.. is going to blow your mind. Does this clickbait title work?

So, you want to hear something really messed up? I'm willing to bet that no one knows this (except Blizzard).

During the Blizzcon 2010 opening ceremonies, Michael Morhaime said that there were "more than 100,000 virtual attendees" watching across over 100 countries live via DIRECTV. (This was also when Blizzard DOTA was first announced, and he said it would be free to "all Battle.net players in the coming months.")

Next, during the Q3 2010 Earnings Call following Blizzcon 2010, Michael Morhaime said "More than 25,000 people attended the show with another 95,000 paid viewers following along via DIRECTV or the live Internet stream." (27,000 attendees were later reported.)

But wait.. don't you remember all of those RAYV problems? Oh right.. Blizzard also partnered with RAYV to provide live streaming through the Blizzard site.

In 2009 and 2010, Blizzcon was available live via Blizzard (RAYV) and DIRECTV as a Pay Per View event.

To clarify, there were TWO streams available for purchase: DIRECTV and BLIZZARD DIRECT

During the opening ceremonies, all of the official announcements, and shareholders meetings, Michael Morhaime only revealed the DIRECTV numbers. He was very careful about his wording, and he did not share their internal "Blizzard Direct" figures. How interesting.

However, RAYV sure did share this information in one of their official case studies.

Blizzcon 2010 served over 550,000 unique viewers watching over 100,000,000 minutes of online streaming in a single weekend, The [sic] premium package subscription cost $40 and included HD streaming of the entire event plus a special “pet code” [sic]

This was no typo. 550,000 paid viewers are mentioned multiple times in various RAYV releases. (Update: Even though they "served" customers and mention the premium package in the same statement, it's possible that there could be a percentage of free stream viewers in that 550k figure.)

So, there were 95,000 to 100,000 paid DIRECTV customers and over 550,000 paid BLIZZARD customers. HOLY CRAP.

Blizzard only revealed the 95,000 number though. It was a preplanned, calculated, and strategically worded delivery of speech. :)

It makes so much sense too.. with more than 25,000 (to 27,000) attendees and tickets selling out in minutes, why would virtual attendees only be 3x that number? 650,000+ viewers makes much more sense, but Blizzard does NOT want you to know this information.

It's exactly like what Michael Morhaime said, "margins are higher when we sell direct." SIGNIFICANTLY HIGHER when sold direct, in fact. (I mentioned that citation yesterday too.)

In their partnership with DIRECTV, they are probably taking a larger cut away from Blizzard. But, by using RAYV technology (back in 2009 and 2010) using their own website and resources, they made a TON more revenue from virtual ticket sales.

But 2011 is even more interesting.

During the Blizzcon 2011 Opening Ceremonies, Michael Morhaime gave a "shout out" specifically to the DIRECTV members only. He said there were "more than 60,000 from 130 countries who bought a virtual ticket." So sneaky. :)

He didn't mention the number of virtual attendees who watched through the direct Blizzard live feed though. And last year, it was over 5 times the number of DIRECTV customers.

SO, IS YOUR MIND BLOWN NOW? (Hopefully not just by the number of actual viewers, but also the other revelation.)

If there were 100,000 DIRECTV customers last year, but only 60,000 this year, it's very likely that even more customers are using the Blizzard live stream this year. (By the way, there were "over 26,000" attendees announced at Blizzcon 2011 vs "over 25,000" at Blizzcon 2010.)

How much do you want to bet that the Blizzard live stream numbers will NOT be shared at this upcoming shareholders meeting? They'll only announce the outsourced DIRECTV figures, and very carefully word it. :)

Blizzard is okay with sharing numbers on behalf of partners or citing research publications (who don't have access to their internal digital numbers), but they're highly secretive when it comes to internal figures and revenues.

* UPDATE (10/26/2011)

RAYV has just updated their blog with statistics from the Blizzcon 2011 live stream.

For the third year in a row, RayV partnered with Blizzard and Direct TV to broadcast Blizzcon to virtual ticket holders. The virtual ticket increases in popularity every year. Virtual ticket holders can tune in on their computers and watch all performances, panels, and matches live. The virtual ticket also guarantees VOD access for up to two weeks after the event is over.

