Blizzard Q3 2011 Results and 2012 Expectations

Posted by Daeity On Wednesday, November 9, 2011

Q3 2011 Conference

A copy of the transcript can be found here.

Mike Morhaime stated that WoW "finished the quarter with 10.3 million active subscribers worldwide", so that would be subscribers as of September 30, 2011 as opposed to right now. This also confirms that this older post now holds true: even after the Cataclysm launch in China during this quarter, the 4.2 content launch, and the simultaneous WoW Starter Edition launch, they still lost a considerable number of subscribers (11.4M to 11.1M to 10.3M). Remember too that these are "Active Subscribers" which represent a significantly larger of real players (vanity figures are common in the industry).

Mike Morhaime also said,

While the majority of these declines are coming from the East, World of Warcraft continues to be one of the most popular online games in China and remains by far the most popular subscription-based MMO in the world.

I guess, I can say this, the majority of the declines were in the East. China still represents more than half of our global player base and historically, December has been a very good month for subscriber trends.
Note that the majority of the decline was from China, but China also makes up the majority of subscribers. So, it makes sense that if subscribers dropped worldwide, that the majority on average was from China. :)

"Active Subscribers" in China are even more skewed in terms of real players, and if there are declines in China, it is much more representative of a larger player decline than in NA or EU. (China subscriber counts include IGR players and active prepaid cards.)

It's also of interesting note that this blog has claimed many times that Chinese WoW players make up 50% (or higher) of total WoW subscribership. It was based on research, speculation and predictive analysis of past announcements.. however it was met with great hostility and disbelief. There were many "here's your tin foil hat" comments in response to the claim that Chinese gamers made up 50% of subscribers. Finally, though, there's now something official on the subject from Blizzard. And consider this, if Chinese players make up more than 50% of total players, then you can use Chinese figures to determine real players as opposed to subscribers. NetEase, for example, has actually released real player figures.. which is something that has never done in NA or EU. :) This Blizzard comment has actually confirmed what TOD (and myself) have been writing about for a long time in regards to "Subscribers".

Q3 2011 - Live Stream Viewers

So, if you remember this post, I was expecting Mike Morhaime to talk about virtual ticket paid viewers (e.g. "make note of Mike Morhaime's special wording of Virtual Ticket Live Stream viewer counts.")

My prediction was based on all past trends:

1. Blizzcon 2009: Mike said "more than 50,000" live via Pay Per View.
2. Q3 2009 Report: Mike said "tens of thousands on Pay Per View."
3. Blizzcon 2010: Mike said "more than 100,000" paid DirecTV customers.
4. Q3 2010 Report: Mike said "95,000 paid viewers following along via DirecTV."
5. Blizzcon 2011: Mike said "more than 60,000" DirecTV viewers.
6. Q3 2011 Report: SUDDEN CHANGE!

I was really hoping this would happen. The one thing you'll learn about Mike is that he's very consistent and detail oriented. He now says, "more than 1 million online viewers." It looks like Mike might be a reader here after all. :)

Q3 2011 - RMAH and Q&A

I also mentioned last week about the whole PayPal/ integration. According to Mike, they'll be testing the real money systems very soon.
We've also been testing the gold auction house functionality through the Beta and are gearing up to test the real money systems very soon.
This will just be for beta members.. and it will probably be for the credit system only. Blizzard will give beta members a certain amount of credits, for example, to practice using in the in-game RMAH. For the PayPal aspect (e.g. real money), that part will probably be done by employees working in conjunction with PayPal. As for integration and instructions for all other gamers, that announcement should go out one or two months before retail/digital.

During the Q&A portion of the call, Mike sure was put on the spot. Almost all of the Q&A questions were Blizzard related, which was unusual. Apparently, there's some concern about how well MoP was received. On a related note, check out the Mists of Pandaria Preview Trailer, and compare Likes/Dislikes to WOTLK and Cata. I've never seen anything like that before.

2012 Expectations

This isn't related to the Q3 call, and it was something that I have already been preparing so I figured it would fit nicely into this post.

I was digging around through old job posts looking for anything Titan related. One thing I found interesting, though, is that all references to those old Fraud Specialist and Fraud Manager positions have been completely wiped off the face of the internet. :)

It's was written about back in this post, and TOD had also backed it up with some Google results (1 2 3 4). They're all completely gone now and it's pretty interesting. Apparently the jobs were publicly available for a week or two, and then after it was posted it, it was suddenly removed from all websites (e.g. Blizzard and recruiting agencies/outsourcers) all at once. They were pulled even a month before the deadline. :)

(By the way, if you ever find references to those positions in old archival websites, let me know.)

