3DS Hacked Already

Posted by Daeity On Saturday, February 26, 2011

Remember last month when Nintendo said that the 3DS was unhackable, and that piracy was a thing of the past?

Well, it was just hacked.. a few hours after the Japan launch.

The R4i team (not to be confused with the original R4 team) managed to get their DS flashcarts working on the 3DS. These aren't 3DS games mind you, just DS flashcarts - but they're fully working on the 3DS allowing you to play DS games.

Only a matter of time before you'll start seeing the 3DS gaming library on torrent sites though.. unhackable indeed.

RIFT Hits 1 Million Subscribers - OMG

Posted by Daeity On Thursday, February 24, 2011

Various gaming news sites have already started stating that RIFT has hit 1 million subscribers. I'm sure you'll see more news articles about this over the next few days too.

But just like Blizzard, the truth is in the details. =]

Here is Trion's official announcement:

RIFT™ HEAD START KICKS-OFF TODAY AS TRION ECLIPSES
ONE MILLION REGISTERED ACCOUNTS

Names of Rift public servers revealed on the game’s official forums

Trion Worlds announced today that more than one million accounts have been created to date, signaling a high level of interest for the company’s first massively multiplayer online game, Rift™, which is scheduled to launch March 1st in North America, March 3rd in pan-European countries, and March 4th in the UK. The news hits just as the game’s Head Start period begins, giving pre-order customers advance playtime before servers officially open on launch day.

Launching with 33 Head Start servers, Rift will feature dedicated realms for PvP, PvE, and role-playing players. Servers are live today, coinciding with the game’s Head Start period, which lasts until the game launches next week. Find the official server list on Rift’s official forums at: http://forums.riftgame.com/showthrea...48#post1198848
One million accounts have been created to date. That includes the hundreds of thousands of open/closed beta testers over the past several months. It might even include players who created new accounts on their forums, as anyone is able to create a new account to post on their forums even if they can't play the game (for now anyways.) Here are the beta key numbers that I am aware of: MMORPG.COM passed out 175,000 beta keys (7000 VIPs), WarCry gave out 2,000 keys, MMOHUT gave out 5,000 keys, GameZone.com gave out 25,000 (1000 VIPs), Gamestar.de gave out 125,000 (5000 VIPs), and ZAM "burned through" 125,000 beta keys (5000 VIPs).

You know.. it's funny because I'm saying "it's just like what Blizzard does" but as a negative connotation. Usually that doesn't happen.. users often claim that games will copy good ideas from Blizzard ("oh, just another WoW clone", "same spell name"), but when have you ever heard someone claim that they copied something _bad_ from Blizzard? (e.g. "I can't believe they're doing the same thing as Blizzard, it's going to be a mess.. an even bigger screw up.") I don't think it happens very often.

Zul'Gurub is Back

Posted by Daeity On

Not sure if you've read older posts, but way back in September of 2010 I had said that the ZG mounts would be making a comeback. I couldn't find any other posts to the contrary.. all of the news and WoW sites were all saying that the mounts were gone for good.

I had heard something else though. =]

Glad to see that everything I wrote about so long ago has finally come to fruition - the mounts, the Insane title, and the Qiraji Battle Tank available for more players and outside of the instance.

In regards to new Cataclysm realms, it appears that everything was all setup internally for new realm deployments too. But, the "Cataclysm experiment" failed to meet Blizzard's expectations and it looks like it has actually resulted in a reverse flow of subscriptions unfortunately. =[

This is good news for their next expansion pack however (or even content patches between now and then.) It means that they'll really have to do something awesome to bring players back. I'm hoping for a couple new Hero classes, a new crafting profession (create relics/wands/bows/fletching or elemental poisons for rogues), class-specific quests (like a Rogue's Den that issues daily assassination quests that require cunning), and/or maybe a third faction (with all brand new classes/races "from another dimension" to adjust the lore.) Paid class changes, larger backpack, more character slots, or progression servers might be interesting too.

Active Subscriptions Revisited - Part 2

Posted by Daeity On Wednesday, February 16, 2011

WoW Subscriptions Around The World

In January 2007, when Blizzard announced 8 million subscriptions worldwide (Source):

China: 3.5 million
North America: 2.0 million
Europe: 1.5 million
Remaining Territories: 1.0 million

In January 2008, when Blizzard announced 10 million subscriptions worldwide (Source):

China: 4.5 million
North America: 2.5 million
Europe: 2.0 million
Remaining Territories: 1.0 million

Blizzard hasn't made any other official announcements detailing breakdown of subscribers per geography since then, but based on growth trends I think it's pretty safe to assume that their current (12 million) subscribers are approximately:

China: 5.5 million
North America: 3.0 million
Europe: 2.5 million
Remaining Territories: 1.0 million

These figures actually confirm a lot of other estimations out there that put Chinese subscriptions at between 5 and 6 million total. Or basically, "about half" of total worldwide subscriptions.

How many real players are there, though?

In North America and Europe, this information is really difficult to confirm. Blizzard does not release this information to the public so it's up the users to figure out approximate counts.

The Warcraft CensusPlus UI Mod is an addon for WoW where players can poll players online, and all of the information is collected to generate an approximate census of WoW in NA and EU. However, this information is not very accurate, there's a lot of duplication of numbers, and data can be skewed or altered by users.

Right now, for example, total NA and EU players are calculated to be 6,417,374 total users on the census page. However, according to Blizzard, their subscription count in NA and EU is about 5.5 million maximum. =]

In China, however, it's a different story.

NetEase operates WoW in China, not Blizzard, and they're not as restrictive with their policies or information. (Gold/Account trading is perfectly legitimate there by the way.) NetEase publishes raw data across all of their realms, and is available in census format (showing peak logins for both factions and on each realm).

According to Blizzard, total subscribers in China are about 5.5 million. According to their servers, however, total players peaked at about 2.4 million as of this month. That's the most I've ever seen it.

Estimated players in NA/EU

For this, I'll start out by using Blizzard's official announcement from January 2008 when they announced their 10 million subscribers.

China: 4.5 million
North America: 2.5 million
Europe: 2.0 million
Remaining Territories: 1.0 million

During this time, their Net Revenue for World of Warcraft was $275 million. Keep in mind, that this figure also includes WoW sales, Paid Services, Pets, etc.

Since we know how much they pay for WoW subscriptions in each of these geographies, we can get a much more accurate estimation of how many players there are at the most.

