Tobold's Blog
Tuesday, June 09, 2009
Wolfshead on the decline of WoW

Wolfshead has a long post in which he charts the decline of World of Warcraft using data on the popularity of the WoW website. Interesting approach, and I do think that a decline in interest in WoW in the USA is certainly possible. But that is all measures. Europe has its own WoW website, so its not included in Wolfshead's charts. And China has again a different website, and is in fact a completely different environment, with a completely different business model.

Wolfshead also charts the Blizzard announcements on subscriber numbers, and points out that it basically flattened out. True again, but on top of that the numbers from Blizzard are getting fuzzier. At the start of World of Warcraft's history the growth in subscriber numbers was an indicator of the growth of Blizzard's revenue. Adding China boosted the numbers quite a bit, but each subscriber to the Chinese version gave Blizzard a lot less revenue per year than an US / Euro subscriber. Then Blizzard stopped saying how many of their 11.6 million subscribers play on which continent, and nowadays the total number of subscribers doesn't tell us much any more. It is thought that more than half of the players are in Asia. But not only do they pay 6 cents per hour instead of $15 per month, but they are also on a different timeline, with expansions coming out much later there. Blizzard switching operator in China from The9 to NetEase, and the resulting lawsuit is further muddying the waters. How well is World of Warcraft doing in China today? We don't know!

But while declining and fuzzy numbers make for good, sensationalist doomsaying, people tend to forget some rather basic facts: According to Activision Blizzard's 12/31/08 annual report, their "MMORPG platform" generated over $1 billion of revenue last year. And if you disregard Asia and various "free" virtual worlds, and just look at subscriber numbers of MMOs with monthly subscription fees in the USA and Europe, World of Warcraft even by the most pessimistic estimates still has 10 times the number of subscribers than the next biggest competitor. Saying that WoW is in decline is like saying that Bill Gates lost a lot of money in the current financial crisis. It's true, but it paints a completely misleading picture of the true finances of Blizzard and Bill Gates.

You don't need to be a financial analyst to forecast that Activision Blizzard's revenue from World of Warcraft will be lower in 2009 than it was in 2008. That is a simple consequence of there not being an expansion this year, and players getting bored of the last expansion over the course of the year. But is Michael Morhaime having sleepless nights because of that? Certainly not, because he has a rather solid backup plan. It looks roughly like this: Release Starcraft 2 in 2009, the next WoW expansion in 2010, Diablo 3 in either 2010 or 2011, and the next Blizzard MMO in 2011 or 2012. Each of these will sell millions, guaranteed. It is not an accident that Blizzard was recently named most bankable game developer.

Whether World of Warcraft's growth is slowing, it is flat, or it started to decline is actually pretty irrelevant. The change is obviously minor, whatever the direction. Yes, World of Warcraft will eventually decline. But it is highly unlikely to crash in a major way. The most likely scenario is a slow decline, with WoW still with us for years to come, serving as a cash cow to finance Blizzard's other developments. The day where World of Warcraft closes its last server is still many, many years in the future.

Activision Blizzards most recent quarterly filing for the quarter ended 31/3/09 can be found here:

They seem to be doing quite fine to me. With year on year quarterly comparitives having their MMORPG revenues increase from $275mn in 1st quarter of 2008 to $314mn in 1st quarter of 2009.

That doesn't exactly sound like a declining market to me.

If you been playing WOW for awhile, you don't really need any special instrument to analyze the decline in WOW. You can just log in a notice the decline in action in the economy, the pre-80 game, and party adventuring. For the most part new players aren't coming into the game, it's all about raiding now, and buying on the auction house isn't needed as much.

Blizzard will always have their funny way of counting their subs so that it makes it hard for them to lose subs. It's silly to go by announcements because Blizzard will never announce that they lost subs because it will make them look bad. So we'll never really know how much they're declining or flattening.

I disagree that the decline will be slow. Wow is going to lose significant chunks of subs when a respectable game comes out, and at the latest that will be SWTOR or FFXIV.
I am actually considering resubsribing right now. Just for single player leveling and eventually BGs.

Point is that WoW is still a very good single player game - or even multiplayer game if you can encourage some friends to start all over with you.

