With World of Warcraft fading, what will Blizzard do next? | Hacker News Reader

With World of Warcraft fading, what will Blizzard do next?

extremetech.com

38 pointsevo_946 comments

I think the real money auction house in Diablo 3 will work tremendously well. So well that it will change MMOs. Blizzard will make most of Diablo's revenue from it, and competitors will follow. Blizzard will embrace this idea and will apply it to future games, maybe Titan will be free to play with a similar auction house. Which will also move a bit further away from the desktop.

The player auctions are extremely scalable. It puts two huge revenue streams together. It's the sum of consumable virtual items + selling rare exclusive items. I'm not sure Blizzard realizes this, but this will be huge. And I'm already betting my money on it.

knock knock

"Hello, it's the IRS."

What is this supposed to mean? Are you suggesting selling virtual items is illegal in some way? Perhaps you should tell Zynga and Valve about this.

I believe he means if you manage to make enough money with the auction house, the IRS will be curious if you're reporting this as income and paying taxes etc.

No he means that if you sell them, you have to pay the due taxes. Zynga and Valve supposedly pay their taxes. The difference is that in this case it's the individuals who make a profit and the IRS (or other tax agencies) would make such a "virtual goods for real money public marketplace" more complicated.

This is going to be interesting.

Anybody selling "virtual items" will have a cost basis of "0" if self created, so everything is "profit" in the IRS' eyes.

If Blizzard is collecting the payments they are obligated to track those transactions and report anybody that hits the minimum 1099 threshold.

If you're in CA and sell to somebody in CA will you have to pay the state board of equalization too for sales tax?

Very curious to see how this is all addressed.

Hardly '0'.

The game. The hardware to run the game. ISP cost. The fees.

It all adds up. Not to mention Blizzard will be implementing their own restrictions (AH and $ limits) to choke and put up barriers for those that really want to make this a full time job.

Is it too much different from how ebay deals with it?

I'm highly sceptical.

Ignoring the auction house for a second, Blizzard makes money once though a large up front sale, and then has no monthly fee. The game is played entirely on online servers with no single player however.

That means Blizzard makes the most money from a customer who plays though the game once (or not at all) and then doesn't play again.

This philosophy seems to be present throughout the games design which, as far as I can tell, is tailored for minimum re-playability and maximising the fun you get on your first play through. Even the auction house itself helps this design goal when matched against their other design decisions.

This kind of design isn't conducive to long term success with the auction house.

I believe that the auction house is primarily designed to kill 3rd party item sales, which it absolutely does, albeit in a way I find personally distasteful. While I'm sure it will be a non-trivial revenue stream, I don't think it will be anything like what WoW subscriptions were.

Disclosure: I work for a company making a competing action RPG.

I am very interested in how this will all play out.

Personally, I think the auction house real money economy is going to be huge. If the trading that went on in Diablo 2 is any indicator:

- people in low wage countries will easily be able to live of the auction house without necessarily having to work for a gold farm.

- hardcore gamers are likely to be dissatisfied with high level content so easily available, but then again, they may take to turning a profit on hard to get stuff.

- casual gamers with jobs will get the maximum amount of fun out of their hour of gaming a day. For a small price at least.

These are incentives for 3 different demographics, 2 of which are highly desirable for Blizzard.

The key difference between the subscription and the freemium model is the scalability with flexibility. A subscription is a fixed value the costumer pays for. If you set it to low, you're missing the opportunity to make more money from users willing to pay more. If you set it to high, you run the risk of users who would still be profitable not buy it at all.

Then you could try different tiers of subscriptions. But that only bandages the problems. Then came consumable virtual items, which automatically gives you infinite tiers of pay users. You can play the game for $15 a month, you can play it for free, or you can pay $3000 a month if you're willing to. And according to Zynga's report, many does, and that's where they get most of their money from.

That flexible scalability is why freemium is replacing subscriptions. And that's why I think the auction house will take over subscription. Because not only it's a freemium model, but it's a genius freemium model. It takes the best of the two main types of freemium (consumable and permanent virtual items) and put them together. It doesn't put a limit on how much a user can pay you. And it's also very attractive to users.

I'm not saying that auction houses can't work in general, I'm saying that it will not work in Diablo 3 due to it's design.

I'm well aware of the benefits of free-to-play, as I am a founder of a company making a free-to-play game!

No game can last for ever, and for WoW to last nearly a decade is pretty impressive.

Blizzard has plenty of games in the pipeline for the next five years. SC2:HOTS, SC2:LOTV, Diablo III, and the presumed Diablo III expansion pack. Plus 'Titan', whatever that ends up being.

It might not be as robust and predictable as WoW subscriptions, but running a profitable business isn't supposed to be easy.