For the first time, RayV also streamed regional Blizzard Tournaments. RayV streamed the GomTV tournament, based in Korea, and the SiTV tournament, based in China. Both streams added to the global reach of the Blizzard and RayV community.

The Blizzcon stream attracted countless online viewers. Over the weekend, RayV delivered over 2.26 Million hours of streamed content. There were over 740,000 viewers worldwide and at some points there were approximately 200,000 concurrent viewers.

So, Michael Morhaime announced that there were "more than 60,000" DIRECTV users who purchased the 2011 virtual ticket. But, there were another 740,000 viewers who used the Blizzard live stream instead of DIRECTV (this figure might also include those who watched the Opening Ceremony and SC2/WOW matches).

Those viewer counts are crazy, no wonder Blizzard doesn't like to share them. The "revealed" DIRECTV paid customers is just a fraction of the "unrevealed" paid customers who go through Blizzard directly. A good example of why digital sales are never revealed either.. if they're not there yet, retail sales will eventually just be a fraction of digital sales.

* -------------------

It's all about wording too, like what this blog has discussed so many.. many times. Remember when they said Blizzcon was a financial loss for the company.. but it was spoken in past tense? Or when Tom Chilton claimed that Mists of Pandaria was just a crazy rumor and speculation?

If you guys were interested in tallying up sales, Blizzcon tickets cost $175 (they were $100 for several years, then $125 in 2009, and then $150 in 2010). Virtual tickets cost $40 this year and last. (In 2010, they made approximately $30 million in revenue with $3-4 million in expenses.)

Because they're delivering streaming services themselves this year, their profit is probably even higher.

Activision Blizzard Objectives

All of these deceptive choice of words and "special features" are showing very clear objectives for the company and just how important it is to keep it secret. When Michael Morhaime said that he's a crazy CEO who gets to make crazy decisions, and "what if we just made Diablo 3 available for free to World of Warcraft subscribers".. that wasn't just a crazy "idea". It was with purpose and it was all part of a strategic plan for the company.

Their objective is to push digital sales of games, expansion packs and DLC as much as possible. Digital sales (and providing sales and services themselves) is more important to them than even Paid Services. DIGITAL SALES IS HUGE FOR THEM. And they're realizing it even more every day since a few years ago.

And, I don't think Blizzard wants their competitors to know just how much money they're making from digital sales. Profit margins are massive if you can cut out the middlemen. They're doing it with games, services, music, and even video streams now.

If other competitors aren't already doing this, they will be hurting badly and simply cannot compete with Activision Blizzard. There are just so many businesses out there that haven't realized the importance of digital delivery and just providing these services in house. They should be outsourcing labor, but OWNING the digital delivery systems and finding clever ways to get their customers to buy from their digital stores. This is how Activision Blizzard is destroying the competition.. if competitors can't keep up, they'll be just like Blockbuster still trying to rent out VHS tapes.

Future Plans

With their heavy emphasis on digital delivery, you can bet that both Activision and Blizzard will be finding new ways (and special promotions like "$10 off if you buy online" or "get it free by buying this") to push digital sales. One method is degrading the quality of retail boxes and promoting environmentalism or "green incentives" to move into digital.

Having an easy delivery system and purchase platform is key. The RMAH "B.NET BUCKS" system is a brilliant method to push even more digital sales.

And you can bet that Titan will be HUGE into the digital delivery system. Special coupons or incentives to buy Titan online, purchase DLC digitally, purchase expansion packs online, seamless client upgrade systems, etc.

To continue pushing the digital delivery method (to eventually replace most of their retail sales), Titan will also be incorporating a heavy payment system internal to Battle.net (e.g. more "B.NET BUCKS") If users can make money using Titan, they'll use their Battle.net credits to purchase more games or Titan expansion packs. Titan expansion packs will probably be smaller and delivered more quickly too, since they weren't able to do it in time for WOW but they can still do it for Titan. And with their digital sales objective, it makes much more sense.

More people (and in particular video game competition) need to be aware of where real game sales profit lies.

Right on the front page.

Teaser trailer will be posted there on November 2, 2011.

Apparently, all those resume searches and voice acting job finds really did indicate GTA 5 even though everyone (including Rockstar) was saying otherwise. :)

Good timing for the "Gaming Leaks; a How To" posts too. Now you know how people found out about GTA 5 earlier this year.