China pays ~$7.27 per month
North America pays ~$15 US per month.
Europe pays ~$17.6 (12.99€) per month.
Remaining Territories pay about ~$15 per month.

NetEase, however, has a special contract with Blizzard. NetEase collects subscription payments, and they pay Blizzard a 55% Royalty Fee. So, Blizzard is collecting ~$3.99 per month from each Chinese subscriber.

Using these figures and their subscriber counts, here's what their revenue should have been:

China: 4.5 million x $3.99 x 3 months = $53,865,000
North America: 2.5 million x $15 x 3 months = $112,500,000
Europe: 2.0 million x $17.6 x 3 months = $105,600,000
Remaining Territories: 1.0 million x $15 x 3 months = $45,000,000

That's a total of ~$317 million when it _should_ have been $275 million.

That $275 million figure also includes a ton of other revenue too (game sales, paid services, etc). For example, if subscriptions were to totally match revenue, then there would be 8.6 million players out of 10 million subscribers. However, if there was $50 million worth of game sales and services during that time, then the real players would have been 7 million out of 10 million subscribers.

So, let's try something more recent (e.g. 12 million subscribers) and where we know approximately how many sales there were out of the total revenue to get a better picture.

During the third quarter ending September 30, 2010, total WoW revenue was $289 million. During this period, Blizzard launched WOTLK in China (Aug 31) and they peaked at 12 million subscribers. Since Chinese players did not need to purchase WOTLK, this provides a better revenue figure to work with since it won't include those larger amounts of Game Sales. (Paid Services, Pets, and minor sales will still be included in this total revenue figure however.)

China: 5.5 million x $3.99 x 3 months = ~$65.8 million
North America: 3.0 million x $15 x 3 months = $135 million
Europe: 2.5 million x $17.6 x 3 months = $132 million
Remaining Territories: 1.0 million x $15 x 3 months = $45 million

So, total revenue _should_ have been about $378 million, but it was $289 million instead.

Let's say however, that there are a total of 3 million real players out of 5.5 million Chinese subscribers, and re-adjust those numbers. That's still $342 million though.

Hmm.. okay, let's say China player count is 50% of official Subscriber counts (like what it should be). And, all of the other geographies are 3/4 of their official counts.

That's a total of $267 million, which is much closer to the $289 million total. That also leaves $22 million in potential game sales, pre-paid services, pet sales, etc. If that's the correct number, that would mean that there are 7.6 million real players out of 12 million "Subscribers" worldwide. Does $22 million sound too low or too high for all of those purchases during a 3 month period though?

Let's get an absolute maximum figure: Total real revenue was 76% of what it should have been, so if you apply that number to total subscribers that gives you approx. 9.17 million players. That's the absolute most it could ever be, assuming that there were no game sales, no paid services, no pet sales, absolutely nothing but subscriptions during that 3 month period.

Of course, we know that's not true.. if we knew how much Blizzard sales (outside of subs) are during a 3 month period we could get a much more accurate estimate. For now though, real players are probably about 7.5 to 8 million out of 12 million total.

Previously, it was estimated (taking a different approach) that the maximum possible number of players were about 7.2 million out of 11.5 million total. (That's equivalent to 7.5 million out of 12 million.)

However, there's one important item I've been leaving out. In April 2009, NetEase paid for a 3-year license agreement in the amount of $30 million for the right to operate World of Warcraft. In addition to that flat rate, they also pay recurring license fees, royalties, and consultancy fees to Blizzard. (Several sources estimate "minimum annual revenue shares of $180 million" for example, meaning that they must pay Blizzard at least $15 million per month. Is that minimum subscription, or is that on top of royalty fees?) There could very well be another $30-45 million, for example, included in their revenue figure that has nothing to do with subscriptions. (That would reduce 7.5 to 6.8 million.)

However, for arguments sake I'm using the more inflated figures in Blizzard's favor.

The Magic Number

One thing to remember too is that subscription numbers are always fluctuating from month to month, and there are always different factors at play (seasons, server issues, ban waves, new expansion packs, boring content, etc.) There are always players coming and going from the game (e.g. new players or attrition.) Over one quarter, 100,000 players might leave because of boring content.. but 60,000 new players might join.

Blizzard only announces when they peak at certain numbers (maximum number of simultaneous "Subscriptions"), but if you look at all of the possible real players who have joined, played, and stayed or left the game, it's possible that World of Warcraft has cycled through 20-40 million unique individuals around the world over the years. That's actually really cool. =]

(But it's impossible to know the number for sure unless Blizzard releases all total WoW Classic digital/retail/everything sales since day 1.)

Over the past 3 years, though, the subscription numbers have plateaued (no longer growing at explosive rate seen before) and it seems like the "magic number" they're hovering around for real players is probably between 6.5 and 8.5 million (at any time playing World of Warcraft). That's still a freakin' huge number of players for a 6 year old game.

This gives you a really good idea of Fantasy MMORPG POTENTIAL too. Given that you have an awesome game, great gameplay, an addiction factor, and your game is as popular as it could ever be - your maximum potential number of players will be about 6.5 to 8.5 million players. As a publisher, if you can attain that amount, you've reached the maximum potential possible for that game. I don't think SCI-FI MMORPG can reach the same heights as Fantasy.. but Real Life Simulations (Call of Duty / GTA) could probably exceed it as that genre has a larger market demographic.

Active Subscriptions Revisited - Part 1

Posted by Daeity On Monday, February 14, 2011

I already have an old entry that explains Active Subscriptions, and multiple blog posts covering many facets of this topic. However, I decided to make a new entry to help further explain that there is a difference between real players versus Active Subscribers™. But, I'll be taking a different approach.

Blizzard Has 12 Million Subscribers

In the older post (August 2010), I examined real player numbers during a time when World of Warcraft's Subscriber count was officially 11.5 million.

However, this became a major problem for many readers (here and on other forums). The biggest excuse used was, "Well.. these numbers must be totally wrong because Blizzard's last announcement stated 12 million players for a fact! This is really old now too, so none of these numbers apply to today."

Just to clear things up, the same concept of real players vs Subscriber counts apply no matter what Blizzard's Subscribers presently are.

For example,
Blizzard announces 9 million Subscribers, but there are 5 million real players.
Blizzard announces 10 million Subscribers, but there are 6 million real players.
Blizzard announces 11 million Subscribers, but there are 7 million real players.
Blizzard announces 12 million Subscribers, but there are 8 million real players.

