothing new when it comes to WoW.

You're giving me personal examples of what your friend list is like and that's fine. Mine is the opposite, most people are excited for the new classic phases and the new wow expansion. Not interested in 8.3.

The largest quarterly subscriptions growth in WoW's history is a very significant fact that is being talked down to. This is huge and wether or not players stay playing classic or retail in the future, it doesn't matter. What matters is that Classic WoW has brought back over 2 million players to the franchise and people need to stop living in denial.

[glowpipe]

It's true that it will not magically keep increasing, but that's the case for any recent WoW expansion or patch. Clearly launch day population is insane and then calms down. This isn't news to anyone and is nothing new when it comes to WoW.

You're giving me personal examples of what your friend list is like and that's fine. Mine is the opposite, most people are excited for the new classic phases and the new wow expansion. Not interested in 8.3.

The largest quarterly subscriptions growth in WoW's history is a very significant fact that is being talked down to. This is huge and wether or not players stay playing classic or retail in the future, it doesn't matter. What matters is that Classic WoW has brought back over 2 million players to the franchise and people need to stop living in denial.

and there was never any doubt that many was going to try it. So there is no denial there. The people in denial here is the people who still think its 2 million and rising

[Sensa1]

This is exactly what many of us tried to tell the Classic haters...be happy that Classic exists...it's breathing new life into the Franchise and attracting new players (some of which will progress to Retail). This all benefits Retail because Classic has near zero future development costs and Blizzard will use the majority of the excess profit and engagement from Classic to fund Retail because they can monetize Retail better (Box Sales / Cash shop etc).

That increase in Subscriber numbers was basically solely driven by Classic because there wasn't enough going on in Retail during the period to remotely drive that type of Subscriber increase (a record one at that).

It wasn't a given that Classic would be a success. This notion that not having to pay for the game again (box sales) was largely responsible for Classic's success because it was part of the current subscription is just stupid. People still had to re-subscribe and pay for essentially a 15 year old game to set that record increase in subscribers. This wasn't Retail players already paying a sub dabbling in Classic that set the subscriber increase record it was people returning to the game that were unsubscribed or had never played before. Sure some then tried Retail but that, as above, is a side benefit of Classic.

Lastly, personally, I would have payed a Classic Box price (even though I had already paid for the original). I also only subscribed to play Classic (I might log into Retail once to do the original Anniversary AV though I haven't yet) but otherwise have not logged into Retail (5 toons) since resubscribing for Classic. Won't be buying Shadowlands either. Many of my friends, who also played Retail (including BFA) for many years are also only playing Classic.

[Cthulhu fhtagn]

Azshara's palace opened up in july too, not saying it was the bigger reason for the highest quarterly increase, but there's never been a quarter with 2 releases at the same time. Especially two things aimed at so different audiences. The previous quarter had nothing new. There just seems to be always a new thing they put in the quarterly reports to make em look good.

[arandomuser]

Too bad we got no new playable class which doesn't bode well for Q1 in 2020's numbers.

if they fix enough specs we can have more playable specs than BFA, maybe enhancement shaman or survival hunter to list, maybe even feral druid? havent seen any of those much either

[Relapses]

I can tell you with confidence, that right now, retail will be completely flatlined. Literally ZERO reason to log in. Q4 numbers will be abysmal

I'm going to log in 31 million times just to spite you.