web analytics

I still believe Blizzard is phasing out WoW

WoW dropped another 800k subs bringing it down to a lowly 6.8 million. Remember my crazy assertion that Blizzard is sorta okay with WoW slowly fading away? Yeah, I’m still crazy; I still think that’s the case. I’m not even close to hinting at even the remote possibility that they aren’t interested in making money — no, quite the opposite. I truly believe Activision Blizzard knows they can make more money by phasing WoW out and phasing in other more profitable products.

WoW is Expensive

I can only imagine how expensive it is to continually develop and support World of WarCraft. Very, very few products ever last for 10+ years with this level of continued support before being phased out for something new. Compared to something like Hearthstone or Diablo, WoW has to be sucking out cash like crazy. That’s fine since it also rains money down on the company, but there is a ratio and a point of inflection where I guarantee top brass want something a little more efficient. I face the same issues at my company right now where I’m trying to convince a team that it’s not okay to push our $18,000 product if we only make $2,000 profit — push the $9,000 product where we make $6,000 profit in 1/3 the time please.  No seriously… do it.

Momentum is Drying Up

Warlords of Draenor is still slated for sometime near the end of the year. This waiting game is totally intentional. Guess what happens when Blizzard fans don’t log in to play WoW? Many of them will try one of the other great games Blizzard has to offer. The strategists at Blizzard are incredibly insightful and know that the competition sucks right now — if you didn’t know that, it does. The landscape for transitioning customers right now is beautiful to behold.

Blizzard’s Future isn’t WoW

Blizzard has become synonymous with WoW.  People talk about WoW as doing things like WoW is the primary entity. For a while that’s okay to be known by your product, but after a while the team starts to squirm because that product cannot last forever, and when it does finally go away if you have absolutely no identity or loyalty to your company’s brand… ouch.  Lucky for Blizzard they have immense corporate brand identity, but that doesn’t change the basic underlying principles of this lesson

There will come a time when Blizzard is known for something else. They’ll want those 6.8 million+ people to transition to support a newer product with a longer shelf life. You can’t just start the moment the product releases. It takes time, and there’s no better way to start than to ever-so-slowly sunset a game without most people even realizing it’s happening.

Tweet about this on TwitterShare on FacebookShare on RedditShare on StumbleUponShare on Google+

Comments

  1. The crazy ones would be Blizzard if they were okay with letting their #1 money making produce just fade away. WoW sells boxes AND generates subscription revenue. If you think somehow something like Diablo III, which still has server connection overhead, is monetarily more efficient than WoW, I have a bridge to sell you.

    Blizzard certainly wants us to buy into them as a brand. They didn’t make a Warcraft themed card game for nothing. But the moment the team in Anaheim says, “We’re just going to let WoW decline” Bobby Kotick will be over there and telling them they are fired.

    By your logic, SOE should have let EverQuest just die ages ago.

  2. I don’t think Blizzard is intentionally phasing out WoW, but I do think that they realize that WoW is inevitably declining and to keep those customers you need other games. I think it’s clear based on how many new games they have in the works that they realized the need to diversify. Diablo 3, Hearthstone, SC2, and Heroes of the Storm are big additions to the Blizzard lineup that are meant to take players who aren’t interested in WoW anymore.

  3. Gankatron says:

    Maybe so, but this contention is purely speculative if you are inferring an imminent discontinuation of WoW, and I hope the phrase “a lowly 6.8 million” is written facetiously as any other MMO would love such numbers. ;)

    As for your analogy, if you were in a large enough company to hire more developers for multiple projects wouldn’t it make more sense to bring both the $18k and $9 products to market, especially if the external competition is relatively weak for the former?

    Car companies keep car lines with strong brand identity while releasing new models, even though in theory that might foster intra-brand competition; I think the more important point is that more varied offerings are more likely to get customers to buy one or the other as opposed to having them shop elsewhere.

    I think the common marketing practice of offering multiple related product is especially effective when each offering appeals to somewhat different demographics. It doesn’t take highly developed precognitive abilities to guess how Blizzard will accomplish this with WoW; in the tea leaves I see a “2”, a “P”, and an “F”, but what could it mean?

    Sure some day WoW will likely go the way of most MMO’s to date, but I believe you are not simply stating this as a truism, but implying that this event is just around the corner, likely corresponding to the release of Warlords of Draenor, i.e. around the end of the year? I doubt that will occur, and instead we will see WoW transition into a new financial model to appeal to different demographic groups as predicted by my extremely accurate tasseographic methodologies.

  4. As you know I tend to agree with most of your posts but this has to be an exception. Where would you get the idea that ” product cannot last forever”? Erm… Coca Cola? Superman? Mickey Mouse? Chanel No. 5? We could all probably name scores of products and intellectual properties that are still top sellers, even market leaders, in their fields fifty or even a hundred years after they began. WoW won’t last “forever” but ten years is a piffling amount of time in the life of a successful product.