Based on those trends, I think it's safe to assume that if Blizzard announces 13 million Subscribers (and absolutely no variables change), there are probably about 9 million real players.

So, if this post is read towards of the end of this year, when Blizzard reaches 13 million players for example, the same concept applies. This should be a no-brainer.

Blizzard Only Makes Announcements When They Peak

When Blizzard reaches a certain Subscriber milestone, they make an announcement. There might be an announcement if they reach 12.5 or 13 million Subscribers for example.

On Oct 28, 2008 Blizzard "surpassed 11 million subscribers". On Nov 21, 2008 Blizzard "reached 11.5 million subscribers."

In February 2010, Mike Morhaime stated that "there are currently 11.5 million World of Warcraft subscribers, the same number of users the game had in December 2008." That's from Dec 2008 to Feb 2010! There was no growth during that time, but they didn't make any announcements of Subscriber decay.

In fact, there was quite a substantial amount of Subscriber decay during this time.

From June 2009 to October 2009, The9 was transitioning ownership of WoW to Blizzard's new partner NetEase. During this time, all servers were offline and there was no WoW in China.

When servers were brought back online in October 2009, NetEase was ordered during the following month (Nov) to stop charging current players and stop new registrations until the Chinese government could approve the game. From November 2009 to March 2010, NetEase was not allowed to collect subscription fees or register new players.

Ignoring this fact, let's just examine the 4 months when servers were offline and there were no subscriptions or players.

That was a loss of approximately 5-6 million players world wide. There were no announcements made, e.g. "Blizzard announces World of Warcraft is down to 5 million worldwide!" After all, why would they?

However, during this entire time news websites around the world continued to promote 11 or 11.5 million Subscribers, even though the number was closer to half.

On August 5, 2009, Activision Blizzard held their quarterly earnings call for the quarter ending June 30, 2009. Now, keep in mind that there was no WoW in China during June of 2009.

Activision Blizzard stated in their SEC filing that World of Warcraft "is played by more than 11 million subscribers worldwide."

In that same Form 10-Q, they also stated: "Our new licensee for World of Warcraft in China will not be able to begin offering the game in China on a paid basis until we obtain all required regulatory approvals, and we do not know when that will happen. World of Warcraft was unavailable to players in mainland China from June 7, 2009 (local), the date on which our prior license arrangements expired, until July 30, 2009 (local), when our new licensee began making the game available to our previous players in China in a test format without charge."

(Note: They still didn't have all approvals, so the date was extended beyond July 30, 2009 - but that was the limit of the information that they knew at the time.)

So, even though they were around 5-6 million official Subscribers during June - Blizzard still stated in an SEC Filing that WoW is played by more than 11 million subscribers worldwide.

This is completely honest and true, no matter what you might believe. It's all about wording, and that's one of the points I'm trying to make.

1. They only make announcements when they peak Subscribers.
2. When they say "20 million Subscribers", that doesn't necessarily mean that they actually have "20 million subscribers" (or anywhere close to that number) at that time.
3. When they say "20 million Subscribers", that doesn't necessarily mean real players.

It's all based on wording and their last official census announcement.

Right now, for example, they have "12 million Subscribers". Even if something bad were to happen, Blizzard can still tell news outlets "At last count, we are at 12 million Subscribers" or they can say:

We're currently at 12 million Subscribers worldwide!

*based on internal figures and calculations.
Even if Subscribers (or real players) are actually closer to 4 million. It's still a completely true statement.. based on their own findings or methods.

Why Do You Keep Capitalizing "Subscribers"??

I want to ensure that there's a distinction between Blizzard's definition of "Subscribers" and what you might consider a subscriber.

Yes, Blizzard has a special internal definition of what a "Subscriber" actually means. If that's not proof alone that there are big differences between real players and Blizzard Subscribers - I don't know what is.

Subject Lines and Header Titles might say one thing, but please read the fine print. All MMO companies do this with their numbers, it's not just limited to Blizzard and this shouldn't be a big secret (apparently, though, most gamers are just in complete denial about this distinction).

Here is Blizzard's official definition of a Subscriber™:
World of Warcraft’s Subscriber Definition

World of Warcraft® subscribers include individuals who have paid a subscription fee or have an active prepaid card to play World of Warcraft, as well as those who have purchased the game and are within their free month of access. Internet Game Room players who have accessed the game over the last thirty days are also counted as subscribers. The above definition excludes all players under free promotional subscriptions, expired or cancelled subscriptions, and expired prepaid cards. Subscribers in licensees’ territories are defined along the same rules.
So basically,

- a Subscriber is not one single player.
- a Subscriber is any account that has a paid subscription fee (if you haven't logged in, but still have an active subcription - then yes it counts).
- a Subscriber is ALSO any account with a first month's subscription.
- a Subscriber is ALSO any person who has an active prepaid card.
- a Subscriber is ALSO any "Internet Game Room" players who have accessed the game over the past 30 days.

What this means:

- If an account gets banned and a new account is purchased during the same month, that counts as two active subscriptions for one user.
- You pay for the month at the start of the month. When you get banned, you still paid for that entire month and Blizzard won't be refunding your money. The banned/cancelled account will no longer apply once you reach the end of the month.
- A "first month's subscription" is very common especially for gold farmers and gold sellers/traders who need to create new accounts frequently.
- Even though "expired prepaid cards" are mentioned, the cards in fact never expire. You can purchase one in NA/EU, but wait several months/years to activate it for example. When you purchase a prepaid card in China, you can keep adding time to it for as long as you want.
- Blizzard does not provide a definition of an "active prepaid card", so it's possible but highly unlikely, that prepaid cards mean any card that have time on them (whether that time has been used or not.) Since Blizzard does not have immediate access to Point of Sale data, they would base "active prepaid cards" on restocking quantities. If a retailer requires 50 new cards, for example, it's assumed that there are now 50 "active prepaid cards" in the hands of Subscribers, and those would therefore count as a Subscriber.
- Since the game is free in China and it's inexpensive to play, many users have multiple accounts and multiple pre-paid cards. 1 player might represent 2-4 Subscribers for example. These are all considered active pre-paid cards as long as there are still minutes on it.
- Pre-paid cards in China hold minutes (2000 minutes or 4000 minutes for example). If the cards still have 5 minutes left on them, and they are thrown out, that still counts as an Active Subscription. Until the card is completely expired (used up), then it counts as an active prepaid card as per Blizzard's definition.
- There are players worldwide who have multiple accounts (multi-boxing), not a large amount but it exists. One player might represent 8 Subscribers for example.
- "Internet Game Room" players are an interesting scenario. In China for example, players can goto "Game Rooms" (e.g. gaming caf├ęs instead of playing from home) where they can pay for 1-2 hours of gameplay for example. Any user who plays within the 30 day period is counted as an official subscriber. So, you could login to WoW from a Game Room, play for 1 hour to check mail or guild activities and then not sign-in again for an entire month - that still counts as an Active Subscription. Imagine the sheer number of unique logins from Game Rooms? "Game Rooms" as Blizzard calls them are extremely popular in China.