Unfortunately the starting dungeons are probably that simple by now that any more than 3 players force you to only run those dungeons that drop loot that you cannot use yet. Even with 3 players it can often be much too simple.

However. After not touching WoW or any MMO for 8 months now and after not really playing WoW for almost 18 months I feel like its single player leveling game could actually be more fun than a lot of single player games that come out nowadays.
I presume the website is more driven by hype than actual content.

Lots of people will have visited the website last year to find out about Death Knights etc. Many less will be checking it this year simply because there isn't much hype about 4.0 out yet.

The website has an entirely different purpose and popularity cycle than the game.
It all goes to show how wise Blizzard are developing a new MMO. They are obviously preparing for the eventual decline of Wow.
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It's about time they start announcing their next mmorpg. At five years of age, WoW is starting to age. I've stopped playing, at least until the next expansion.

But I'm not worrying, they will probably find a way to draw most of the WoW players to their new mmorpg. But they'd better beat the Star Wars mmorpg release date or I might have switched sides.
I'm pretty sure there is currently a decline in WoW subscribers based on all of the elements mentioned.

That however isn't what interests me, what interests me is WHY.

I quit WoW because of the direction of the design. The fact that it's barely an MMO anymore and more a single player game up to L80, after which there's pretty much nothing except some dumbed down raiding. I'll probably be lumped into the 'hardcore elitist prick who doesn't want anyone else to have fun' camp if I expressed all of my views here. So I'm wondering if the decline is people like me leaving, or the bunch that the game has been pandering to over the last while.

I don't recall people complaining about 'the decline of WoW' so early after the last expansion or in fact at any point before Burning Crusade. There was always more to the game. Always one more thing you wanted to do.

I'm wondering if the decline in figures is simply the easily bored bigger and better crowd who have moved on to the next big shiny. The people you wouldn't retain anyway because the only thing that holds their attention spans are more big shiny numbers, special effects and loot.

Or is it the more long term players who are quitting now because the game simply isn't the same solid MMO experience they enjoyed a few years ago?
That however isn't what interests me, what interests me is WHY.

Everybody is a demographic of one, and interprets the WHY as "people are leaving WoW because of the one feature I don't like". That is just plain silly. Nobody asks why so few people are still playing Tetris, or what feature of Tetris caused people to stop playing. The question simply doesn't make sense!

No game lasts forever. Even with expansions and content patches, and thousands of hours worth of gameplay, sooner or later everybody is going to grow bored and leave. And they'll grow bored with the next big game after that regardless of what features it has.
"No game lasts forever" is a truism, asking why people lose interest in WoW by now demands a more sophisticated answer.

WHO is quitting and WHY is guesswork and theorycrafting, but still very interesting.

My personal theory is that people are finally fed up with the stone old EverQuest formula of constant progression. The carrot of more and new shiny gear, that now suddenly is readily available ("welfare epics") is to blame.

I dare to say that endless progression systems need a restart or just get uninteresting as they always go hand in hand with power creep and repetition. Even the really good new and innovative ideas in WOTLK plus the beautiful landscape could not change that.

IMO also the failed dungeon and raid design is to blame. Everything was just piss boring easy. And this has nothing to do with "elitism". Ulduar racked up the difficulty somewhat and is still fun, according to my WoW playing friends.

I also think WoW lacks meaningful and interesting alternatives to item hunt raiding as the endgame.
I have been playing WoW for a good two and a half years now, and I can say I very rarely go to their website for anything besides the occasional trip to the realm forums or to renew my subscription. All my WoW related news and info I can get from other sites.
True, Blizzard is and will continue to do great financially. I don't think that guy was making that argument though. WoW itself is on the decline, and that matters. Not so much to Blizzards bottom line, but it does matter to the players in their calculation of whether they should keep playing, try other MMOs, or whatever. Many WoW players have a difficult time accepting that WoW is on the decline, and getting them to accept it is the first step in prying the monkey of their back.