This is completely off topic, but does anyone know how to prevent extreme tech from redirecting my iPad to their awful mobile version every time?

AFAIK (I'm the editor there) there's no easy way around it. I think we've recently rolled out another mobile layout -- but only for non-iPad devices (iPhone, Android, etc.)

It's OnSwipe for WordPress, incidentally. Maybe there's a local hack you can perform to disable it -- setting a cookie, or something.

Sorry I can't be of more help.

I don't mean to be inflammatory, but OnSwipe is the bane of my internet experience. PLEASE get rid of it.

I have to agree with pagekalisedown, onSwipe is a scourge that needs to be destroyed. If you insist on using it to the detriment of your readers, then please please please give us the ability to turn it off easily and have it never come back on. Also a general note to all web devs: my iPad now has more resolution than any of your monitors, DO NOT force me to view your 'optimized for mobile' site if I dont want to. otherwise I will stop visiting your sites. Thanks!

Some third party browsers allow you to change the user agent; AFAIK this is the only way to avoid this.

Sounds like 2007 all over again: http://gigaom.com/2007/06/17/has-world-of-warcraft-finally-h...

Raph Koster (much of whose work I admire!) seems a bit off-base speaking of WoW in 2007: “This is how Open Big MMOs all go. A big rush, peaking a little bit after the launch. Then a plateau for a while, then a tailing off.” http://www.raphkoster.com/2007/06/15/how-open-big-virtual-wo...

I would not expect WoW to be around forever, but I wouldn't bet on its demise any time soon. Fading? Maybe.

WoW subscription history vs other games from: http://users.telenet.be/mmodata/Charts/Subs-1.png (from http://mmodata.blogspot.com/)

With 10mil subs still they will take a long time to fade, but if you look at that chart, the first significant dip in its history was post Wrath of the Lich King, followed by the current dip which occurred after Cataclysm. They regained their subs after the wrath dip, but this one seems to be ~4x as big. It will be interesting to see what happens when Pandaria comes out, I doubt that they will ever return to their peak, but that is the point where we will _start_ to be able to make predictions on how long the demise will take.

The numbers are getting lower because many people are leaving due to Blizzards repeated failure at basic concepts: trying to balance the game for both PvE and PvP, trying to make the content challenging enough for hardcore players, but accessible and rewarding enough for casual players. The first expansion was pretty good, but I think the number of guilds that finished Sunwell were something like 1-2%. I know a lot of "hardcore raiders" quit after the second expansion (myself included) simply because of the design changes. Even among friends that still play, I don't know anyone really looking forward to the upcoming expansion, it's not that people are sick of WoW in as much as they are sick of what Blizzard is doing with it.

While calling these "basic concepts" is technically correct, I suppose, they're also among some of the most difficult aspects of game design. In a community as large and diverse (in terms of both ability level and time commitment) as WoW's, it's hardly surprising that Blizzard would err on the side of populism.

10.2 million may be a step down from the peak of popularity, but WoW is still wildly profitable and maintains a userbase larger than most of its competitors combined.

Just because I don't agree with their choices, doesn't mean I don't understand them. Even though Sunwell was an unplanned response to Black Temple being "tuned too well", the next expansion not being ready, the top guilds crushing existing dungeons, it doesn't make sense to release content that 5% of your player base ever has a hope of seeing, much less finishing. I mean I get it for sure. From a monetary/subscriber point of view, they absolutely did the right thing, the hardcore crowd for sure was the minority (the vocal minority), but minority nonetheless. I think we're seeing that in the subscriber numbers, 10% of so people got fed up and left, and the remainder are [happily?] plugging along. But playing through the various expansions, you can definitely feel that the top designers, etc have been pulled off onto Project Titan. The game has lost some of it's epic feel (which could also be due to it's age as well).

The way they approached the problems with Sunwell in 3.0 and 3.1 seemed really good. All of the content was easy to finish, but fights like OS3D, firefighter, yogg+1, and algalon were engaging for a long time. After that the hard modes stopped being significantly different from the normal versions of the encounters, which makes them a great deal less exciting. The lack of excitement in high-end raid content should only impact high-end raiders, though, so this probably has very little to do with the people who are leaving the game.

I just started playing 4.3 after leaving in 3.3 and the blatant brokenness of the game amazes me. I expected the human racial to no longer be unreasonably powerful, but 2x PVE trinkets is now an even larger advantage than it was in WotLK. I expected at least some effort at QA for the content patches, but instead we have blood DKs in blood presence being critically hit by bosses, carrying winds letting players fall to their deaths, and Deathwing occasionally deciding he would rather remain impossible to attack until his hard enrage than participate in the last phase of the encounter.

