www.Tobold.com
Tobold@GMail.com
A blog with my thoughts regarding games I am playing and other stuff in life. Please read my Terms of Service
RSS Feed
Friday, September 28, 2012
Integrals
In mathematics an integral is basically the area under a curve. If the curve represents something real, like time on the x-axis and something with an economic impact on the y-axix, the integral also represents something real, like real money. Now Wired just posted a really nice curve which is starting to catch the attention of bloggers. It shows the subscription numbers of World of Warcraft over the years. But somehow people are missing the integral. If you count the squares covered by the curve, you'll see there are over 66 of them. And each of them represents 1 million "subscriber years".
Of course this is all subscribers combined, and people in different regions pay different amounts of money for one year of subscription, up to $200 per year. The average is probably closer to $100, given that half of the subscribers are Chinese who pay a lot less. But whatever your estimate is for the revenue from one "subscriber year", if you multiply it by 66+ million you end up with a huge number, most probably over $6 billion.
Wired has chosen a moment to end that curve which corresponds to it pointing downwards. Which is somewhat misleading, because whatever you might heard or think about Mists of Pandaria sales, it is absolutely certain that for the coming months the subscription numbers of World of Warcraft will go up again. Maybe by not as much as the subscriber peak after previous expansions, and maybe not for long, but there *will* be a peak. Nobody can possibly pretend that WoW will have less subscribers in the first quarter of the new expansion than in the last quarter of the previous one.
But even if you did the scientifically worst possible extrapolation and projected a linear decline on the slope of the end of Cataclysm, you'd still end up with another 4 years and more than $1 billion more in revenue for Blizzard. A far more likely exponential decline with occasional peaks from expansions every 2 years will see World of Warcraft "dead" not before 2020, and Blizzard making at least $2 billion more money from it.
And in the end it is those billions of dollars that count. Take any other MMORPG and plot the money it made over the years, and all those curves will look rather puny compared to World of Warcraft. For a lot of games it took not 7 years to peak. Hell, many of the newer ones didn't even reach 7 weeks before declining. And no other games peaked at making a billion dollars a year: Either they had far less subscribers, or they had a different business model in which millions of players each paid a lot less on average for playing their game.
World of Warcraft is a game that dominates at least a decade of the MMORPG market. It has a huge impact on the state of that market, on how we think about what a MMORPG is, and on how future MMORPGs will be designed. It would take an extreme amount of hate and narrow-mindedness to just point at the last part of the curve and pointing a finger at the decline in Schadenfreude. Unfortunately the internet isn't short on hate and narrow-mindedness. But if you are wishing a game with 9 million subscribers to die, you shouldn't be surprised if some other game can't be saved by 20,000 petitions.
Of course this is all subscribers combined, and people in different regions pay different amounts of money for one year of subscription, up to $200 per year. The average is probably closer to $100, given that half of the subscribers are Chinese who pay a lot less. But whatever your estimate is for the revenue from one "subscriber year", if you multiply it by 66+ million you end up with a huge number, most probably over $6 billion.
Wired has chosen a moment to end that curve which corresponds to it pointing downwards. Which is somewhat misleading, because whatever you might heard or think about Mists of Pandaria sales, it is absolutely certain that for the coming months the subscription numbers of World of Warcraft will go up again. Maybe by not as much as the subscriber peak after previous expansions, and maybe not for long, but there *will* be a peak. Nobody can possibly pretend that WoW will have less subscribers in the first quarter of the new expansion than in the last quarter of the previous one.
But even if you did the scientifically worst possible extrapolation and projected a linear decline on the slope of the end of Cataclysm, you'd still end up with another 4 years and more than $1 billion more in revenue for Blizzard. A far more likely exponential decline with occasional peaks from expansions every 2 years will see World of Warcraft "dead" not before 2020, and Blizzard making at least $2 billion more money from it.
And in the end it is those billions of dollars that count. Take any other MMORPG and plot the money it made over the years, and all those curves will look rather puny compared to World of Warcraft. For a lot of games it took not 7 years to peak. Hell, many of the newer ones didn't even reach 7 weeks before declining. And no other games peaked at making a billion dollars a year: Either they had far less subscribers, or they had a different business model in which millions of players each paid a lot less on average for playing their game.