As to why the game is in decline--- I don't even think it is the game so much. Blizzard is clearly trying to extend peoples careers by giving them access to all the stuff they couldn't do before. But I think that the average WoW player has a career of a year or two, regardless of the game. Then he/she gets burned out and leaves. When WoW was the new hotness there was a huge wave of people beginning their careers. The period of exponential growth is over, and so the number of people retiring is accelerating while the number of new players is declining and somewhere recently the trend lines crossed and more people are leaving than coming. It will get substantially worse.

The fact that Blizzard has decided to pander to the casual base is just a reason to leave sooner than later for people who play WoW for the same reasons I did.
I always believed that MMOGs tend to be something of a fleeting demographic. WoW has been around for almost 5 years now. That's enough time for somebody to go from jr. high to graduating high school, or a high schooler to a university graduate.

Given the general target audience, people who once were able to raid long hours and invest huge amounts of time can't anymore due to the changes in their lives. Sure, some folks are still the hard core types who will continue to play WoW seriously, even after leaving school (through schedule management, as opposed to having lots of free time). However, those folks tend to be much fewer in number, simply due to the added responsibilities of maturity.

As people mature, their tastes change. WoW has to attract new players as their older ones quit for various reasons. I think that they're trying new things in that regard (see: recruit a friend, level 1-60 exp lowered, heirloom items, etc.) and hoping something sticks. However, their primary concern at the moment is user retention. It will be interesting from a research standpoint to see where they are in another couple of years.

Tobold, you're coming off as strangely defensive of WoW in this post, considering that Wolfshead never said anything about this trend dooming Blizzard/Activision. The observation merely notes WoW's subscription decline, despite the release of WotLK and new content still being produced. That's very telling information about the trends of MMOG gamers, particularly in light of Spinks' 4-year "rule".
It's a common logical fallacy amongst WoW fans--- the argument from profit. If Blizz is making Scrooge McDuck levels of cash, everything is peachy.

The argument really goes something like this:

Blizz is making more money than God. Because WoW makes the most money WoW is the objectively the best MMO ever. Because WoW is the best MMO ever, it gives meaning to all the time I spend in game. Therefore, Blizzards gold plated toilets are proof that my life has meaning.

It's never quite put so baldly, because put baldly its absurdity is clear.
You're talking out of your *bleep*, Toxic. If WoW fans make any argument about profits is that the fact that everybody has free choice of what game to play, and if most players decide to give their money to Blizzard, it is because Blizzard makes the best game.

Which sounds a lot more logical than your argument that everything which is popular must automatically be bad, and that nobody plays your favorite hardcore game because everyone is too stupid to grasp its true greatness.
I don't think it is in a serious decline - WoW has been around for a quite a while so it will naturally have a turnover of people who have played it and then moved on. Naturally the peak after Wrath was released and all the people re-subbing has passed and people have maybe moved onto other games – has WAR/AoC/LotR numbers increased?

Then again looking from the point of view of what’s the nearest serious competitor to WoW numbers wise (by that I mean subscription based MMO) WoW could lose a few million subscribers and not notice.
Tobold, please man.

I argue that Blizzard is ripping off players by using hard/easy mode to recycle content.

The response: paying for proper content would cut into the bottom line.

I get the argument from profit all the time; it covers for Blizzards failures, it is proof that WoW rules all.

Also, don't put words in my mouth. I have never, ever, said, that popular=bad. But it doesn't equal good either. The Beatles were popular. So were the New Kids on the Block. Popularity bears no necessary relation to quality. You can be popular by making great music, or you can be popular by appealing to a bunch of musical philistines and children. Both strategies move records. It is up to you and I to make our value judgments about which strategy is good and which is bad. Blizzard started as the Beatles and switched to NKOTB because business realities dictate that it is more profitable to let WoW slowly decay. That's fine from a business perspective. I assert it is not ok from a fan/client perspective.

And no, I don't play any MMO now, even casually. I don't have a horse in the race.
And no, I don't play any MMO now, even casually. I don't have a horse in the race.

Well, you do have a serious case of irrational WoW hate. Nowhere in this post or any other post has anyone ever made the argument that "life has meaning" because of WoW's popularity. In fact I repeatedly argued that WoW is just a game, and so is every other MMO.
I don't hate WoW, really don't. I'm obviously not its biggest fan.

I'm not saying people explicitly make the argument that WoW making money gives their lives meaning. Of course they don't--- its to absurd put that way.

