As you can tell by the those subscription and financials, things have been looking very bad over the past several months. Not only do these officially confirm the accuracy of previous estimates, but also the manipulation involved in the Subscriber™ definition. =]
As explained many times in the past, there's a significant difference between subscriptions and Blizzard Subscriptions™. Investors and the public get to see their public financials, but it's not like they're legally required to reveal actual subscriber numbers (or names) to anyone. They use a special definition for public announcements, but that's about it - and that number can be manipulated in any which way they want. I also have an interesting news reveal shortly where the Blizzard marketing team will soon be able to manipulate this number even further to their advantage. =]
Based on the subscription numbers, you can see that they've lost a little over 10% of their subscribers and they still haven't been able to fix their attrition issues while churn is in some serious trouble (i.e. the rate of losing players has been higher than gaining players for almost a year now.)
In regards to the sudden drop in players (and associated revenue), I'm not sure how they can keep this information hidden any longer. I don't know how they can continue justifying their public financials considering the massive losses in micro-transactions and pet/store sales. Even with such a sudden drop (ie, 700-800k Subscriptions™), I don't think an official or documented announcement will ever be made. The Q1 (Jan/Feb/Mar) 2011 financials call is coming up in a couple months and I'm really looking forwards to it, especially after the massive release of all of this information. =]
You should see some interesting and more desperate actions soon in order to increase their revenue. One of them is new pet/store sales, but I'll be putting that up in another post right after this one before my 2 major updates.
One of their acts of desperation, which I think I've talked about in the past, is turning World of Warcraft into a F2P system like what everyone else is doing. That's right! Blizzard is planning changing their treasured game into a F2P structure.. well, sort of. Basically, the free 14-day trial period is being changed to unlimited play up to level 20. The announcement is planned "at the end of Q2 2011", so you should hear about it very soon.
This information was actually pretty easy to find, a ton of employees knew about it already so I didn't have to go through my usual channels. I don't know any more details over than the F2P modification, however, because they need to keep gold farmers and spammers on a leash, I'm sure you'll see a lot of restrictions in place similar to the trial method. For example, chat, AH restrictions, and probably a limit on gold and/or a bank limit so that they can't be used as mules. I'm also not surprised by the timing of the announcement either, it's right at the cusp of a new quarter in which they want to drive their revenue and artificially increase subscription numbers. =]
You see, this new approach reeks of both desperation and brilliance. Subscription attrition has reached a terrible state, and they're going to continue plummeting for years to come. However, because of this new method and the influx of "free players", it will artificially increase their Subscription™ count astronomically. Will they be changing their special Subscriber™ definition, or will it remain the same? If you ever see a "12 million" or "13 million subscriber" announcement in the future, just remember that 3-4 million of those "subs" might be in fact F2P players. =] And those numbers don't even come close to real players as you're well aware..
From what I can tell, this is just the first step in a new long-term plan and they have a lot of other stuff scheduled for the future (e.g. lowering the cost of WoW, reduced expansion pack price points, and eventual subscription fees). I didn't like the "Cataclysm experiment", but I do like this experiment.. I'm surprised they didn't do it sooner.
Okay, now that I'm past all of the boring stuff, it's time to move onto the more important and mind-blowing updates! Should be up momentarily so please hold tight.. I'm sifting through a ton of information and emails here and trying to sort things out to find the important bits.