World of Warcraft is a game that dominates at least a decade of the MMORPG market. It has a huge impact on the state of that market, on how we think about what a MMORPG is, and on how future MMORPGs will be designed. It would take an extreme amount of hate and narrow-mindedness to just point at the last part of the curve and pointing a finger at the decline in Schadenfreude. Unfortunately the internet isn't short on hate and narrow-mindedness. But if you are wishing a game with 9 million subscribers to die, you shouldn't be surprised if some other game can't be saved by 20,000 petitions.
- posted by Tobold @ 9:55 AM Permanent Link
Comments:
<< Home
Newer› ‹Older
Nice post – thanks.
World of Warcraft is almost certainly on a long-term path of decline now. Anything else would be sensational. In a way, though, it really is a pity. More and more, I'm feeling that the game now is better than ever before. The balance, the quest design, gameplay: all that is now smoother than ever before. With the drastic spawn rates in heavily populated zones, the difficulty level has even turned back up a bit (although I fear that may not last for my alts).
And in spite of those improvements, I still find myself returning to the battle pet chasing. Odd!
Sorry for this overly enthusiastic comment, and slightly off topic too. I appreciate that many readers here have tired of WoW and never want to go back. It is not my intention to rouse their negative emotions. My conclusion is just that it is interesting that the game is still actually evolving.
World of Warcraft is almost certainly on a long-term path of decline now. Anything else would be sensational. In a way, though, it really is a pity. More and more, I'm feeling that the game now is better than ever before. The balance, the quest design, gameplay: all that is now smoother than ever before. With the drastic spawn rates in heavily populated zones, the difficulty level has even turned back up a bit (although I fear that may not last for my alts).
And in spite of those improvements, I still find myself returning to the battle pet chasing. Odd!
Sorry for this overly enthusiastic comment, and slightly off topic too. I appreciate that many readers here have tired of WoW and never want to go back. It is not my intention to rouse their negative emotions. My conclusion is just that it is interesting that the game is still actually evolving.
Nobody wants WoW to "die". Lots of people want other MMO developers to stop trying to be WoW. WoW is fine so long as there's plenty more not-WoW to go around.
Also, profit is the be-all and end-all for privately owned businesses but for publicly-listed firms it's all about growth. Pointing at how much money you're still making from your old, declining operations cuts no ice with anyone who matters if you can't also point to how much more money you're making from your latest project.
Also, profit is the be-all and end-all for privately owned businesses but for publicly-listed firms it's all about growth. Pointing at how much money you're still making from your old, declining operations cuts no ice with anyone who matters if you can't also point to how much more money you're making from your latest project.
Pointing at how much money you're still making from your old, declining operations cuts no ice with anyone who matters if you can't also point to how much more money you're making from your latest project.
I am pretty sure Blizzard made shitloads of money with Diablo III (they sold 3.5 million copies on the first day), so I wouldn't cite their latest project as a concern.
Furthermore I cannot imagine a situation where Blizzard releases Titan and doesn't get over a million players from day one. And that is without knowing anything about Titan.
I am pretty sure Blizzard made shitloads of money with Diablo III (they sold 3.5 million copies on the first day), so I wouldn't cite their latest project as a concern.
Furthermore I cannot imagine a situation where Blizzard releases Titan and doesn't get over a million players from day one. And that is without knowing anything about Titan.
The trajectory of any decline can be hastened or lessened by the advent of a 'replacement technology', so any decline that WoW will face will be due to its eventual replacement on the scene. My suspicion is that WoW will get replaced by something that is not a traditional MMO, and something that the gold farmers can easily gravitate toward. What that is, I've no idea, but I suspect that social media such as FB will play a role.
Now, all that said, while WoW may make oodles of money, the market won't be impressed if WoW doesn't reach the same heights as the early days of Cataclysm. The market doesn't care about how many billions WoW will still make, all it cares about is "what have you done for me lately". If WoW's numbers go back up but are not as high as Cata's peak, there will be questions on the next EA earnings call about "what are you doing to increase profits from WoW?"