But as an ex-WoW defender, I know something of what is running around in their heads. And WoW being the biggest and best is like when a dance club is really popular--- just being there grants you a certain something that being at a regular ole club doesn't.

Which is why people take some guys post about declining sub numbers and extrapolates that into a defense of Blizzards fat bottom line and the longevity of WoW. All true, just not terribly relevant, except to people who want to keep feeling like WoW is still hot.
Why would I? I don't even play WoW any more.

The popularity of WoW is important for far more practical reasons than hotness or the meaning of life: Activities like raiding are social, and require lots of other players around. Plus the current server architecture of WoW and many other games like it isn't very well suited for a decline, as WAR had to find out to its detriment.
I've played most of the MMOs, Toxic, and WoW really is the best of the lot.

The funny thing about MMOs is that the better they are, the longer players play them, and the longer they play them, the more their faults are revealed.

It's like being married. Tiny flaws get magnified over time. What you didn't notice at first is now irritating at times.
Well obviously those value judgments are for each person to make. WoW was the best MMO I've ever played, probably still is in all honesty.

I do think it can be harshly criticized on many different grounds and that Blizzard has made a conscious decision to put profit over quality.

That doesn't negate the fact that many people are way too defensive about it, and use Blizzards profit motive as justification for many decisions that aren't really justifiable from the perspective of the players.

That's my basic position.
I took a look at those charts, and I am not sure they are a good indicator of the game's life. I would suggest that as the game's players become more experienced they might visit the official site less.

I mean, I used to the visit the site everyday and now I only visit to punch in a new time card code. There are so many other, more useful, sites out there for wow info that I don't have much reason to visit the main page.

If we are going to use Alexa data then we need to include statistics from all the non-official wow sites.
I lol at all the comments about WoW "dying". UO for christ sake is still there, EQ still is . Heck the practically dead, never wildly popular Asheron Call is still alive

Servers cost peanuts to run, they will run WoW into the ground. It is still profitable to run WoW even if it only has 1k subs (all the infrastructure and content developed ages ago and paid for itself many times over)

They only way WoW is gonna be closed if (in the very very very far away future) bliz decides that it competes with their other MMO too much

Wow is there to stay for another decade or even two
"I would suggest that as the game's players become more experienced they might visit the official site less."

Certainly a valid point. Many other sites cover WoW news more efficiently than digging through blue posts in a forum. MMO-Champion does great at this. You also have the EJ site becoming much more mainstream, as more and more players get into raiding.

Essentially, other than the official realm forums and account mgmt issues, there are other websites that just disseminate information better than going to the official page.
Flock of Seagulls still tours Mark. Dying doesn't equal dead. Nor does not being dead equal life.
Raph Koster wrote up a great article a while back on the lifetime population curves of "large scale virtual worlds". Every single one has had a ramp up as adoption increased, then it peaked, then dwindled into a "long tail" of long-timers and slow burn population churn. This is pretty standard behavior overall, but the curves have been damped in the Wrath Of the Lick King era, probably due to a few factors.

I lay the blame on a variety of things, including: the playerbase's focus on the "endgame", the fact that WoW is several years old now, the LONG leveling grind (even as it gets shortened by various mechanics, it's still a lengthy process for players to get up to Raiding speed to play with friends), and even the economy at large.

Ultimately, this isn't exactly news, but it is interesting to note inflection points in a game's history, and it may well be that WoW has peaked. At this point, it also calls into question the thus-far model of expansion; the game really can't find a new peak *as easily* (or at all) if all it offers next expansion time is ten more levels, another gear reset, and some new raid dungeons. "More of the same" might extend that graph's "long tail", but considering the relatively low impact of Wrath, Blizzard has to be looking at the cost/reward of making more expansions the way they have been.

That's perhaps the biggest thing to take away from Wolfshead's article; that WoW is no more capable of perpetual exponential growth than anything else in a finite world, and trying to understand why. Looking forward, it's going to be important to see how to intelligently ramp down into the long tail period of the game's history. We've already seen expensive MMOs turn off the lights, and people are more conscious of the reality that MMOs are no more immortal than any other business enterprise.

