Tuesday, September 16, 2008
WAR ships, Blizzard shares drop by 4 percent
From Ardwulf's Lair I got the news that WAR shipped 1.5 million copies, twice as many as AoC. Not bad, assuming they don't remain unsold on shelves. In other news Blizzard announced that Wrath of the Lich King will be released on November 13. Lots of people are trying to draw a connection between those events, but I don't think that is necessarily valid. I'll give you an example how easy it is to come to the wrong conclusion:
On the same day that WAR shipped, Activision-Blizzard shares dropped by 4 percent. "Hah!" the WAR fans will say, the shipping of WAR must be the reason for Blizzard's shares dropping, now that they get serious competition. Not so fast. Pretty much every share dropped yesterday, it was a day with the biggest loss on the New York Stock Exchange since 9/11. Electronic Arts shares dropped by 4 percent too; if WAR had been the reason that Blizzard shares dropped, there should have been a corresponding rise in EA shares. In fact it is much safer to say that the stock exchange completely ignored WAR shipping, it was just a coincidence that WAR shipped on the same day as the shares fell.
I am sure that Blizzard is aware that WAR is coming out. And if EA manages to sell those 1.5 million copies, plus the subscriptions going with that, it will rip a visible hole into Blizzard's earnings, because that would represent more than a quarter of their US/Euro customers (WAR isn't shipping to Asia yet). But frankly, I don't see Blizzard shaking in their boots. They are extremely confident about their products, and it was always clear that Wrath release will somewhat counter the WAR release, causing a spike in WoW subscriptions, and a dip in WAR subscriptions. November was always a good guess for the Wrath release date, I guestimated that date myself repeatedly on this blog. We can debate whether the date of the announcement is a dirty marketing trick, with Blizzard normally not giving us two months advance warning. But the release date itself probably depended more on intricacies of the Activision-Blizzard financial year reports than on Warhammer Online. Anyone remember Blizzard promising one expansion per year? If they release the second expansion 22 months after the first one, I wouldn't be talking about Blizzard releasing it *early* to counter a competitor. We should be talking about why Blizzard didn't release WotLK *before* WAR.
Having said that, I am fully aware that the Wrath of the Lich King beta is not in good condition. The WAR beta two months before release was a hell of a lot more stable than the WotLK beta is now. Blizzard still has a lot of work to do in the coming two months. The only thing I'm saying is that in a parallel universe without WAR, they'd probably fighting exactly the same problem with the same release date. Wrath isn't going to be released on November 13 because of WAR, it is being released on that day because it is bloody time, and players are quitting WoW out of boredom regardless of what other games are on the market.