Tobold's Blog
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.
The drop in shares has something to do with Lehman Brothers filing for bankruptcy and Merril Lynch being bought up by Bank of America to avoid a similiar fate. This is illustrated in the DOW Jones Industrial dropping 500 points, which hasn't happened since 2001. All my sources point towards The Wall Street Journal.
The drop in shares has something to do with Lehman Brothers filing for bankruptcy and Merril Lynch being bought up by Bank of America to avoid a similiar fate. This is illustrated in the DOW Jones Industrial dropping 500 points, which hasn't happened since 2001. All my sources point towards The Wall Street Journal.

Yes. That's what I said (in less detail). "A happens, B happens" doesn't mean that B happens because of A.
Two months might not be long enough. I would not be surprised if Wrath got delayed.
Honestly, when it comes to putting "dents" in WoW subscriptions, I think it would take some time, I highly doubt it will happen at release. After AoC's buggy release I've seen several people a little too gun shy to buy a game right at release.

I have also heard from some in the WotLK beta saying that it's very laggy. A friend that runs WAR with very little lag issues, can't even navigate in WotLK because of lag.

Really hope that WAR is the MMO that makes Blizzard step up there game.
If we're talking stocks now - the bigger news in the gaming industry yesterday was that EA decided not to buy Take Two Interactive (the makers of Grand Theft Auto), and so that company's stock dropped around 25%.

I wonder how much a game company will change anything based on pressure from Wall Street (as compared to pressure from their customers)?
Blizzards counter to WAR is patch 3.0. Did you see how quick patch 3.0 went to PTR's? My guess is that patch is coming out with in the month. All the new talents, hairstyles, class balance, inspription will keep WoW players happy until WotLK hits in Nov(fingers crossed).

I'm going to preorder WAR tonight and start the headstart program. I'm parking my drood at level 68. When the patch 3.0 comes out my level 68.3 should be at about 68.6, and I'll have rested exp and new talents to play with. Should make leveling to 70 very easy.
Didn't TBC have a nov. launch date that got pushed back to January? and as compensation for waiting they released the talents early? Also what is WoW like now , has raiding pretty much died as people stock up, grind honor, level alts for Wrath? I remember the same thing happening prior to TBC.
I am sure WOW sub numbers have been dropping the past few months as people are getting very bored with the game and WAR only adds to it ofc, providing an alternative. WOTLK is just way too late.
One should also be careful when speaking about WAR subscribers - as in, not every subscriberw ill be a former WoW Player, not every former WoW Player will quit WoW - That and im sure WAR will be drawing alot of its fans from other avenues who have probably never played an MMO before.
I should say that I'm more hoping that Blizzard is worried abiot WAR than I think they actually are - I think they need the shakeup, and WoW needs the competition.
We can debate whether the date of the announcement is a dirty marketing trick, with Blizzard normally not giving us two months advance warning.

On the contrary, Blizzard gave us almost exactly 2 months notice for The Burning Crusade: release date announced on 11/9/06, released on 1/16/07.
I've already leveled to 80 in beta and run all the instances and aside from a few minor things, the game is pretty well polished. Just a few more tweaks, some bug fixes here or there, and it's ready. There is nothing so majorly broken that can't be fixed in two months. To be quite honest, I could see the game being ready in a month, but they probably don't want to release conflicting with Blizzcon.
Warhammer also has the tabletop Warhammer fans possibly coming over to test it out. It is a brand that predates the whole "warcraft" story completely. It can be a taste of the warhammer universe for a new cust, a existing WoW all the same.

If anything, this is what a stale and tired MMO like WOW needs as competition to revitalize their Wotlk expansion. Its too bad Warhammer wasnt releasing a new game right around the time of TBC.

As far as gaming stocks dropping, the short term analysis sure it makes sense. Longterm more and more people are moving to gaming as entertainment and I wouldnt be surprised if some of the side effects of that start to appear. (ie moviemakers making more game-to-movie films, or more movie-to-games start popping out).

I don't understand why it is always said that WAR will take subscribers from WoW. Those 6 million US/EU subscribers weren't there when WoW launched. Why cant WAR get their own subscriber base like Blizzard did?

Is Blizzard the only game company that can attract new players to the genre?
Vivendis stock has been trending down over the last 6 months, but anyway the idea that stockholders would wait until the day the game launched to sell is stupid. It's not like anyone didn't know it was coming.

And yeah sure WAR will probably generate new customers, but lets be honest: they are mostly going to be coming from WoW. Even if there are 6 million people out there who would enjoy an MMO but somehow missed WoW, the Warhammer franchise isn't going to be the one to get them to pick up a copy.

Personally I suspect the MMO market is past the stage of explosive growth. Now its in the steady but sane growth phase.
A lot of WoW players are gunshy not just cause of AoC, but every other WoW killer that flopped.

Also, they have a fairly blinkered mindset; to most of them WoW is the only MMO they ever played. They have a difficult time imagining a game that works differently.

I played WAR last night, and I had as much fun @ 7 and had some hard fought brawls with other guilds. It was my oh shit moment. I ain't going back to WoW. I think a lot of people will end up feeling that way.
I'll be completely honest and say that anyone who thinks that gaming company shares are rising and falling right now on the merits of the gaming companies' products is smoking crack.

Wall Street has much better issues to worry about at the moment, the biggest of which is skinning the taxpayers to pay for their mistakes. ;/
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