The WOW Annual Pass was quite an interesting new announcement at Blizzcon.. it's actually quite brilliant and I have to commend the marketing team.

Here is more information on the Annual Pass which I will be referencing.

From what I understand, this was a last minute change. It was probably an idea developed (or just implemented from an earlier idea) within the past 3 months or so after they decided not to make the surprise Christmas announcement.

It's being marketed just like a mobile contract. If you sign up with us, you get this fancy new phone for free.. and you only have to pay month to month! Cancel anytime you want! (Many view this contract scheme as a scam, but it's pleasantly ignored when it comes to a video game.)

Just like mobile contracts, users on jumping on board without considering the consequences. And, it's a common human trait not to fully understand long term consequences (which is being exploited by clever marketers) after all.

Here are some things to consider:

• You CANNOT cancel the monthly payments, so you better make sure you don't run out of funds and save up in advance (in case of monetary emergencies.)
• In order to be eligible, you need to pay for a recurring subscription already. Meaning that it will cost you an additional month (13 months) to get the offer: "Prior to accepting the offer you must have a recurring World of Warcraft subscription active on the associated account."
• You are stuck with the 12+1 month subscription, and it's deducted on a month to month basis.
• You are buying the standard digital copy only. You do not get a retail box.
• If you fail to make a payment: you lose the items, your account is disabled, you are charged the full amount for Diablo 3, and Blizzard is within their right to sue you: "If your World of Warcraft subscription lapses during the Twelve Month Commitment, or if you fail to make any required payments or timely payments, Blizzard reserves the right to terminate your participation in this offer in addition to any and all other remedies that may be available to Blizzard at law."
• Because of the guaranteed beta access, other WOW players are penalized access for this. It further encourages them to participate in the offer.
• You're locked into playing WOW even when D3 comes out next year. It's a limited time offer too, so you need to act fast!
• You are stuck with an entire year's subscription during a time when new games will be coming out: Skyrim, Guild Wars 2, Tera Online, SWTOR, Torchlight 2, Path of Exile, The Secret World, etc.
• When you're stuck with a subscription, you feel obligated to play the game to avoid a wasted expenditure.
• It's a great way to keep Blizzard players away from new MMOs and more importantly, their competitors.
• It gets Diablo 3 players to play WOW, and gets WOW users playing Diablo 3.
• Having so many players locked into a 1 year contract increases their subscriber counts (vanity figures for impressing shareholders) even if the accounts aren't being played. It's "Subscriber" counts, not actual players.
• Michael Morhaime stated that "their margins are higher when we sell direct." It's in Blizzards best interest to get you to use their digital downloads.. they are saving a ton of money by you not buying retail (they also lose a major cut from the retail sale too.)
• This is also why the new D3 RMAH and PayPal relationship is so important.. by building up B.NET bucks, their profit margins are going to skyrocket compared to retail loss. This is the future of all of their games. Keep your money within Blizzard, buy digital. Degrading the quality of retail boxes is a great way to encourage digital purchases too. (Remember the quality of materials that retail boxes used to carry?)

A very clever move, just like the Pokemon style combat pets.

(Blizzard will be selling even more pets in the Blizzard Pet Store now, with special pets having new abilities. Since it's not "game impacting" and only for "vanity pets", then it's perfectly acceptable to start selling weapons and armor.. but just on pets. (I don't literally mean real weapons and armor.. I'm talking special skills and pet stats.) It's also opening up WOW to a younger crowd, whereas Diablo 3 is targetting a more older/serious crowd. They'll have a couple games now to hold over the various demographic groups until Titan comes out for a more larger demographic.)

I wouldn't recommend the WOW Annual Pass for anyone.. unless either you're rich or you live in Australia. $100 for Diablo 3 is a pain in the ass, I'm so sorry for you guys. This deal is much more beneficial to you guys than everywhere else.

For everyone else though, please consider the repercussions.

The big problem I have is that you're FORCED to start paying for the WOW Subscription right away, during the time when Diablo 3 and other MMOs come out. It would be much more fair to players if you could buy the WOW Annual Pass now, but start using it at any time you want. But, their plan is to get users paying monthly fees for a year, knowing fully well that they'll never actually be playing WOW. Brilliant marketing strategy.