Not Done Yet

Since this entire thing is going to get pretty big, I'm going to divide it up into parts.

From what you've seen so far though, you can probably guess that there is indeed a big difference between what you view as a subscriber (real player? one account?) and what Blizzard defines as a Subscriber.

Next up, I'll show you what Blizzard has said about Subscribers around the world, how many real players are in China, and how many are estimated to be in North America and Europe.

In NA/EU, Blizzard does not publish actual player counts (versus Subscribers). However, in China the WoW Servers are run by NetEase and they do publish actual player counts. I think you'll be surprised by the results.

Leaks, leaks, and more leaks

Posted by Daeity On Sunday, February 13, 2011

I wonder if there are any websites out there that keep a running total of leaked games? (Well, major game releases anyways.)

Here are the big ones I can remember, including these 2 most recent ones:

Killzone 3 (PS3) - Feb 12, 2011
Crysis 2 (PC) - Feb 11, 2011
COD Black Ops (X360) - Oct 18, 2010
Halo: Reach (X360) - Aug 20, 2010
Halo 3 ODST (X360) - Aug 28, 2009
The Sims 3 (PC) - May 18, 2009
Spore (PC) - Aug 31, 2008
GTA IV (X360) - Apr 23, 2008
Halo 3 (X360) - Sep 21, 2007
GTA San Andreas (PS2) - Oct 20, 2004
Halo 2 (XBOX) - Oct 13, 2004
World of Warcraft (PC) - Jan 4, 2004
Gran Turismo 4 (PS2) - Nov 2, 2003
DOOM 3 (PC) - Nov 3, 2002
Half-Life 2 (PC) - Oct 2, 2003

Crytek is blaming pirates for the leak. Which is weird.. wasn't it leaked by an internal (possibly disgruntled) employee? Pirates can be blamed for spreading the game, but not for leaking it in the first place.

Did Blizzard blame piracy when a member of their senior management team leaked confidential subscriber data, financials, and product release slates? Even Carmack had it right when the DOOM 3 leak happened, he blamed ATI for the leak - not pirates.

Did you noticed something else about these leaked games by the way?

They went on to experience HUGE commercial success and awards. These were top selling games worldwide! Even after the GTA IV console version was leaked, it still went on to sell what.. over 19 million copies by now? Doom 3, GT4, The Sims, Half-life 2, Halo.. these are the best selling games in the world.

The only trend I see here is that leaked games go on to become hugely popular and financially successful games.

If the game is bad, though, you can just blame piracy for the bad sales. Right, Crytek?

Game leaks, and other forms of media, have been pretty common for decades actually. I'm sure some news sites may try to link the current popularity of Wikileaks to leaks like this.. "the reason for these leaks is because we live in a Wikileaks generation." Even though that has nothing to do with it.

Now that I'm thinking back, what other kind of stuff has been leaked? I remember the X-Men/Hulk/Harry Potter films being leaked.. DVD screeners, tons of TV series leaked months in advance. Haha.. ah yes, I remember when the pilot episode of Doctor Who was leaked back in 2005 and BBC spokeswoman Annie Frederick claimed that it wasn't a publicity stunt and that the leaked version was completely different from their final version - apparently, the leaked version was unfinished and an incomplete rough cut. After the "real" version came out, it was discovered that the only real difference between the two was the intro music. Good one Annie. Since viral marketing was all the rage back in '05, her claims led me to believe that it probably WAS a publicity stunt after all.

Anyways.. for other (real) internal leaks, it just goes to show that employers need to improve their hiring standards and screening processes, and once they get good employees, they need to treat them very well. There's nothing worse than a disgruntled employee, they'll end up costing you more than any possible revenue they could have made for you. (Things like weak performance, theft, sabotage, influencing other employees, complaining about your company and changing perceptions, creating hostile work environments, security issues, being a bottleneck, and vandalism tend to cost companies a lot of money.)

* UPDATE:

Here were some other games that leaked. If I find any others, I'll keep updating. (If you know of any, just leave a comment and I'll update/change dates too if I got one wrong.)

Assassin's Creed (PC) - Feb 24, 2008 (Ubisoft blamed the disc-replication firm Optical Experts Manufacturing for the leak.)
Fable 2 (X360) - Oct 16, 2008
Fallout 3 (X360) - Oct 8, 2008 (Bethesda blamed the press for leaking a review copy.)
Far Cry 2 (X360) - Oct 16, 2008
Manhunt 2 - Sep 7, 2007 (Sony Europe employee was blamed and later fired.)
Painkiller (PC) - Dec 31, 2003
S.T.A.L.K.E.R. (PC) - Dec 30, 2003
S.T.A.L.K.E.R. Call of Pripyat (PC) - Sep 28, 2009
World of Warcraft Expansion Packs (Alpha TBC, WOTLK, CATA months before release.)

I think Manhunt 2 is proof alone that controversy and game-leaks can sell even bad games well. Manhunt 2 sold 500,000 more copies than they should have. =]

* UPDATE (02/18/2011):

Bulletstorm (X360) has apparently been "leaked", but in fact the street date was just broken by a retailer. So it's not really considered a leak, but it has been out for 4 days before retail.

