In the universe of massively multiplayer online games (“MMOGs”), none come much bigger than World of Warcraft.
Such is the significance of World of Warcraft (“WoW”) in the MMOG space that at its height it accounted for almost 60% of all western consumer spending in the MMOG market. And for its creator, Activision Blizzard, Wow has generated over $2.2bn in gaming subscriptions since 2005.
For a game that has been around for more than a decade, the focus has changed from growth to focusing on retention, slowing the so called “churn-rate” – the rate at which new and existing customers cancel their subscriptions. And whilst some churn is inevitable it’s the scale of subscribers leaving, some 14% (1.3m) between January and March of this year, that has alarmed shareholders, and had them equally looking for the door.
The number of players at WoW has now fallen from its height in 2010 of around 12m to just over 8m today. And Activision Blizzard CEO Bobby Kotick expects the decline to continue. Shares in the company fell 5% on the news, and are unlikely to be marching north any time soon.
But what does this mean for Activision Blizzard; is this fall in players a huge concern, or a blip that can be ignored? By any standard loosing over 30% of your players in two years is a cause for concern. Those to a degree, as Zynga and other social gaming companies have more recently found, as a game gets aged you need to have other newer titles for players for players to switch over to. There’s almost certainly some players who will have switched from WoW to other Activision Blizzard titles, but many will have simply gone elsewhere. And of those that did switch to other Activision Blizzard titles how many will have signed up for new monthly subscriptions? Almost certainly very few.
And it’s the Zynga style business model, the free-to-play with micro-transactions, that appears to lie at the root of Activision Blizzard’s woes. There are today very few MMOs that work as a viable business by charging monthly subscriptions – EVE Online is perhaps the one exception to the rule.
And these kind of business challenges are of course not confined to just WoW. They’ll impact on Activision Blizzard’s other titles as well. The company was also hit by an embarrassing bug in a Diablo III update earlier this week as players discovered that by cancelling in-game “gold” auctions, they could free of charge generate more – with one player said to have amassed a vault of some 371 trillion in-game gold using this bug-exploit. Although the auction has been closed it’s certainly not been a good week for Activision Blizzard or its investor.
James Barnes, StatusCake.com
More from StatusCake
7 min read Today, social media uses a wide range of different social networking platforms to help its users with the creation and sharing of ideas, information, personal interests and hobbies by establishing virtual networks. Affiliates can benefit from these groups that use web-based applications to communicate, interact and connect.
4 min read One of the biggest eCommerce questions – how do you improve user experience? Here are all the top tips for a better UX design to help you drive revenue.
2 min read We all know page speed is crucial but not just for you brand – it affects SEO so hugely that it can make your pages drop in ranking.
5 min read Learn what bounce rate is and how it is measured, what a good bounce rate looks like, and the actionable steps you can take to improve the bounce rate on your website.
3 min read Website downtime no longer needs to be this big mystery that keeps you up at night. Here are the top causes for website downtime AND how to fix them.
2 min read Large ads have been a major issue with online publishers who have been struggling with how to curtail what many call “fat ads.” The oversized ads have a major impact on the ability of website visitors to see them as they can’t view them if they don’t load properly.