It may be premature to call for the "demise" of WoW, but Wolfshead was talking about the "decline" of the game, which isn't the same thing.

Even so, a discussion about the demise of MMOs really should start being more mainstream. We've already seen sites like Massive note articles that remind us that "persistence is a lie" in MMO games. They can and occasionally do just turn off, leaving players with little more than memories and a screenshot folder.

It will be interesting to see how many of these games transition into a "more perpetual" zombie state by allowing for private servers or offline modes (or go open source like Myst Online), and how many just curl up and die like Auto Assault or Tabula Rasa.
Well, it'd be certainly interesting to see how the burn-down period goes for such a large society. As it is, World of Warcraft broke record breaking numbers, and, assuming that the majority of players don't automatically flock to the next Blizzard MMO (I know, I know, a big assumption), how long will a 11 million population survive on the just life support?
I'm still waiting for my Starcraft:Ghost game, I mean I loved the idea. AN FPS based on hot is that.
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"Well, it'd be certainly interesting to see how the burn-down period goes for such a large society. As it is, World of Warcraft broke record breaking numbers, and, assuming that the majority of players don't automatically flock to the next Blizzard MMO (I know, I know, a big assumption), how long will a 11 million population survive on the just life support?"

Life support? Why would Blizzard do that? I expect to see at least two more major expansions for WoW, so that covers the next four years.

Further, Blizzard is not going to be cash poor. Both Starcraft 2 and Diablo 3 are going to sell millions of copies. It's not a stretch to suggest that each one might result in a billion dollars in revenue each for Blizzard over time. Starcraft, Diablo 2, and Warcraft 3 still hover in the top 20 sales list for PC games month after month. And there's the unannounced MMO, which I am guessing might result in a bundled subscription price eventually so you can play both the new MMO and WoW for $20/month. Just a guess, of course.

There's also a WoW movie in the works. If Blizzard can manage it, they will have an expansion release to tie in with the movie.

I don't see life support for WoW. I see Blizzard continually creating new content for the game for years to come. I think the real challenge is figuring out how to update the game with a new graphics engine without losing players, and what to do with the sub level 55 content that is depopulated. It's almost like they need to retool the game so brand new players start at level 55.
As an addendum to my last post, let me say that I'm currently not playing WoW, having cancelled, but I will probably play it again.

That said, my interest would be instantly rekindled if I could play every class like a Death Knight.

That is, if I could start a Druid at level 55 and get a series of cool quests that take me to level 58 and basically let me learn the class that way and have that boatload of talent points you get.

I am not that interested in leveling classes from level 1 again.

As Blizzard, it would be hard to basically throw away all the level 1-54 content, but it's old and players solo through it anyway. If they run the low level instances, it's usually with the help of a level 80 character just clearing the way for them. That's a boring way to play.
Frank, if you want to use anecdotal evidence based on your observations of your server, here's my anecdotal evidence that WoW is in better shape now than it has been at any point in its history:

On my server, there are 33 guilds that have made moderate to significant progress in 25-man Ulduar (at least Siege + Antechamber cleared).

This is far, far more guilds actively raiding progression content than was ever the case in TBC.

And more than was the case in classic WoW, even if you consider that raids in those days were 40-man.

I assert that the decline you're seeing in "the pre-80 game", for instance, is not caused by an overall decline in activity, but rather just by activity being even more entrenched at the level cap.
I wonder if WOW has reached the peak for subscription-based MMOs. These days, we're seeing quality free MMOs, and I know some folks have dropped WOW for Runes of Magic, and Free Realms is soaking up users as well who are just looking for the social factor. I've quit WOW and gone back to Warhammer Online, though I know it's only a temporary measure as WAR just lacks the polish of WOW.
WoW currently presents two big challenges to the Blizz business model:

1 - how do you integrate new players in the same game world as players who have put thousands (or even tens of thousands) of hours into the same game world?

2 - the tougher - how do you deal with the threat of your own non-subscription products to your own subscription games, which are the real gravy?

#1 has been dealt with fairly gracefully, but only gets tougher with each release. #2 - we'll see. Blizz is led by some of the brightest business minds in the world, but it will be a delicate transition.
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