* UPDATE (03/06/2011):

Homefront (PC) - Mar 6, 2011 (Kaos Studios indirectly blamed Steam)

* UPDATE (11/07/2011):

Battlefield 3 (PC) - Leaked Oct 16, Release Date: Oct 28
Gears of War 3 (XBOX360) - Leaked Jul 2, Release Date: Sep 20
Batman: Arkham City (XBOX360) - Leaked Oct 13, Release Date: Nov 21
RAGE (XBOX360 / PS3) - Leaked Sep 30, Release Date: Oct 4
Deus Ex: Human Revolution (X360 / PS3) - Leaked Aug 18, Release Date: Aug 23 (Retailer broke street date.)
Resistance 3 (PS3) - Leaked Aug 20, Release Date: Sep 6
The Witcher 2 (PC) - Leaked May 8, Release Date: May 17
Call of Duty: Modern Warfare 3 (X360) - Leaked Oct 25, Release Date: Nov 8
Mass Effect 3 (X360) - Leaked Nov 5 2011, Release Date: Mar 6, 2012 (Bioware blames MS XBOX Live "Human Error")

GTA V Predicted For 2011

Posted by Daeity On Thursday, February 10, 2011

An interesting read on 1UP following those most recent Take Two announcements.

Our favorite Wedbush Morgan analyst Michael Pachter is predicting that GTA 5 will be released this year. You'll recognize his name from earlier posts, he's the same gentleman who made the prediction that Cataclysm sales alone would push Blizzard's Earnings well over $600 million for this past quarter (that was only for Cataclysm sales during a one month period too, and excluded pet sales, older WoW sales, and Paid Services. In fact, it probably would have been a prediction of $350 million plus the usual $300 million subs if they were included.)

Oh! A while back, Pachter also predicted GTA 5 would be released in 2010. =]

Here were some of his other past predictions/comments:

1. Mafia II unlikely to be profitable and would not recoup the cost of game development. (Source)

Take Two still has DLC development underway for Mafia II this year. On Steam, it was in the Top 10 of best selling games for 2010 (even though Mafia II came out just 4 months before the end of the year.)

2. Starcraft 2 would sell 6 million units on opening day, however it ended up being 1.5 million instead. (By the end of the first month, they sold 3 million units worldwide and by end of February they sold 4.5 million units.)

After first day sales were released by Blizzard, he adjusted his prediction and made it 5 million total copies within 2-3 months. However, it took 7 months before it reached 4.5 million units. =]

I didn't think it was really fair though, making such a big change after seeing all of the sales details. Not that it helped either though..

3. He was highly skeptical of Red Dead Redemption, and stated that it was not blockbuster material.

4. On a related note, he's predicting that LA Noire will be comparable in sales and just as successful as Red Dead Redemption (after he apologized for underestimating RDR in the first place.)

Personally, I have my doubts about LA Noire though.. it looks like a great game, but it's like releasing a natural disaster movie in the middle of vampire film/TV season. I've been watching Google/Twitter trends and monitoring other various patterns, but there's very little interest in LA Noire so far (especially in comparison to other big name releases coming out during the same period).

I'm worried that the game might end up being too linear or storyline driven, with most of the game taking place with cut scenes and NPC interaction (after all, they spent a lot of time and money on voice acting and facial imaging). If there are too many NPC conversations and detective mini-games that are impossible to lose, it takes away from the freedom and excitement of exploring in RDR and GTA. What if there's little in the way of side quests (errr... "investigations") and everything in the game is based on one single storyline or one investigation after the other? Then it just becomes an interactive visual novel.

The other thing that worries me is that people are mostly talking about how "great it looks", but very little about the actual gameplay, story, characters or music. I still think first month's hypetastic sales will be very good mind you (I'm predicting ~2.5 million worldwide for the first month), but I don't think they will be as high as RDR in the long run. I also think Michael Pachter will be left disappointed with his own sales predictions. =] Hopefully, Team Bondi is developing a very stable game too.. this game is going to make or break them.

5. He thought that Ubisoft DRM was a good idea.

6. He said Borderlands would fail badly.

7. He's predicting that the Activision-Bungie game will sell 10-15 million on opening day. I'll have to come back to this one at a much later date.

His predictions, of course, have a lot of IF's and BUT's. IF it's as popular as Halo, IF it's released on multiple platforms, IF they have a good sales day.. blah blah blah. Come on, where's the hard science and figures?

From what I've seen online, he wasn't too bad going back 5-7+ years ago but things have gone very bad for him since late 2008. So, it's probably a good idea for him to leave his predictions more open ended like he did with the Activision/Bungie unannounced game.

Activision Blizzard Announcements

Posted by Daeity On Wednesday, February 9, 2011

Some mildly interesting stuff:

- Cataclysm sales were supposed to push them over $600 million in revenue (for Cataclysm sales alone, excluding new subs and older WoW game purchases), but they earned $544 million instead. GAAP Revenue was $340 million for this most recent quarter, but they're deferring $204 million to next quarter. Nice way to show a constant revenue growth each quarter. =]

- Earnings basically showed those 4.7 million Cataclysm sales over 3 months as detailed earlier. Since they were expecting to earn about $320 million (if Cataclysm never launched) for the quarter, and that $544 million included all new WoW/TBC/WOTLK sales as well, there doesn't appear to be much of an increase in new subscriptions at all. Cataclysm was supposed to be the expansion pack to bring back all of the old players, but the impact has been minimal.

- That's actually good news for their next expansion pack really. Since the shattering experiment failed, they'll need to do something really big for the next expansion pack to get player's interest back: tons of new dungeons, a couple new professions, and at least two new hero classes would be nice. Maybe a third faction? =] It's going to have to be something very impressive to bring back the masses.

- The new "Project Beachhead" digital platform for Call of Duty.. paid services, communication, online community, exclusive content, digital downloads, and such. It'll basically be Battle.net for the CoD franchise - remember how they eventually wanted to bring everything together as one gigantic "Battle.net"?

- They're discontinuing Guitar Hero and disbanding associated business units (e.g. laying people off, closing studios). They're also killing off True Crime: Hong Kong.

- Activision Blizzard will be announcing an "innovative new universe with broad appeal that will be revealed at Toy Fair later this week and will bring the world of toys, video games and the Internet together in an unprecedented way." This is the first time Activision will be exhibiting at Toy Fair and this isn't for Blizzard related games, so I'm not really interested. It will probably be about their LEGO series or Zhu Zhu Pets or something.. meh.

- Outlook not so good for Blizzard titles in 2011, but they promised at least 2 major releases in 2012. Those would most likely be Diablo 3 and their next SC2 Expansion Pack (Heart of the Swarm) though. Their next-gen MMO is still years away.

- NetEase will be doing their Starcraft 2 launch in China. I wonder how it's going to be received in China..