Blizzard has said they want to fix the PvE vs PvP issues at least with respect to gear, so that wearing PvP gear in PvE is bad but not terrible and wearing PvE gear in PvP (even trinkets!) is bad but not terrible. It seems odd that they did not think this was an issue from TBC until now.

> Subscription figures have fallen from 12 million just after the release of the last expansion to 10.2 million

That's probably a cycle that follows every expansion: all of the old players come back, play it, get bored again and leave. I'm not sure this is evidence that it's "fading"

But they've already announced their next game, Diablo III, and they tend to only have a few games in their peak at a time anyway, so we know what they're doing next because they've told us.

10.2 is the lowest it's ever been. Usually the numbers rise and fall depending on what other games are released -- every time a big-title MMO comes out, WoW generally loses 1-2 million players to it (and then they come back).

If the figure stays around 10 mil (i.e. if SWTOR keeps them), I guess that'll be 'proof' that WoW is fading.

Fading is, of course, very relative. A "fading" wow is still extremely strong.

Surely you don't mean "ever been"? I don't know how long it took them to get to ten million players in the first place but I'm imagining it wasn't on day one :)

And semantic point aside, ten million users is still mighty impressive!

Looks like 2005-2008 to get 10 million users: http://users.telenet.be/mmodata/Charts/Subs-1.png (from http://mmodata.blogspot.com/)

Despite the opening of the article, I wouldn't put much stock in The Old Republic being a long-term threat to WoW. Short term, it probably did take some players from WoW. Anyone who is currently playing TOR knows that the server populations have been steadily declining, particularly since the end of the first month. It isn't the same catastrophic decline that other would-be WoW challengers had, but it isn't going to hold sky-high subscriber numbers, either.

I wouldn't expect WoW to lose any more players in the next quarter due to some austerity measures they are doing (the Diablo 3 offer, Scroll of Resurrection) but it is clear that see a down trend and are trying to stem the tide.

They are not planning any new content until the next expansion which we can assume will be the standard November release (although no confirmation yet). That doesn't bode well since even I, a mediocre player in a mediocre guild, have killed Deathwing. If you haven't done it on regular, you've done it in the Raid Finder.

So what are some going to do for the next 9 months? I'd expect quite a subscriber drop during the summer with more in the fall. The numbers will jump back up with the new expansion but most likely not be back over 10 million.

Is Deathwing the current final boss? I used to play WoW back in BC, and I LOVED it (a little too much to be frank, grades suffered quite a bit). The triumph of your guild taking down a boss after struggling with it for weeks couldn't be matched. After Wrath came out, content was getting cleared so quickly that I didn't find it fun anymore. I'm currently having a blast with SC2 though, with a large thanks to the esports scene.

Deathwing is the final boss of the current expansion. Did you find that WotLK hard modes were boring? I thought they were pretty good other than ToC.

I quit fairly early in Wrath when Naxx was cleared on our relatively casual server on day1 or day2. Good guilds still took a while to get through Kara in BC because of attunements, etc. I felt that would set the tone for the rest of Wrath so I jumped ship.

MoP (next expansion) beta started today, looks more like a summer release to me.

A Q2 2012 release is what it was on the April 2010 product schedule that was leaked and I suppose a that's not too far off. However, that same schedule had Diablo 3 and the SC2 expansion (Heart of the Swarm) as a Q4 2011 release. While Diablo 3 finally has a release date (6 months late), the SC2 expansion does not.

Having a beta in March is promising - WotLK beta invites went out around July 11th (2008) and Cataclysm beta invites went out on June 30th (2010). Unless they are farther along than usual, maybe we can expect a release in August?

I can't find the exact listing anymore but Blizzard job postings was searching explicitly for people to develop a new MMO in a completely new settings (no star/warcraft, diablo). This was a few months ago

http://us.blizzard.com/en-us/company/careers/directory.html#...

They've been working on a new MMO for a while now, the only information that has really come out is that the internal name for the project is 'Titan'.

There's a Wikipedia page with about all the non-speculation that is currently available:

http://en.wikipedia.org/wiki/Titan_%28Blizzard_Entertainment...

Those listings have been around for a long time (or at least, listings with talk of a new MMO for a new franchise) for some 5 years now, iirc.

Diablo 3 and SC2 should hold them for a while.

How much round about revenue have they made off of WoW? And how much profit?

Last I heard they are working on a new MMO. The name Titan got leaked a while back.

Titan is mentioned in the article. According to the author it is targeted towards a more causal gaming audience and not intended to be a WoW replacement.

I'm going to guess they take a break to lounge on their huge pile of money then ramp up Diablo 3 stuff.

Jump on the iOS bandwagon or get left behind ....

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