In a way, Blizz can't win. Mists might be an improvement over Cata and it might get rave reviews, but if Blizz doesn't get everyone back and then some, the market will deem Mists a disappointment. If Mists does increase subs back to early Cata levels --earning market applause-- yet leaves a lot of people feeling "meh" after several months, the subs will then take a tumble anyway.
Now, all that said, while WoW may make oodles of money, the market won't be impressed if WoW doesn't reach the same heights as the early days of Cataclysm. The market doesn't care about how many billions WoW will still make, all it cares about is "what have you done for me lately". If WoW's numbers go back up but are not as high as Cata's peak, there will be questions on the next EA earnings call about "what are you doing to increase profits from WoW?"
In a way, Blizz can't win. Mists might be an improvement over Cata and it might get rave reviews, but if Blizz doesn't get everyone back and then some, the market will deem Mists a disappointment. If Mists does increase subs back to early Cata levels --earning market applause-- yet leaves a lot of people feeling "meh" after several months, the subs will then take a tumble anyway.
As you say, the curve looks at its worst now. You might visually project a decline to zero about 2017, but if you put in a Wrath-like small bump for two years, your visual projection of the end will be well into the 2020s.
And in practice, there will be a hard-core who will have to be forced kicking and screaming to quit - in WoW's case that may be over a million for all I know. WoW could be still running in 2050 IMO.
And in practice, there will be a hard-core who will have to be forced kicking and screaming to quit - in WoW's case that may be over a million for all I know. WoW could be still running in 2050 IMO.
Redbeard and Gerry answered the question, but perhaps unintentionally. The only WoW killer out there is Titan, because the only company with the resources to take on Blizzard, is Blizzard. WoW will be left to die, with it's diehard players a remaining rump once Titan is launched. No more patches or new content after Titan. As Bhagpuss put it the moneymen want to know how much money the new project will make, and I bet the projections for Titan are beyond WoW.
If WoW's numbers go back up but are not as high as Cata's peak, there will be questions on the next EA earnings call about "what are you doing to increase profits from WoW?"
Given how WoW isn't produced by EA, there is very little risk of that. :)
In the Activision Blizzard earnings call the answer will be "we will release Titan".
Lots of people want other MMO developers to stop trying to be WoW.
I think that is a problem of the developers confusing people wanting a game "as good as WoW" with them wanting a game "like WoW". Or simply not knowing how to make a game as good without carbon copying.
Given how WoW isn't produced by EA, there is very little risk of that. :)
In the Activision Blizzard earnings call the answer will be "we will release Titan".
Lots of people want other MMO developers to stop trying to be WoW.
I think that is a problem of the developers confusing people wanting a game "as good as WoW" with them wanting a game "like WoW". Or simply not knowing how to make a game as good without carbon copying.
Yeah yeah yeah.... I blame my snafu on the lack of coffee in my system.
The problem with the "we will release Titan" comment is that nobody knows what that entails. Activision/Blizzard may be a lot of things, but they aren't Apple; they probably wouldn't be able to pull that off like Apple could.
The problem with the "we will release Titan" comment is that nobody knows what that entails. Activision/Blizzard may be a lot of things, but they aren't Apple; they probably wouldn't be able to pull that off like Apple could.
I have no doubt that any new mmorpg released by Blizzard is going to sell many many copies. I do doubt that such a game will have the longevity and lifetime earning power of WoW. You yourself Tobold have used the phrase "the hype cycle" but whatever you call it the life-time of new mmorpgs has dramatically shortened.
they probably wouldn't be able to pull that off like Apple could
Apple pulls off new models punctually every year, but each new model has its own problems (antenna-gate, crazy maps, etc.). Blizzard is unable to produce anything on time, but like Apple you can be sure that whatever they release will be a bestseller.
Most likely scenario: 1) Mists of Pandaria not selling as well as Cataclysm
2) Blizzard will hide that fact for a while, profiting from the near-simultaneous release in China next week to still be able to announce huge sales numbers.
3) Investors start complaining next year when the quarterly results show that all isn't well.
4) Blizzard announces Titan officially next year. Release date: "When its done".
5) The next WoW expansion comes out in 2014, with even less sales.
6) Titan releases in 2015 or 2016.