- Heart of the Swarm will have more details (e.g. release date?) in the "coming months". Diablo 3 beta will be starting soon too (they're playing it cool with Diablo 3, as usual, they don't want to make any announcements yet and want to make sure the game is perfected before release).

The call is over now.. I was hoping for more, but not surprised at all.

FYI.. their stock is falling rapidly as a result of this call too. Mostly because of their statement on low revenue/guidance this year. 2011's going to really suck for both Activision and their customers. =[

* UPDATE:

Confirmation regarding lay-offs. Both Vicarious Visions and Freestyle Games have been hit with notices shortly after the meeting. According to Activision Blizzard's 8-K, they'll be getting rid of approx. 500 employees. The decision was made Feb. 3, and will be taking place on March 31 for the staff.

This same time last year, they laid off approx. 200 people. Apparently, February is the time of month when the non-performing studios need to start worrying.

Just a reminder..

Posted by Daeity On Tuesday, February 8, 2011

Take-Two's Quarterly Earnings call is today at 1:30PM PST. And Activision Blizzard's call is tomorrow at 1:30PM PST as well.

The reason you've been seeing a bunch of new game announcements and release dates over the past couple weeks is because we're in the middle of various shareholders meetings and it's the beginning of a new year for gamers.

In the past, Mike Morhaime has used this call for official announcements like release dates, new games, and new services. Take-Two has also announced new games or release dates during this time.

Would be nice if Activision Blizzard were to announce the Diablo 3 release date tomorrow, rather than fans having to wait until BlizzCon 2011. They usually have one big announcement they want to make at BlizzCon.. so that's why I'm hoping the release date is announced much sooner.

* UPDATE:

Looks like the Take Two call was pretty disappointing and simply reiterating what everyone already knew. Their future lineup is looking pretty thin, and I think they're putting all of their bets on MLB2K11, Top Spin 4, DNF, LA Noire and BioShock Infinite. It's nice to see more of a PC lineup for 2011 and 2012 though (e.g. The Darkness 2, X-COM, Bioshock Infinite, and Spec Ops: The Line). At least we'll see X-COM this year but I was hoping for something new, oh well.. hope Activision Blizzard has some good news tomorrow.

I'm starting to get a bad feeling about DNF too.. the game is starting to look very linear and just like DOOM 3 (incl. the dated graphics.) I think there are going to be a lot of disappointed fans when the game comes out with very poor reviews and sales. So if you own stocks in TTWO, I would recommend waiting until the official release date announcement and sell off shares about 1 month before the release date. Then, just buy back shares (at a much reduced price) after the TTWO stock tumbles. =]

First QA question was about Max Payne 3. No updates today, "still being worked on" is what they said last.

He also asked about other versions (platforms and/or DLC) of Red Dead Redemption, but they don't have any announcements about it yet: "nothing to say about future iterations."

BlizzCon Revenue and Costs

Posted by Daeity On Monday, February 7, 2011

In the past, Blizzard has stated that they lose money during each of their annual conventions. I think this is another thing where it's all about wording and interpretation though.

In 2009, Frank Pearce stated that "But in terms of any kind of financial gain, it actually is a loss for us." It's a marketing investment, and the amount of loss they incurred can potentially return ten times the amount in revenue. So, he must obviously mean that it's an expensive investment initially but there is financial gain at a later date.

Say a rock concert costs $5 million to put on, but they earn $20 million in ticket sales. It's still a completely honest statement to claim that the concert was a substantial loss for the organization or that "in terms of financial gain, it actually is a loss." You can still have a financial gain, but consider it a loss.. if you were expecting a 99% profit margin for example. That's a substantial loss, even though you made profit.

Blizzard never made the same comment about BlizzCon 2010 though. So, I'm curious how much they spent and made last year.

- Renting out the Anaheim Convention Center cost them $107,650 per day.
- They were given a free move-in and move-out date, but let's assume they were given an additional two days (costs 50% of one normal day). That's a total of $269,125 in rental fees for the two day event (includes electricity, network, etc.) plus moving time.
- Entertainment costs (Tenacious D being the highest) cost no more than $400,000.
- Food services, staff and equipment rental, goody bags (which hardly cost Blizzard anything), advertising costs (promotion, tickets, hanging banners/signs), and shipping of internal equipment cost about $1 million.
- Of course, I'm overestimating here on purpose. Other than the Blizzard goody bags, I personally know how much something like this really costs. In my case though, it was over 5,000 computers setup/shipped for a much larger facility (and a farther distance away), plus seat/table rentals, cabling, food services, staff, security, signage, etc. I think BlizzCon had about half that amount.

But let's say for arguments sake that all of their expenses cost TWICE the total amount instead, so $3.4 million for absolutely everything. =]

BlizzCon 2010 tickets cost $150 per person, and the virtual event cost $40 per ticket. According to RAYV, they serviced over 550,000 customers for this past BlizzCon 2010.

There were over 27,000 attendees @ $150 person = $4,050,000
There were over 550,000 virtual attendees @ $40 per person = $22,000,000

So excluding game sales, food sales, merchandising (which has previously been described as selling "hundreds of thousands of dollars"), and other marketing/promotion factors, they earned a minimum of approx. $26 million in ticket sales alone (versus $3.4 million in expenses.)

Before live streaming, I could still see BlizzCon making a small profit (when tickets cost less) but virtual tickets for live feeds were made available in 2009 when Blizzard stated that there was a financial loss. Then again, Frank Pearce described the costs as past tense..

This is a very interesting question. Most players are convinced that Blizzard makes a loss on sales of authenticators, and it's very difficult finding information to the contrary unless you know someone who works in the industry.

There have been plenty of alternatives available, so I was always curious why Blizzard chose authenticators. For example, in-game virtual keyboards (for PIN codes or passwords) are highly successful in other MMORPG's and inexpensive to implement (but, there's no direct profit to be made by doing this). Unfortunately, despite the cost of the device, there's also the chance that you might lose your token, damage it, or have battery issues and until a replacement is shipped, you're locked out of your account.

Two-factor authentication can also be made available through other sources (besides specific mobile devices) for free. For example, a soft token through a webpage or a second PC.

Anyways..

The Blizzard authenticator is in fact a Vasco Digipass Go 6, a cheaper model of token. There's a wowwiki entry on the authenticator as well.

