Mike Morhaime on Diablo III and WoW

Games Industry got 15 minutes with DiabloWikiMike Morhaime at Blizzcon 2011 and peppered him with questions about freeplay MMORPGs, the future of WoW, business in China re: the Panda-xpack, the Starcraft arcade on Battle.net, and more. There were a couple of questions about Diablo III as well, which I thought worth quoting. Check out the whole interview here:

Q: As you sort of hinted in your opening address, one future competitor to World of Warcraft is Diablo 3, and you’re worried that people are going to have to choose between them. So you made the offer of including it with a World of Warcraft annual subscription – which is a generous offer, but is it also a move to protect World of Warcraft subscriptions from Diablo?
Mike Morhaime: Well of course, I would be lying if I said that it wasn’t. But I think from our perspective, we don’t need people to buy everything. You know, if somebody is subscribing to World of Warcraft, we’re totally happy, and I can sleep very well at night that they’re playing Diablo 3 and World of Warcraft and that was just included as part of their subscription. I think it’s a great deal.

Q: Moving on to Battle.net, you recently announced the real-money auction house for Diablo 3 and you’re talking about the Arcade for StarCraft 2. Do you see features like those as a necessary part of your game designs and your business model from now on?
Mike Morhaime: Yes, I do. We are really trying to integrate… Well, those are very different things, even though there’s some technology we can share between the two. But when you look at Diablo 3, it’s really all about what does this game need to achieve its potential? And a big part of Diablo 3 is item trading, finding valuable items and being able to trade them for items that are valuable to you… We’ll see how it goes, it’s definitely a new thing for us, I think a new thing that nobody’s ever really done in this way before. But we’re very excited about and we’ve received very positive feedback, by and large, from the players.

The Arcade really grew out of the idea that we have this awesome map and mod making community… The same tools that we use to create the campaign in the game, we put in the hands of our community, and they do some amazing stuff with these things. But imagine the kind of work they would do if there was a marketplace where they actually had the opportunity to sell their creation to other players. Imagine how that might incentivise them to do better things with that engine and devote additional resources…

We look at things like the iTunes App Store, and how that has just become so fundamental to changing the way we interact with this device, something that Apple could never have achieved on their own. And, you know, our vision is that we’d like to see that type of effort with StarCraft.

The answer about the “free D3 with 12 months of WoW” is a good one. Obviously it makes financial sense for Blizzard, $180 for a year of WoW is a lot more profit than a canceled WoW sub and a $60 purchase of D3. (Assuming those people weren’t going to buy D3 on top of their WoW subscription.) And they’ll hope to keep people playing WoW longer term than that, and they hope to get WoW players to become D3 fans who will buy the expansions at full price, etc.

It seems a pretty clever plan all around. I wonder who came up with it? And what sort of debates and arguments went on internally before it was agreed upon? Given their reflextive secrecy about all business matters, I doubt we’ll ever hear details on that, but it would be a fascinating tale to tell.

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17 thoughts on “Mike Morhaime on Diablo III and WoW

  1. Clever responses indeed, even sounded honest. I thought the WoW idea was brilliant, would be interested to see how many people signed up for this (I did, being someone who hasn’t played WoW since first few months of Cataclysm).

    Thought I heard in an interview with a Blizzard employee that the annual pass was being discussed around blizzards offices for a bit, trying to decide on the rewards for signing up. But you know not to quote me when I begin a sentence with “Thought I heard” 😉

    • I wonder if they can count those free D3s to WoW 12m subs as D3 sales? That will make a considerable difference in the initial D3 sales figures, if they do 500,000 or so to their 5m or so WoW subs in the US/EU.