  5. This would make sense if Blizzard had another product waiting in the wings to take on WoW’s users. But they don’t have anything like that announced– and if it’s not even announced yet, it’s many years out.

    So, yeah. You /are/ crazy.

  6. yep what Rodalpho said, if titan was still in the making i would agree with you, but they dont have anything even close to being out.

  7. 6.8m subsribers equal roughly 89m per month or a billion a year not counting extra revenue for their extra services or Chinese different payments. For that money you can run a team of 5000 people and still make profit.

    So no, they aren’t phasing out, in fact WoW will do a lot of money for the next 10 years at least. Good MMO’s don’t die. See Everquest or Ultima compared to their former success and age they are still doing good.

  8. Baba black sheep says:

    I think they will cut support way back and milk cash for years before it sunsets.

  9. Wow is only expensive to maintain if you keep developing for it.

    If they do what many Mmorpg do eventually and stop development all together and keep a skeleton crew they would still be making loads of money even if more then half of the current subscribers stop playing.

    The other good money making option they still have is going f2p.
    With the right approach this could be huge.

    No wow is here to stay. At least until blizzard brings out their replacement Mmorpg.

  10. 1. I disagree that it would an expensive game to maintain. At least no more so than any other MMO of its type. And no other MMO has WoWs cashflow.
    2. Given the massive year long content gaps I think the money coming into the game is not going back into development, it’s funding other projects or going straight into profits. Obviously a company needs to make a profit, but it also needs to re-invest into it’s project. You’re paying for each expansion, so what is your subscription paying for in those year long content gaps?
    3. Given how half hearted the next expansion is, I’d say there is no creative leadership left (or no authoritative leadership, that has the power to make radical innovative changes). They’re just doing the bare minimum to keep their audience.

  11. @Bhagpuss: I said “very few products.” That’s not all-inclusive. Also… Coca Cola, Superman, and Mickey Mouse are not products. Those a brand and intellectual property, characters, etc. The product Coca-cola as in the drink would be one product that has been supported. Again, I say very few products as in actual products. Most products undergo massive change and transform into something entirely different or support is not kept up.

    @Gankatron: The lowly 6.8 million comment was tongue-in-cheek. The phasing out of WoW will take years, and in no way be remotely close to imminent. As I prefaced my entire entry by saying, Blizzard is phasing out WoW but they aren’t uninterested in making money. They will maintain profit maximization the entire way. Some people seem to think you can’t phase out WoW and make more money. I totally disagree with those people.

  12. A graceful exit strategy seems plausible to me. WoW won’t shut down in the near future, but I assume Blizzard execs are seeing a decline and could have ordered a slow phase out. A smooth transition trying to bring a large amount of players to a new platform/game would be appealing to me as way to keep the shareholders happy.

  13. The Warcraft brand itself will live on far longer than WoW. I’ve been playing Warcraft ever since “The pale dogs approach” (I do believe that Warcraft 1 is still really the only game that warned you when the enemy was NEARBY rather than already burning shit to the ground) I would love for them to do a surprise release of Warcraft 4. That would be awesome.

  14. I look at it as more the fact that the people that built the game up to what it became are no longer there. The focus shifted to milking a cash cow which ironically probably cost them more than spending the money necessary to put out content at a reasonable pace.

  15. @Maljjin: Yep, that’s it exactly! Glad I’m not the only one dipping into the crazy sauce.

    @Gringar: Without a doubt the Warcraft brand will live on. We’re already seeing that with Hearthstone, and I would probably give my first… maybe first and second born children for Warcraft 4.

    @Ald Shot First: I agree with you.

  16. listener says:

    Did is way off.

    WoW is special product. You can’t just go and invent a world beating product with a bit of corporate planning.

  17. @Keen : Have you talked to the Mrs before making deals including your future children ? ;)

  18. Intruder313 says:

    I don’t really agree this time. Yet.

    WoW still makes them an absolute fortune and they appear to be making a lot of effort with the new Expansion – perhaps it will be their swan song but we’ll know within the next few months.

  19. WoW will probably not be phased out, they will just change how much new development they create. It will be just maintained just like a lot of other MMOs. Just take a look at EQ and EQ2. They are still around but there expansions get smaller every year.

    What you were discussing is return on investment. If you spend $18k and profit $2k or you could spend $18k and profit $6k, you would obviously choose the second option. Blizzard does not have a second option (yet) to exceed the profit of WoW. Obviously there is more to the story than just that like dealing with the PR of phasing out of a popular game.

  20. I agree and will even take it a step further. I believe ever since WotLK was released, Blizzard has been more focused on a newer MMO in development. (“project Titan?”) It seems to me that is the reason Blizzard has played so fast and loose with different gimmicks and questing styles in the last two xpacs (water zones, dungoen/raid tiers, pet battles, farms, etc)

Trackbacks

  1. […] Keen and Graev and is Blizzard phasing out WoW […]

Speak Your Mind

*