Monday, February 16, 2009
Can Blizzard fail?
From the open Sunday thread comes an interesting discussion on whether Blizzard's next MMO could fail. Short answer is yes, it could fail, you just need to define the criteria of success high enough. For example it is totally possible that their second MMO doesn't get 11 million subscribers, so some people will define not beating World of Warcraft as failure (by which criteria all other MMOs are failures).
One reader had the theory that the larger a project is, the more likely it is to fail. He cites the Great Leap Forward of Mao or the NHS computerisation programme as examples. But if you read the cited article, it becomes clear that both of these failed because somebody with lots of power and a great vision tried to make a huge system do something it couldn't do, something completely new and different. Does that sound like Blizzard to anyone? It is far more likely that Blizzard will be playing it safe with their next MMO: They will take lots of old ideas that have already been proven to work, and implement them much better and with more attention to detail than anyone else. In an industry where shoddy workmanship is the rule, and quality is the exception, making quality games is as close as you can get to being certain of success.
But as I said, success also depends on how you define it. World of Warcraft was revealed to have had a total investment cost of $200 million, and it makes an annual revenue of $1 billion, with $500 million of that being profit, which is a return on investment (ROI) of 250%. Such a level of success is unlikely to happen again, not without killing WoW, which wouldn't be in Blizzard's interest. But the good news is that a ROI of 25%, ten times less than WoW, would still be a very good investment. And for a game costing $200 million, that would mean a profit of $50 million, and assuming the same profit margin, revenues of $100 million, which at about $200 per player per year ends up being just half a million players. Anyone remember Mark Jacobs defining success as having over half a million players?
So the most likely situation is that Blizzard brings out a new MMO, it gets more than half a million players, but less than 11 million, and some people will call that a success, and others will call it a failure. As somebody commented, some people *want* Blizzard to fail, and will just interpret anything as failure in the light of that. Me, I'll stick to that half a million players success criteria. And to one even more important: Am I having fun when I'm playing Blizzard's next game?