Tobold's Blog
Tuesday, December 14, 2010
Numbers and interpretations

Blizzard announced that they sold 3.3 million copies of Cataclysm in the first 24 hours. That is a number. Numbers are easy, because they are either fact or false, so beyond "I don't believe this number is correct", there isn't much room for discussion.

Where it gets complicated is when you try to interpret the number, and put a judgement on it, saying whether this number is "high" or "low". So about the Cataclysm sales you'll read every possible interpretation from this being very high, compared to the 2.4 million copies Burning Crusade sold in its first 24 hours, or this being low compared to the 12 million subscribers they say they have.

Interpretations are often only half supported by facts, with the other half being made up by some assumption. In some cases the assumption is clearly wrong, for example the comparison between the 3.3 million Cataclysm buyers and the 12 million subscribers isn't valid, because we know that around half of the subscribers could not possibly have bought Cataclysm, because it wasn't released yet in China (and won't be for some time, they only just got WotLK). On the other hand Cataclysm certainly led people who *weren't* subscribers in October, when Blizzard released the 12 million subscribers number, to buy the expansion and resubscribe.

Whether 3.3 million first-day buyers are high or low thus depends on other assumptions, and a lot of missing data: How many people were subscribed to World of Warcraft in the countries where Cataclysm was for sale the day before the expansion? How many people resubscribed? And even if we had numbers here, it would still be hard to interpret: If we assume 6.6 million subscribers in Europe and America, and half of them bought Cataclysm on the first day, what does that tell us? I'd assume a lot of people simply weren't too keen on playing on the overcrowded first day, but bought the expansion in time for the weekend. I'd also guess that some people will find a copy of Cataclysm under the Christmas tree. And while I'm watching my wife playing a level 75 rogue in Northrend (in spite of me having bought the expansion for her), I'll also have to assume that some people simply decided they can play World of Warcraft without the expansion.

So in the end this number, 3.3 million first day buyers, isn't all that meaningful. Accountants might be interested by the over $100 million of gross revenue the number implies for Blizzard. But for an evaluation of the "success" of the expansion we'd better wait for the next press release from Blizzard announcing some new subscriber number record.
I feel hurt because I let Blizzard down. I couldn't afford Cataclysm on release, and only picked it up finally yesterday. I am ashamed to have hurt their numbers...

Are there any indications that Blizzard included digital download pre-sales into those first 24 hour numbers?

I ask that because the number of players on my server just dont reflect the increase in first-24-hours-sales from last expansion; when you look at player activity and compare both expansions during the same release timeframe(first week).
I think that because (1) it's the internet and (2) people like to debate things and (3) Blizzard/WoW is a polarizing topic among gamers, you tend to get people parsing the word "success" in very strange ways.

Selling over 3m within the first 24h is a great success in an absolute sense, period. Is it a better success than the WotLK launch was? As you say, we need more data to make that determination, but my own SWAG on that is the proper measure isn't really the penetration of the expac among existing subscribers, but the actual volume sold.

If Blizzard sold 3m in the first 24h, that likely means, as you point out, many more within the first week and certainly within the month of December --> it's likely already above 4m, and perhaps above 5m. By any measure that's a tremendous success, regardless of the penetration rate among existing accounts, because that is all $$$ in Blizzard's bank. Some would have it be a "failure" unless it had 100% penetration to all active accounts within the first 24 hours -- setting the bar for "success" too high, which is common on the internet, I think.
@Chris - the number includes all digital downloads in the prior two months, as well, according to their press release (not hiding it, at least).

What they did NOT say was how much of that 3.3M is actual sales on that day. Peeps may say that's a fine point, but the press release DOES boast "first day sales". I just think it ought to be clear on which portion since they do acknowledge that part of those first day sales are, in fact, not first day sales, but prior.

Since they're not being loud about that, I suspect that a substantial portion of those sales were prior digital, and that it may have even taken actual first-day sales below 2.4 mil, which would be embarrassing if framed a certain way. Otherwise I'm certain they'd be pretty blabby about it. PR flaks are like that.
Digital pre-orders are no different - in theory - to retail pre-orders. How many people of the 2.8 million who got Wrath in the first 24 hours actually ordered the game 6 months beforehand from Amazon or whereever?

Also, if the digital pre-order hadn't been avavilable, would it have affected sales that much? Surely the people who bought it would have got it elsewhere too?
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I'd say that getting 3.3 million sales on a game on its first day, including pre-orders, is very significant. Many many developers would be more than delighted at that, heck if the Star Wars MMO had 3.3 million sells on day 1 including pre-orders we would see it as an enormous success so far.

3.3 million is over half the population of the country I live in after all.
Are you guys sure those numbers include digital downloads? NDP numbers have *never* included digital downloads sooooo unless specifically stated otherwise I don't think that 3.3 million includes them.
Ah scratch what I just said. Those aren't NDP figures. Thats from a Blizzard press release. So yup they include digital downloads.
@DraconianOne - That's a very good point. When you look at it that way, digital prepurchase *is* pretty much the same deal, except, of course, it's already on your hard drive on launch day.

It's still interesting that they didn't call them out seperately, though. After all, they know *exactly* how many were digital preloads.

Spinmeisters, huh. :)
The main thing that i care about is whether Blizzard is making a profit out of all this and what are they doing with these profits.

Are they using it to improve WoW? Does good sales for Cataclysm implies they will be willing to make these kind of "improvements" more often ? Does it mean they will get more resources to do all this FASTER?

Or is all this money going towards the fabled Titan MMOFPS or Diablo 3 ?

Ultimately there's nothing more disturbing to me if i know a company is making money grow on trees , yet i hear things like "not enough resources to focus on this project" or things getting delayed or dropped for similar reasons.
@ Grimmtooth

I agree. I think they should have broken it down to show how much of an effect the digital pre-sales had on the "day one" numbers, because 2 months of sales before the "go live" date HAD to have a substantial effect on those numbers. Now, this isnt a question of delivery method, but one of how much spin is being put on these numbers to affect potential investor or current stockholder interests.

There's a big difference if the 3.3million represents a timeframe of ~2 months instead of an actual 24-hour period.
So if I preorder a game it doesn't count as release day sales? What about if I pay partial up front, then does only part of my payment count?

So then when I buy movie tickets a week in advance those shouldn't count for box office sales numbers? You guys are seriously just looking for something to argue about now.

What does it matter if part of that money was from presale... I would be willing to bet 99% of all video games sold on release days are from presale customers.

Digital versus hard copy games sold would be intersting, but you guys are really trying to split hairs now.
Obviously 3m in a day is a phenomenal success, as extrapolating that out it seems likely they will reach near or all of their subscriber base in sales.

Anyone disputing that frankly is missing whats right in front of them.
Went to target the other day, easily 50 boxes of Cataclysm available.
Of course first-day sales are up. Digital download made it far easier and more reliable to buy on the first day than ever before.

If I was a shareholder, I'd be asking if those sales cannibalised later first-and-second-month sales, or if they actually represent new customers.

Yes, it's a hell of a lot of sales, but as a headline "Lots of people want to play World of Warcraft" ain't exactly hold-the-front-page material.
No, new customers would be measured with a release of how many Vanilla, BC and WotLK sales they made.
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