Anyways, Blizzard is hiring for Summer 2012 internships. A whole ton of them. I think they'll probably receive more serious instructions, though, on keeping confidential information off of their resumes moving forwards. Interns are a pretty good resource for new discoveries. :)

This intern position in particular interested me:
"The strategic initiatives team focuses on broad initiatives that address company-wide or development-specific opportunities and challenges. Our projects range from strategic planning to organizational and / or operations initiatives to purely quantitative analyses. Our roles are as varied as our projects. We may support, research, consult on, or drive projects. Some past and present efforts include: business analysis and visioning for the D3 Auction House; the development leadership councils; the side projects program; quantitative and qualitative analysis of cross-company survey data; franchise development; assistance with BlizzNet (Blizzard Entertainment's internal intranet); email Mike and ask the execs; Blizzard Entertainment academy; and other initiatives aimed at helping fulfill the top development, business and organizational goals of the company."
It's interesting in that one of their first duties will be "business analysis and visioning for the D3 Auction House." They'll be hired during a time when D3 will be well underway, but they're still interested in future vision and expansion of the D3 Auction House. Blizzard is looking for fresh perspectives, new D3 RMAH features or services, and probably ways to leverage the D3 RMAH and apply to Titan (assuming the new business venture is successful).

Overhyping Titan?

I have also come to the conclusion that I might be overthinking Titan too much, and setting my expectations too high.

Paul Sams once noted, "We're confident in Titan. It's an awesome one." and "We're playing it already. It's a total ball to play." He was describing a prototype of course, which would still be backed with concept art and a strong vision.. but his wording of the game makes it seem like there's more action involved than the typical "turn based" combat experienced in WoW.

It's also what Blizzard has NOT been saying about the game that convinces me that Titan is being overhyped. They're not saying, "it takes gaming into a whole new direction" or "it's innovative, it's different and awesome". Every description of the game is the same as how they once described World of Warcraft.

Cameron Dayton's description of the game even portrayed a fixed history, philosophy, heroes, villains, and a main story line. This isn't a customizable or immense world shaping game, it's a standard MMORPG with combat (heroes/villains), new characters, and a new story to tell.

I don't think Titan will be taking gaming into any new direction. The "Next Gen" term is just referring to the graphics engine and really nothing else (except for maybe in-game revenue generators). There's also Titan transmedia at work.. since there are new colorful characters in this game, there will be novels, comic books, t-shirts, toys, mousepads, posters, etc.

And also interestingly, the development team has been focusing more on player and NPC design than "monsters" or "creatures".

I'm expecting that it will be a standard MMORPG/FPS like WOW, but targeting additional demographics. I'm inclined to support Daeity's earlier posts; modern setting, low scifi, low fantasy, a multiverse of environments, a large world full of users and NPCs (one server per region, everything can live in different countries, times, or locations in-game), and the storyline could be anywhere from modern wartorn countries, to parallel dimensions, to time travel, or maybe just a messed up Doctor Who story with multiple times existing at once.

In a massive world, with a large number of players and their own market place, it makes for a great opportunity to exploit D3's RMAH. D3 will make the decision, though, whether it will be implemented in Titan or not.

Future Predictions

And, for those watching trademark registrations,
  • In 2012, about 3-4 months before Blizzcon you will see a registration for a strange name. It won't be Titan, but rather the D3 expansion pack. (Of course the name might be obvious, like "Heaven's Sin" or something.)
  • During Blizzcon 2012, they'll announce the D3 expansion pack, there will be demos, a video, and 1 new class. New PVP features, and a new profession probably developed by the S.I.T. to further exploit RMAH usage and growth.
  • Diablo 3 will also have new friend invite systems and "Scrolls of Resurrection", but they'll probably not be announced during Blizzcon.
  • In 2013, D3 X1 will be released and WOW X5 will be announced (once again, trademarked shortly before Blizzcon.)
  • In 2014, X5 released and assuming no more delays, the real Titan game name will be registered and demonstrated at Blizzcon. This is when everyone rushes to get domain names.
  • The Titan trailer will be a mind blowing graphical festival of the eyes with a deep commanding voice narrating. Pants will be crapped, fans will spontaneously combust, and burly men will swoon. But it will just be another MMO with really cool graphics.
  • After WoW X5, I think the development and delivery trend is going to change. They'll be very few and far between, and Blizzard will probably push their Digital Download platform, make the expansion packs smaller, and pretty much just turn them into DLC packs (instead of full blown expansion experiences).
  • And, SC2: HOTS/LOTV fit somewhere up there too, but I think they're going to be delayed.
Blizzard reads all of this of course, and I'm the only site doing it. :)

* UPDATE: With Blizzcon 2012 being cancelled, I'll still keep the same timeline just without Blizzcon.