Chinese yuan farmers

Some chinese farmed 212.2 million yuan ($26.3 million) with World of Warcraft in the fourth quarter of 2005, MSN Money reports. Actually thats the quarterly sales of The9 Ltd., the chinese company selling pre-paid WoW time to 3.3 million chinese customers. That works out to $8 per customer in 3 months, which is still a lot of money in China, but not quite as profitable as an US customer, who would pay up to $45 for 3 months.

Of those $26.3 million of sales, $8.5 were profit for the chinese company. Substract the actual cost of running the pre-paid system of a couple of millions, and there is something like $10 million to $15 million left for Blizzard per quarter, lets say $50 million per year. Divide by the number of customers, and Blizzard earns only $15 per chinese customer per year. And that is earnings, not profits, Blizzard still needs to pay for the servers, translation into chinese, and customer support from that money.

For a US customer, there is no middle-man, and Blizzard directly gets the $150 to $180 per year of monthly fees. So the 1 million US customers bring over $150 million per year of earnings, three times more than the 3.3 million chinese customers. And lets not forget the Europeans, which bring again about the same sum as the Americans. China is certainly profitable for Blizzard, but it is just a minor addition to the WoW money making machine, not its motor.
- posted by Tobold @ 10:37 AM Permanent Link