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..