      • @Monty I bought the Annual Pass and I agree with your viewpoint.  Others keep thinking this is a all-or-nothing time commitment for WoW OR D3.  Most people on this site haven’t played WoW in years or have never played and they speak from ignorance.  They couldn’t be more wrong BECAUSE IT HAS NEVER BEEN EASIER TO BE A CASUAL WoW PLAYER.  They have dungeon finder, raid group finder, battleground queuing, 310% to speed mounts, portals, mobile AH, etc… Many of the things that took tons of time in the past are now instantaneous.  I hop in WoW for 20 minutes DAILY.
        So what is my plan?  To play D3 like crazy (several hours a DAY) and then hop into WoW (an hour or so a WEEK) to keep up with “daily” quests, new dungeons, seasonal events, etc.  People falsely assume that the majority of WoW players have scheduled raids… the other false assumption is that every D3 player is racing to Inferno.  Some people actually like to play every game casually so THEY ACTUALLY ENJOY IT! (go figure)!
        @flux I’m not sure how they will count the free D3s – I would assume they will count them as “units sold” in the Q1 2012 10-Q financial report.  They could also count WoW’s 12-month revenue commitment in the Q4 2011 or Q1 2012 10-Q as revenue based on accrual accounting and they are open to profit-spread at their digression.  All this goes to say that the bookkeepers can still make the WoW-D3 combo look impressive on the SEC filings and in board meetings.

        • casual Diablo players? I´ve heard about them but thought them nought but legend. By Diablo´s hairy balls (before he lost them, that is) THEY RE COMING

        • But you need wait a YEAR before you will be able play your free Diablo 3 when other will be play it for few to severals moths faster depend release date.

          • No.

            People who buy the WoW annual pass get Diablo 3 AT LAUNCH.

            This is specifically stated on Blizzard’s promo page for the WoW annual pass.

            *Please* stop repeating this misunderstanding … that is continually corrected whenever it appears and so has no excuse for perpetuation.

  2. iv played wow on and off, usually when expansions and vanilla came out for about 3 months usually. so all in all i have probably played for about 12 months, that being said if they offered a diablo 3 beta key with that deal i would have signed up.

  3. “We look at things like the iTunes App Store, and how that has just become so fundamental to changing the way we interact with this device . . .”
    Yes it has changed how we interact! We DON’T interact without shelling out more $$$. Bastards!

    • The majority of titles in the iTunes App Store are free.

      My device is loaded with tonnes of great games (about a third were free) utilities (all were free) and oddball apps (most were free).

      You can do just about everything you want on iOS and Android using only free apps, even when you’re avoiding the ‘freemium’ traps. You just have to do a bit of searching instead of believing the (in this case wholly erroneous) hype.

    • Why?  What possible dislike is there here?  Are they not allowed to make money?  He’s basically saying the $15/mo is enough – no need to charge even more for D3 if you’re already paying the WoW sub.  He has 11MM WoW subs, some huge % of them were going to buy D3 anyway, and he’s saying no need to pay us more than you already are.  Frankly, the constant “Blizzard is bad b/c they make money” crap is annoying.  Go bang a drum in Zuccotti park.
      One of the things that stood out for me in the quotes above is no mention of Bobby K, which helps undermine the silly “Bobby Kotick is pulling the strings” theory.  Fact is, Blizzard operates autonomously and always has.

  4. I have nothing wrong with the business side of the deal. It’s a great idea. I just worry for people’s social life/sanity/mental health when they have both WoW and Diablo 3. None of my business what people do with their time, but still…!!!

    • My guess is that a lot of the people that have WoW and Diablo 3 will play through Diablo 3 a handful of times and devote more of their gaming time to WoW instead of trying to max out their Diablo 3 characters…

  5. I wonder how Bobby felt about not forcing people to buy Diablo 3 if they are WoW players…

    By they way, that site makes you register to read the full article… not cool…

    • Meh… wouldn’t let me edit… I would suggest signing up to the site just to read the full article… Mike gives a pretty interesting reply to the question about SW:TOR also having the sub model and free to play games being successful and also the one about Valve tradmarking the DOTA name and how that effects them and the mod-making community…

  6. They actually did this same thing with SC2 in South Korea, it was free so long as you had an active WoW subscription (without the 12 month contract though,) but the payment structures and culture is a lot different over there.  Most people pay a monthly subscription for SC2 so instead of having them compete with one another and to try install a much larger user base they just made it free.

  7. Nothing to tell, Flux – Mike runs Bliz, Bobby runs atvi.  Everyone else remaining is a yes-man.   That’s a big part of why 2/3 of the bliz board of directors circa 1999 left long ago.  They have minds of their own.

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