Tobold's Blog
Wednesday, May 29, 2013
 
How do you delay something that hasn't got a release date?

I must admit I am somewhat puzzled by the news that Blizzard is rebooting their development of Titan and delaying it to 2016. Did it ever have an announced release date *before* 2016? I mean, if Blizzard came out with a huge presentation tomorrow showing lots of features of Titan and screenshots and all, at their usual development speed it would still take until 2016 before the game was released. So in fact we moved from "game we know nothing about with no release date" to "game we know nothing about with a targeted 2016 release date". For "targeted 2016 release date" please read "likely 2018 release date".

I wonder how much of that "delay" is due to World of Warcraft. In the MMO blogosphere people tend to completely misrepresent World of Warcraft. I've been seeing "World of Warcraft is dying" posts since 2004. I think there is a certain dislike of WoW due to burnout, plus an inability of some people of wrapping their head around big numbers. The simple truth is that WoW is down about a third of subscribers from its peak in its 9th year. As most other games lose over half of their subscribers after the first three month, that is quite an achievement. And with over 8 years of data to go on, we can extrapolate into the future.

Barring really unforeseen events, World of Warcraft will still have millions of subscribers in 2018. Less than today, certainly, but still enough to be extremely profitable. It will most probably never hit its previous peak again, but the 2014 and 2016 expansion will provide upward spikes in an overall decline. I'd say roughly 2 million subscribers left in 2018, but depending on the expansions it could be anywhere between 1 million and 4 million.

Thus Blizzard has to take into account the unfortunate possibility that Titan could be a "WoW Killer". Not just because players would quit WoW for Titan. But also because presumably at some point the majority of resources would go to Titan, while WoW would be put on life support with a skeleton crew. No wonder they are in no hurry to see that happen. It isn't as if there was any other game likely to push WoW of its throne.

Comments:
Considering the insane popularity of Diablo 3 (at least in the first month/s of its pre- and post- launch) I'd say that many of the so called "lost" subscribers just left WoW for Diablo.

It's true that D3 does not have a subscription model, but Blizzard achieved what was in their mind: hype the fans to the limits and capitalize at launch day. In fact, Diablo 3 has broken all the selling records, if I am not mistaken.

Wow, Diablo 3, Starcraft, Heartstone, ... they are just names. The truth is, Blizzard is still able to keep the fans tied to their famous franchises.

Globally speaking, Blizzard keeps growing year after year. WoW subscription numbers -as you correctly said- will always be far higher than any other MMO.
 
Origin had the same problem with Ultima Online, eventually they canned UO2 mostly due to fears that it would cannibalise the usebase of the (at the time) successful Ultima Online.

http://en.wikipedia.org/wiki/Ultima_Online
 
I think Blizz is still sensitive that their roadmap a few years back got leaked, and that's why they released the date slip.

Of course, dates have already slipped since that "leak", so your guess is as good as mine as to what's up with Titan. But it is worth noting that their roadmap only has one more WoW expac left.

 
Do people really still talk about that made up and constantly updated "roadmap"?
 
@ Sine Nomine

Once you put something online... it's very hard to delete it and/or avoid false information. So yes, people still believe that was a "true" and "definitive" roadmap.
 
I think it is more likely that they are afraid that Titan will not be good enough. Not only would that diminish WoW's lustre, but it could lead to the worst kind of cannibalism, where people move from WoW to Titan, find it is not that great, and leave Titan without coming back to WoW.

This was not a risk with Diablo 3, because they games are in different genres. (Maybe they even deliberately pushed any MMORPG ideas they might have had out of D3for this reason.)
 
How many of the 1 to 4 million will be actual subscribers?

The problem is that we're mixing the Chinese numbers in, but if China is holding strong at 5 million, WoW has actually seen something like a 50% drop in EU and NA subs.

Still, obviously this is amazing compared to everyone else and they are still really profitable. Just saying that it is undeniably on the downhill slope of its career and has been for years.

My alternate explanation is that they've never really been too serious about Titan because they've had the growing realization that they're got a once in a lifetime product, which puts them in a bit of a Catch 22. If they don't spend enough $$ to make it launch it at the same level of polish as WoW, people will freak out and declare it garbage. If they do spend the money, it won't repeat the success of WoW anyway, and is a bad investment.

Titan is going to be closing in on Duke Nukem Forever at this pace. Apparently Titan was supposed to be coming out in late 2013 at one point, and it just got 'rebooted'. Shnikes.
 
How many of the 1 to 4 million will be actual subscribers?

The problem is that we're mixing the Chinese numbers in, but if China is holding strong at 5 million, WoW has actually seen something like a 50% drop in EU and NA subs.

Still, obviously this is amazing compared to everyone else and they are still really profitable. Just saying that it is undeniably on the downhill slope of its career and has been for years.

My alternate explanation is that they've never really been too serious about Titan because they've had the growing realization that they're got a once in a lifetime product, which puts them in a bit of a Catch 22. If they don't spend enough $$ to make it launch it at the same level of polish as WoW, people will freak out and declare it garbage. If they do spend the money, it won't repeat the success of WoW anyway, and is a bad investment.

Titan is going to be closing in on Duke Nukem Forever at this pace. Apparently Titan was supposed to be coming out in late 2013 at one point, and it just got 'rebooted'. Shnikes.
 
I've heard that Titan was off the rails, hence cutting the team to the bone and sending it back to the drawing board.
 