Apple pulls off new models punctually every year, but each new model has its own problems (antenna-gate, crazy maps, etc.). Blizzard is unable to produce anything on time, but like Apple you can be sure that whatever they release will be a bestseller.
Most likely scenario: 1) Mists of Pandaria not selling as well as Cataclysm
2) Blizzard will hide that fact for a while, profiting from the near-simultaneous release in China next week to still be able to announce huge sales numbers.
3) Investors start complaining next year when the quarterly results show that all isn't well.
4) Blizzard announces Titan officially next year. Release date: "When its done".
5) The next WoW expansion comes out in 2014, with even less sales.
6) Titan releases in 2015 or 2016.
I have to admit that I am a burntout after playin WOW in Cata for the last 12 months. I'm not in any hurry to upgrade to Mop and really dont look forward to leveling more than one of the ten level 85's I play. I will upgrade in the next few weeks just to stay involved with my guilds and those I play with in WOW. Its worth the monthly fees just to stay involved but the number of hours I'll spend playing will most likely be at a much lower level that during Cata.
I see WoW going in one of two directions. We have the common prediction of a slow decline but I see another more optimistic future.
The hardware required to play the game is forever coming down in price. We will reach a point where tablets and the absolute bottom of the market laptops with integrated graphics will be able to play the game on fairly high settings.
I believe that at the moment we are halfway along the path from where the game originally needed a dedicated gaming deskptop machine to play it at an "acceptable" level to a point where practically every home in the western world will have a machine capable of that. Imagine a day perhaps 4 years from now at the end of the expansion that followed MOP where a €400 laptop can handle Ultra at 60fps.
You will see a decline and possibly the extinction of certain types of players that form the current player base but a whole new world of opportunities are being opened up as the game becomes accessible at an attractive visual level to a far wider audience.
At that point the greatest barrier to tapping into that market will be the subscription fee. With clever marketing and a F2P model I don't see why we can't see growth in player numbers. Whether that translates into greater revenue is another matter of course but it is possible if they get the business model right.
Think of the possibilities. Expand the new Farming feature, have player housing, virtual pets that need caring for and introduce paid XP boosts and the other types of items you see in the GW2 store and you have a recipe for continued success.
The hardware required to play the game is forever coming down in price. We will reach a point where tablets and the absolute bottom of the market laptops with integrated graphics will be able to play the game on fairly high settings.
I believe that at the moment we are halfway along the path from where the game originally needed a dedicated gaming deskptop machine to play it at an "acceptable" level to a point where practically every home in the western world will have a machine capable of that. Imagine a day perhaps 4 years from now at the end of the expansion that followed MOP where a €400 laptop can handle Ultra at 60fps.
You will see a decline and possibly the extinction of certain types of players that form the current player base but a whole new world of opportunities are being opened up as the game becomes accessible at an attractive visual level to a far wider audience.
At that point the greatest barrier to tapping into that market will be the subscription fee. With clever marketing and a F2P model I don't see why we can't see growth in player numbers. Whether that translates into greater revenue is another matter of course but it is possible if they get the business model right.
Think of the possibilities. Expand the new Farming feature, have player housing, virtual pets that need caring for and introduce paid XP boosts and the other types of items you see in the GW2 store and you have a recipe for continued success.
Wow will surely evolve. Don't be surprised when Blizzard comes out with a Pet Battle app for your phone? It is not the full wow experience, but still brings you into their world. Also consider farming additions in MoP. Wouldn't it be nice to have a phone app to check your farm? Buy/sell/trade? It's coming. A whole new generation of non-geeks awaits! Think of Azeroth as a platform with many apps as windows into it. Yes there will be some core raiders left over but the community will broaden to include non-typical MMO types.
Shawno, that farmville type stuff won't do much.
You can play a lot better games on your phone, and checking in on your farm... that ain't going to get the kiddies. That's junkie stuff.
WoW has been a tremendous success and certainly from a financial perspective it's a firehose shooting cash and will be for a very long time. No doubt about that. But there's also no doubt that it's lost a lot of energy and importance. I've never seen an expansion that had so little excitement going for it. It reminded me of the Star Wars prequels; nobody thought it was going to be good but they knew they were going to see it anyway, cause it's Star Wars.
Pandaria will sell a zillion copies because its Warcraft, but nobody seems all that pumped for it.