(Just a quick note by the way. Hardware tokens are really just small LCD clocks with a factory-encoded key. Software tokens are the same - a very basic timer application that generates a code at specific intervals based on a uniquely assigned key/seed. They don't communicate back to any centralized servers or anything like that.. yes, some people actually believe that. They're just small standalone clock algorithm and a decoder. They're not hard to create either.. a basic soft-token apps literally take 1-2 hours to program and there's even plenty of open source examples online.)

There are certain plans where you can get the Mobile Authenticator for "free", but generally the Blizzard software tokens for mobile phones cost $0.99 (you also pay for download charges.) That's $1 to Blizzard for a simple 500 kb software app. Not bad.

Hardware authenticators cost $6.50 in the US, where free shipping is available. I'll use that as a base, even though they're more expensive in other countries (£4.80 or 6 Euros plus shipping can cost upwards to £10.00 or more.)

Online retailers sell the hardware token for $10 individually, but you can purchase these yourself from resellers in bulk for about $5.

I wanted to know how much manufacturers paid for something like this though, so I contacted a source in the manufacturing industry. His response: "Bill of materials? In volume, pennies."

Apparently, the components needed for this type of token shouldn't be more than $0.90 (including the casing). So, let's say the cost of manufacturing (well, assembling) is $1 per unit at the most, and Blizzard aesthetics (i.e. "a sticker") costs $1.. even though you know that these cost a fraction of a cent. At the very most these tokens cost $3 in total to manufacture, but in reality though, they're far less. Since they ship in bulk, individual transportation costs would also be in pennies. (Note: I was also told that "tokens are cheaper to make than crappy dollar-store calculators" if that helps put things into perspective.)

So yeah.. I think it's safe to say that both Blizzard and Vasco are definitely making a significant profit on authenticator sales. I'd be really interested in seeing their contract, but I'm assuming that Blizzard takes in the larger half of their split.

I think the reason why people think Blizzard is taking a loss is because they don't understand the technology and imagine the authenticator being a very expensive piece of new technology (with a satellite uplink that decodes passwords directly from Blizzard). After all, the Blizzard sticker makes it look very cool and shiny. Or maybe, they just don't know how much it truly costs to manufacture and ship goods. Or they see online retailers selling the model for $15-30 each, and assume retail prices are just slightly above manufacturing costs.

Or maybe they just forgot the saying "there's no such thing as a free lunch". This reminds me of Blizzcon actually.. it's said that the 2009 Blizzcon was a "substantial loss" for the company.. but I wonder what they mean by that? Sure, it cost a lot up front.. but how much did they reap in longterm revenue and marketing potential?

Anyways, I just want to correct a common misgiving that Blizzard is taking a loss on authenticator purchases. It's almost as ridiculous as those claims that Blizzard has "never had a security breach" because "they're required by law to announce data breaches, which they never have so logically there's never been a breach." =]

* UPDATE (03/15/2011):

Found this project online, it's a more expensive and complicated type of token/authenticator (active proximity, not passive) for unlocking SmartPhones.

This token can be built in volume for about $0.75 USD each. It's definitely more complicated than the Vasco Digipass (which is just a fancy clock with an algorithm), but it gives you a really good idea of component costs before assembly. A really good example nonetheless for those unbelievers. =]

Talk to an electrical engineer, and they'll tell you how much things really cost.

To help put things into perspective, do you have technical support experience? How long does it take you to install a new harddrive, memory, an operating system, or scanning for viruses? Staples charges $50 for a HD, $40 for memory, $100 for an O/S install, and $200 for a scan/removal. PC users with no experience believe that these prices are reasonable.. but you know better don't you? =]

* ANOTHER UPDATE:

And here's official proof directly from Vasco, the manufacturers, themselves.

This is a 2006 document detailing the Digipass line. In 2004, the cost per token was ~$3.50. In 2005, it was ~$3.00 each. And in 2006, it cost ~$2.00 each per token. They have probably made improvements in manufacturing technology since then, and bulk sales have definitely increased quite substantially so you could assume that their DigiPass Go 6 tokens cost $2 at the very most to manufacture (parts, construction, etc.)

The ASP (Average Selling Price) is also quite interesting. Apparently, wholesale distributors sell these things for 5-20x what they cost to manufacture.

Rumor: World of Warcraft's Next Expansion Pack Named

Posted by Daeity On Friday, February 4, 2011

Another rumor which states that Blizzard's next expansion pack will be called "Emerald Nightmare".

This rumor originated on MMO-Champion.com:

Leak Confirms 'Emerald Nightmare' as Next World of Warcraft Expansion

While it will not surprise players familiar with the game's extensive lore, an anonymous source within the Activision-Blizzard team responsible for the best-selling World of Warcraft MMORPG and it's two expansions has confirmed the next to be titled 'Emerald Nightmare'. It will take places after the events of "Stormrage", a novel authored by Richard A. Knaak which explores Malfurion Stormrage's attempts to cleanse the Emerald Dream of Xavius's corruption. The source also confirmed a tentative release date of Q4 2012, consistent with the release schedule of previous expansions.
It sounds a little dubious since it's written "news style" to give the appearance that it was copied from another source, however it did in fact originate on MMO-Champion.

It was re-posted on the official Blizzard forums, however it was only up for 1 hour before Blizzard deleted the thread. You can see the original read here.

Cached copies of the Forum Post (http://us.battle.net/wow/en/forum/topic/2016644135) can be found here and here, but they won't be up for much longer though.

The user Leynah wrote: "Just got word from my anonymous source at Blizzard that this source smells and leaves crumbs all over his desk. He made no mention of refuting the claim... just complained about the guy."

As you recall, Cataclysm details were "leaked" on MMO-Champion, however that was by Boubouille (the site admin) who had a known relationship with Blizzard. This 'Emerald Nightmare' rumor was started by a new user.

It's not really a big surprise, though, if the next expansion has something to do with the Emerald Dream. Blizzard has already hinted at it in the past (future expansions packs will be "a dream and a nightmare") and it has been speculated by many users.

A future expansion pack will no doubt contain the Emerald Dream and Nightmare, but the origin of this rumor is questionable (e.g. "It will take places", "World of Warcraft MMORPG and it's two expansions" (pre-Cataclysm rumor I'm guessing), the "news-look" even though this is the original source, the age of the account, and that it was re-posted to the WoW forums seconds later by a Level 1 account named 'Fdhgj', who also then deleted their own account.) So yeah.. I'm calling bullshit on this rumor.

