View more from World of WarcraftActivision Worried That WoW May Become Obsolete?
In its 2009 annual report for investors, Activision-Blizzard recognizes WoW in several "risk factors"
Activision-Blizzard filed its annual report for investors on March 1, which summarizes the publisher's 2009 fiscal year. The report isn't exactly what most players would consider a leisurely read, although it does provide a few interesting details about the publisher's concerns with World of Warcraft's performance as of late. When it comes to investor reports, concerns like these—and the detailing of potential risk factors—is standard practice. Still, the report provides some insight into recent community topics like WoW's subscriber base finally leveling off, as we discussed in a news-editorial last month.
If you've been following the recent NetEase fiasco in China, it should come as no surprise that Blizzard's international subscriber base took a substantial hit last year. WoW's continued success in the Chinese market—which accounts for several million of its worldwide players—hinges on its approval in 2010: "Having World of Warcraft unavailable for play or available only on an unpaid basis would result in lost revenues and income, and having it unavailable for a prolonged period could have a negative effect on our reputation and subscriber base in China," according to the report.
Aside from the obligatory factors like "inflation, recession, rising unemployment and volatile gasoline prices," Activision-Blizzard is keeping a close eye on the social networking (Facebook games) and portable (iPhone) markets, fearing these burgeoning mediums could someday render WoW obsolete:
"Future increased consumer acceptance and increases in the availability such games or other online games, or technological advances in online game software or the Internet, could result in a decline in platform-based software and negatively impact sales of our console and hand-held products. Newer technological advances in online game software may also render products such as World of Warcraft obsolete."
The company also recognized a few WoW- and MMO-specific risks it's facing. "If consumer demand for World of Warcraft games declines and we have not introduced new MMORPG or other products that replace World of Warcraft 's potentially decreasing revenue, or added other sources of revenue, our financial condition could suffer," the report reads. In addition, Activision-Blizzard reiterates its need to "refresh World of Warcraft or develop new MMORPG products," according to the report.
The publisher also mentions the emerging prominence of "online functionality" in video games, echoing the recent changes to its Battle.net platform and its upcoming integration with other Blizzard games like StarCraft 2 and Diablo III. In addition, Activision-Blizzard refers to itself in the report as a "hit-driven" business and recognizes its need to stay one step ahead of competitors, who "may develop titles that imitate or compete with our 'hit' titles, and take sales away from them or reduce our ability to command premium prices for those titles."
New games will emerge that challenge WoW and then surpass it. Games with better graphics have already come out, but graphics is never what made WoW so popular. It was the artistic style, the accessible game play, taking concepts in the industry and improving upon them, as well as developing a few new ones of their own. If anything, WoW's modest graphic engine is a big part of why WoW's been such a hit -- super-cool, amazing graphics means only the small sliver of people in the world with very expensive gaming machines will be able to play it, not enough to attract a 11.5 million player base.
Honestly, I wouldn't be surprised if Blizzard's the first company to make the biggest competition to WoW, though I think Bioware's TOR will most likely be the first. I'll honestly be shocked if that game doesn't at least hit 5 million subscribers within a year or two. But when WoW is challenged or even surpassed in terms of subscriptions, that doesn't mean it'll be "dead."
Even though it was agreed that Blizzard would continue autonomously...all it takes is a share holder vote to change that. And if he says he can triple their investments by shutting WoW down; they'll give him the power to do so.
...only death lasts forever
Isn't that pretty much what happened with Star Wars Galaxies? They don't make expansions for it but keep the servers up for the handful of people who actually want to play it.
That being said, the numbers will decline. But never will it become obsolete (in the next decade time frame). Obsolete is a poor choice of words. The numbers will invariably go down. Wow does have alot of casual gamers, some of whom may be susceptible to facebook games etc. But I still feel that number is low. MMO's have an addictive quality to them, in that they provide rewards for time played. As I mentioned, as long as Blizz still gives these rewards to the players, the customer base will be high. But eventually wow won't be so trendy, and people will move on. Their sales (in terms of active accounts) will invariably go down at some point. But obsolete?
Obsolete to me means games that have such inferior gameplay and/or graphics they are no longer being played by a significant portion of the gaming population. A thing to note is facebook games and iphone games do not have the capability of having better graphics or gameplay than wow. Although perhaps 15 years from now they will. So to me, wow becoming obsolete is a very longterm problem. Decades perhaps.
As I said, obsolete is a poor choice of words. It implies they won't make money on wow. As wow's numbers go down, programmers will be assigned to other things, so the associated costs will go down in proportion. They are right in thinking they need to widen their income base, and not put all their eggs in one basket. They should branch out into other gaming platforms even more. But I see no reason to "panic" and pull the plug or reduce funding for wow further development.
Edited, Mar 4th 2010 9:00am by thrashering
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