You can play a lot better games on your phone, and checking in on your farm... that ain't going to get the kiddies. That's junkie stuff.
WoW has been a tremendous success and certainly from a financial perspective it's a firehose shooting cash and will be for a very long time. No doubt about that. But there's also no doubt that it's lost a lot of energy and importance. I've never seen an expansion that had so little excitement going for it. It reminded me of the Star Wars prequels; nobody thought it was going to be good but they knew they were going to see it anyway, cause it's Star Wars.
Pandaria will sell a zillion copies because its Warcraft, but nobody seems all that pumped for it.
# posted by 
: 28/9/12 16:43
: 28/9/12 16:43
The funny thing is that all analyses I see at these comments forget something obious: Wow now have a real competitor, GW2...
Woody,
I'm not so sure about the graphics thing. WoW has always kept the "cute and simple" style, but in reality it is quite taxing on our graphics cards. One of my computers is already less than two years old. In the Wrath days, it would run at a solid 60 fps. Now it struggles to maintain 20. The game simply eats all the capacity you throw at it.
I'm not so sure about the graphics thing. WoW has always kept the "cute and simple" style, but in reality it is quite taxing on our graphics cards. One of my computers is already less than two years old. In the Wrath days, it would run at a solid 60 fps. Now it struggles to maintain 20. The game simply eats all the capacity you throw at it.
Wow now have a real competitor, GW2
According to XFire, GW2 has lost over 80% of its players already.
According to XFire, GW2 has lost over 80% of its players already.
Wow now have a real competitor, GW2...
Maybe its just the crowd I hang with, but I don't know a single person who has left WoW for GW2.
Also, The graph looks a little suspect to me. How often does Blizzard release subscriber numbers, and how much interpretation between data points is there? Are you telling me that Cataclysm's peak was on its release day? That there was no bump in subscribers at all in the months after Cata's release? I find that hard to believe. Or that the subscriber numbers stayed the same for all of 2009?
Maybe its just the crowd I hang with, but I don't know a single person who has left WoW for GW2.
Also, The graph looks a little suspect to me. How often does Blizzard release subscriber numbers, and how much interpretation between data points is there? Are you telling me that Cataclysm's peak was on its release day? That there was no bump in subscribers at all in the months after Cata's release? I find that hard to believe. Or that the subscriber numbers stayed the same for all of 2009?
# posted by : 28/9/12 17:25
: 28/9/12 17:25
Oscar, I have to agree. Ironically enough, my old core duo machine runs without hiccups for TOR, while WoW's 5.0.5 has some lag issues. I'm still scratching my head over it, since I'm in areas that ought not be affected (like SW or Teldrassil), so there must be something that Blizz did in the graphics engine to make the machine slow down.
I do think the decline in WoW is due largely to other games, but not on the way people think.
I don't think any individual game has surpassed WoW overall. However, I do think we have had a lot of games release with individual features that were clearly better than the comparable features in WoW.
After playing SWTOR, the storytelling in WoW feels not as good. After playing GW2 with the hearts system, quest hubs and linear quest zones feel not as good. The auction house feels not as good. Crafting feels not as good. Etc.
Overall, WoW is probably still the best MMORPG, but basically everything about it feels not as good as some other game.
I don't think any individual game has surpassed WoW overall. However, I do think we have had a lot of games release with individual features that were clearly better than the comparable features in WoW.
After playing SWTOR, the storytelling in WoW feels not as good. After playing GW2 with the hearts system, quest hubs and linear quest zones feel not as good. The auction house feels not as good. Crafting feels not as good. Etc.
Overall, WoW is probably still the best MMORPG, but basically everything about it feels not as good as some other game.
@woody - Lore said on Legendary that his current tablet is more powerful than the machine he started playing WoW on. Latest IPad is dual 1GHZ processors and quad graphics processors. Moore's Law is still working.
You can look at area under the curve as revenue. (/troll how many days of WoW revenue does it take to exceed the NPV of lifetime GW2 sales? 25? 35? Isn't each of the 66 MSY blocks equal to GW2 sales?) But it is not really since Blizzard has gotten increasingly better at monetizing non-sub (pets, mounts, transfers) Plus the digital sales increased revenue by reducing the retailers' cut.