MMORPG's: How To Stop Gold Sellers and Account Hackers

Posted by Daeity On Tuesday, February 1, 2011

Here's a video that more people need to watch, especially game publishers and developers.

It's a conversation with Jared Psigoda, a leader in the RMT industry. He's also the individual who informed Markeedragon about the new PayPal & Blizzard relationship that's still making the rounds on the net.



He says that Blizzard has certain trends in their ban-waves. Typically, they occur before an expansion pack launches (as a clean sweep) or when they experience poor quarterly financials. He confirms that Blizzard gets a "huge revenue influx" when a ban-wave occurs, due to the sheer number of accounts requiring reactivation (Note: Monthly fees also double-up meaning twice as many "Active Subscriptions"). These accounts make up a huge portion of revenue for Blizzard as there are hundreds of thousands working in the industry.

Does any of this sound familiar? =]

It's certainly nice to have this officially confirmed by another industry professional.

He also talks about a couple other interesting topics, like which games they avoid (since there's no profit to be made) and how most "hackers" gain access to your online gaming account.

Consider first, though, the amount of money developers spend on managing the aftermath of Gold Sellers and Hacked Accounts:

- Investigation teams need training, benefits, and salaries.
- The amount of time spent investigating accounts and confirming that they are gold buyers/sellers. Or confirming cheating, hacking, etc.
- Money spent on hiring and training large quantities of Customer Support personnel (high turn-over environment)
- More Customer Support staff needed for the amount of farming, cheating, hacking, recovery, etc.
- Blizzard even had to change their own Recovery Process, which goes to show how difficult and unmanageable the situation was becoming.
- The more staff you employ, the higher the risk and/or costs of mistakes (e.g. disgruntled employees, injury liability, employee theft.)
- Stolen and hacked accounts lead to massive customer service issues. Not only is it taxing on the customer service departments, but it is also taxing on their customer retention rates.
- You also have to pay the salaries of the managers who manage these teams, and financial services (HR, Facilities, IT, etc) who serve these managers and employees.

A massive money-eating monster has been created that just addresses "clean-up operations" or the chain-reaction and consequences of something that could have been prevented in the first place. There's a word for that: negligence.

All of those issues can be fixed with very simple solutions.

How To Stop Gold Farmers

- RMT (aka secondary sales) thrives on subscription based games, not games that are heavily micro-transaction based.
- RMT is almost exclusively World of Warcraft. Gold farmers and hacked accounts would suffer greatly if WoW were to change it's model.
- If the game is Free to Play or the developer sells items/gold themselves, RMT companies cannot compete with these developers who can print their own money.
- If people stop buying gold, there's nothing for farmers to sell. So, make gold worthless like how it was done in Diablo 2. (Or find a balance.)
- The more easily you can obtain gold in-game, the more it loses it's value and drives down the profit margin of gold farmers. Eventually there's a point where the value isn't "worth enough" to farm.
- Or leave gold very valuable in-game, but simply make it "soulbound". It can't be traded, but it can be used to purchase expensive services or crafts (that take a long time to develop and collect soulbound materials for) from other players. Prices for these services/goods would be fixed as well. Or the gold can be used to buy valuable items/gear, but from NPCs instead of real players.
- Make all items Bind On Pickup, so that epic items cannot be traded.

The best solution, however, is just for developers to sell the gold themselves. It's a quick way to shutdown the virtual trading industry.

This probably won't happen with World of Warcraft, considering the verbal commitments already made to their customers - but it's a viable solution for their next-generation MMO (considering the gameplay approach and plans on increasing "real world" interaction).

How To Stop Power-Leveling Services

One of the problems that RMT has been facing (for power-leveling services and hackers alike) is IP-based account locking. When an IP suddenly changes, the account is locked, and the owner of the account needs to call Blizzard to unlock it.

Unfortunately, Blizzard has also taken it upon themselves to take additional proactive (provocative?) measures, like cancelling credit cards of innocent players overseas and screwing them over.

Nevertheless, IP based account locking is a very effective process. It's geography based at the moment, but what if they made it for location specific? For example, limiting it to a specific ISP (in case the user has a dynamic IP address) but allowing them a maximum of 2-3 different IP address "registrations" in the same geography. The other option is MAC Address locking, but maybe allow a maximum or 2 PCs and additional ones require online approval and an "identity check".

It's one option that shouldn't be a nuisance for most players anyways. =]

How To Stop Gaming Account Hackers

This might surprise many of you. According to Jared, account hacking due to key-loggers isn't as significant as account hacking due to your gaming websites.

The problem is, most players use the same email address from World of Warcraft and they register it on other websites, forums, or gaming communities. They typically use the same password as well. That's how most WoW (and other) accounts are hacked.

Chinese hackers primarily target gaming websites and forums and steal user database information. Some of the gaming news sites (forums, communities, etc) are aware of the breach, however they don't tell their customers. Others might not be aware of the breach, and Chinese hackers may frequently revisit the database due to it's ease of access.

I don't own an Authenticator, but I have multiple WoW accounts. The reason I've never been hacked in 7 years is because I use a unique email address for each WoW account, and I have never re-used the same email account for anything else online. I have over a dozen different email addresses that I use for different purposes, and about 40 other "online identities" that have no interconnectivity. Passwords are never the same either.

If you want to substantially increase the protection of your WoW account right now, register a new GMAIL address right away, create a unique password, and change your WoW email address/login ID to the new GMAIL account. Your WoW account password should also be changed to something unique. And, of course, make sure to scan your PC for key-loggers before starting all of this. 20 minutes of work now will save you days of potential aggravation in the future.

Since most players don't know this, Blizzard needs to force a change in their customer behavior in order to reduce account hacking. After all, it will benefit their customers as well as themselves (in a huge way.)

Here is Jared's solution that can prevent 90% of hacked accounts (from a developer perspective): FORCE PLAYERS TO CHANGE THEIR PASSWORD EVERY MONTH.

Alternatively, Blizzard could "educate" players at the login screen to change their password. Or make it very easy at the login screen to change their password, but gently remind players to change it every 60 days for example. If they were to force players to change all of their passwords right now, they would see a HUGE and immediate impact to the number of hacked accounts.

More people need to get this knowledge across to Blizzard. If there are enough people demanding the change, the more positive impact it will have for at-risk players (and only serves to help Blizzard.) Unless, of course, there's more revenue to be made from simply selling authenticators.