Tobold,

the problem with your math is that that 1 million subscripters WoW lost recently was not from ONE year, but from ONE quarter. If that bleed repeat next 3 quarters (there is any reason for it happens? or for it not happens?), it will be 4 to 5 million subscripters lost in ONE year.

But I guess now that Titan will not have quests, but dinamic events...
 
"But also because presumably at some point the majority of resources would go to Titan, while WoW would be put on life support with a skeleton crew."

I do not see why this would ever be the case. Despite any decline, WoW still rakes in the profit by the hundreds of millions (not to mention their other massively profitable games). Blizzard potentially has FAR more resources than they are currently putting toward development.

As you have pointed out, Blizzard still has every motivation to make WoW's profitability a high priority. I see no reason why any increase to the budget in other projects would need to mean a reduction in WoW's budget.
 
As soon as WoW will lower its subscription price (*and it will happen, sooner or later*) there will be a great influx of players (old and new).

Blizzard is already exploring the micro-transaction stuff (*Diablo RMAH*) and the cosmetic purchases (*mounts and pets on the store*).

They just need to have us less reluctant to this business model, then it will be a cakewalk: no more subscription and... shiny hats to purchase here and there.
 
that 1 million subscripters WoW lost recently was not from ONE year, but from ONE quarter

Yeah, but you can't extrapolate from one single quarter. In the quarter before that their subscription numbers went UP by several millions, and you can't extrapolate that either. You need to consider at least a 2-year expansion cycle for extrapolation.
 
+1 for 4c and Asian "subs" making the numbers harder to see.

WoW will be #1 for a long time. But these losses are a bit more worrisome since the last quarter before/during the beta is when one would expect the low point. I.e. there may be a few more of these prior to next expansion.

In spite of the silliness of gaming boards, financial analysts are making multibillion dollar decisions on Activision-Blizzard. IMO, titan and 2014 vs 2017 would have to influence your 5-year growth estimates for the company.

That is perhaps the biggest cost of WoW's decline. Due to stock multiples and http://en.wikipedia.org/wiki/PEG_ratio a company with 12m subs and growing could be worth dozens of times more than one with 8m and shrinking. ATVI is not priced on WoW being most MMOs. It is priced based upon WoW being WoW. Is a company with shrinking revenue and no prospect for a turnaround before 2017 worth a P/E of 14? If a declining cash cow is worth a p/e of 10, then that cuts 5 billion off the price of the stock. A ATVI with a couple of million WoW subscribers, even if quite profitable and #1 MMO would cost some executives their jobs if there are no new significant products.


 
@tobold

"Yeah, but you can't extrapolate from one single quarter. In the quarter before that their subscription numbers went UP by several millions, and you can't extrapolate that either. You need to consider at least a 2-year expansion cycle for extrapolation."

Yes, but if you analyse the las year, the figure is not pinky how you wish think.

Can can I note that quarter before it was when MoP get launched? Maybe you had forgoten it, but I see that the kung-fu pandas expansion burn out faster than Cata, because one million players in 3 months is not a small number, whatever angle you want look.

Well, the last 2 to 3 year cicle show something:
1- WoW slowly bleed subscripters;
2- WoW launch a new expansion;
3- WoW get up "several million" subscripters (or maybe only a few millions, not enough for get to where it was before.... couhg.... 12 million?);
4- expansion burn out;
5- WoW lose subscripters and go BELLOW where it was before the expansion;
6- slow bleed of subscripters until next expansion.

So, looking at the last years, I can see that MoP BURN OUT faster than Cata (that need 6 months for burn out.... MoP burn out in less than 3 months, october to december). Too, looking at the last years, I too can say WoW will continue to bleed subscripters until the next expansion.

The question is how many subscripters WoW will lose until next expansion, per quarter and per year. That WoW will lose subscripters is a sure thing (you think that not? why?). That WoW lose one million subscripters just after an expansion too is a thing that you need concern. If updates 5.1 and 5.2 don't worked, why update 5.3 will give better results?

There are big MMO being launched soon, all F2P or B2P. Rift is going F2P. The competion is going more intense and I don't see how a 2004 old game can offer something new (more raid dungeons? are you serious? there is a time when the donkey stop to follow the carrot because it died from hungry...) for revert that trend.

IMHO WoW will continue to lose close to 1 million players (+ or - a few hundred k players) for the next quarters... and that will sum to a almost 5 million players bleed for all 2013. And if the players perceive that WoW continue to bleed that numbers (empty servers?), the fall will gain speed.
 
Well Joao, I think you're a little too pessimistic. I mean you are basically predicting that WoW will have no subs by the end of the year. That's a bit much.

We are at the more or less 6 month mark for MoP, so the nonrenewing 6 month subs would drop in this report. I don't think this quarter can be extrapolated to all future quarters.

Obviously WoW is drying up, no doubt, but I've expected imminent doom too often to believe it. When EQ and UO still have enough people to keep the lights on, WoW's probably going to have a server up until 2030.


P.S. Rugus: D3 has been out for a year now. Very difficult to explain a drop now because of a game that was popular then.

 
I'm not buying the fact that the Titan reboot has anything to do with cannibalizing WoW's subscribers. A couple years ago when Titan was leaked, Blizz knew full well how WoW was doing and wouldn't have embarked on a game they felt would just transfer money from one pocket to the other without growing the brand.

My thought is that the MMO industry as a whole is changing. Are those lost WoW subscribers jumping to another MMO, or are they simply playing other genres? I suspect that in a lot of cases, it's the latter. To that end, maybe Blizzard is rethinking the future MMO market and has thus decided to change course on where Titan fits into it.
 
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