The sun is also in decline. One can go to the mortality tables and estimate how many of the forum trolls will die before WoW quits being sold.
You can look at area under the curve as revenue. (/troll how many days of WoW revenue does it take to exceed the NPV of lifetime GW2 sales? 25? 35? Isn't each of the 66 MSY blocks equal to GW2 sales?) But it is not really since Blizzard has gotten increasingly better at monetizing non-sub (pets, mounts, transfers) Plus the digital sales increased revenue by reducing the retailers' cut.
The sun is also in decline. One can go to the mortality tables and estimate how many of the forum trolls will die before WoW quits being sold.
Who is GW2's competitor? (It's not completely off-topic since GW2 still comes up in most any MMO discussion. /usualdisclaimer GW2 is a good game. WoW is a huge success that is mature and plateaud/declining)
So Rift is clearly going head-to-head with WoW. IP means SWTOR slightly less so. LoTRO is a bit less since it is a different revenue model. I would argue that WoW's biggest competitor is probably GW2 but arguments could be made for LoL, and maybe WoT in some countries. But it does not have to be symmetrical: is GW2's competitor really WoW?
Every other game loses some time played whenever a new hotness ships e.g. SWTOR, D3, GW2, BL2, CoD99.
If WoW shut down, people would migrate to SWTOR, Rift, even Terra and SW. (dozens would even go outside.)
If they were not playing GW2, would people really be playing WoW? My cursory reading is many would go the LoL/WoT/Moba/console route? OTOH, what excites bloggers and posters is not that correlated to why the mass market plays and enjoys.
How much is WoW losing to competitors over alternatives? E.g. SWTOR & Rift are clearly competitors. WoW player-hours will be reduced when the new gen consoles hit, because there is some overlap and finite number of gaming hours. Yet it is hard for me to label that a competitor.
So Rift is clearly going head-to-head with WoW. IP means SWTOR slightly less so. LoTRO is a bit less since it is a different revenue model. I would argue that WoW's biggest competitor is probably GW2 but arguments could be made for LoL, and maybe WoT in some countries. But it does not have to be symmetrical: is GW2's competitor really WoW?
Every other game loses some time played whenever a new hotness ships e.g. SWTOR, D3, GW2, BL2, CoD99.
If WoW shut down, people would migrate to SWTOR, Rift, even Terra and SW. (dozens would even go outside.)
If they were not playing GW2, would people really be playing WoW? My cursory reading is many would go the LoL/WoT/Moba/console route? OTOH, what excites bloggers and posters is not that correlated to why the mass market plays and enjoys.
How much is WoW losing to competitors over alternatives? E.g. SWTOR & Rift are clearly competitors. WoW player-hours will be reduced when the new gen consoles hit, because there is some overlap and finite number of gaming hours. Yet it is hard for me to label that a competitor.
Somewhat OT. It remains utterly bewildering to me that people who seem sane and in control (and are not shareholders!) actually (and feverishly) care about how many billions a company of a product they consume makes. And if that magic number is in decline/rising and if so by what promillage. Im glad the years that i felt peer pressure for approval of my consumption behavior or the compelling need to defend it are nothing but a distant memory...It makes for some amusing (and lets face it, sometimes scary) reading though..
I've resubscribed to WoW for the expansion and will probably play for a month or two.
The quality of the expansion is great so far. I especially like the humor in the game, something I haven't seen in games like GW2 or SWTOR.
I'm curious what will be the next big thing after WoW. I expect it to be something different. Every WoW clone so far has failed hard.
The quality of the expansion is great so far. I especially like the humor in the game, something I haven't seen in games like GW2 or SWTOR.
I'm curious what will be the next big thing after WoW. I expect it to be something different. Every WoW clone so far has failed hard.
I'd say that if Mists follows the same trajectory (with a respectable 3 month bump for people trying pet battles, levelint to 90), Blizzard will indeed announce Titan.
The PR machine will start working and I don't think there will be any new expansions for WoW.
Post a Comment
The PR machine will start working and I don't think there will be any new expansions for WoW.
# posted by : 29/9/12 19:35
: 29/9/12 19:35<< Home
