We reported on the Activision/Blizzard quarterly conference call, but focused our coverage on the Diablo III stuff, since duh, we’re a Diablo fansite. The financial media and general gaming media, on the other hand, cast their attention elsewhere; mainly on the cataclysmic drop in WoW subscriptions. During the conference call it was revealed that 800,000 more subscribers were lost in the third quarter of 2011, following the 300k loss in the second quarter — that’s 1.1m, 10% of the total, gone in six months.
News pieces that played up that angle can be seen here and here, and investors reacted negatively to the WoW subscriber loss as well, with ATVI dropping from over $14/share to the current value of $12.71. Incidentally, for those of our readers choose to take every sarcastic, “WoW is a silly game” reference as a personal attack, here’s what actual criticism looks like:
Pandaria‘s reaction among the western BlizzCon crowd was underwhelming. Compared to the major in-game changes that came with Cataclysm, Pandaria is just a new area to go quest in and that’s about it. It’s a fair prediction that the Kung Fu Panda look-alike expansion will flop in East and West alike, accelerating this subscriber downfall even further.
Despite these steep WoW losses, Activision/Blizzard’s revenues were up in the quarter, despite a lack of any new products. Even with fewer WoW players, the company is making more money per subscriber, largely thanks to DLC: Wow SparklePonies and virtual pets, CoD map packs, etc. That’s the take of this editorial on RipTen, which projects a long and profitable future for WoW, even as the title is almost certain to continue a gradual erosion of subscribers.
The announcement of the big drop in WoW subs explained a lot about the free copy of D3 with a 12m WoW subscription. Consider the timing of events. Blizzard knew their subscriber numbers were hemorrhaging since WoW:Cat, and they knew the the Panda pack was still nearly a year away. How to slow the bleeding in the interim? How about they give everyone who agrees to keep playing WoW a free copy of D3. Twelve months of WoW is a lot more profit than one sale of D3, and those people will play D3 for six months while still paying for WoW. Then when they start to get sick of D3 they’ve all got tickets into the Panda beta, which will hook them into that expansion just about the time their 12m subscription time runs out.
In related news, the latest Call of Duty sequel just set the all time sales record for a video game, moving over 6.5m copies in the first 24 hours after release.
Bobby Kotick, CEO at Activision Blizzard, said, “We believe the launch of Call of Duty: Modern Warfare 3 is the biggest entertainment launch of all time in any medium.” Estimates are that Modern Warfare 3 will sell between 11-19 million copies by the end of the fiscal year. Modern Warfare 3 is the biggest day-one release for the Call of Duty series, following Black Ops with day-one sales of $360 million, and Modern Warfare 2 with $310 million.
(Incidentally, book 7 of the Harry Potter series sold over 11m copies in its first 24 hours, which is a lot more than 6.5m. Of course MW3 costs a lot more than a book, so I guess Bobby’s right on the money. Which is, after all, his area of expertise.)
Despite these WoW problems and the recent dip in the stock price, most analysts remain bullish (that means they think the price will increase) on the future value of ATVI. Obviously they’re making a fortune on MW3 sales, their digital earnings (from WoW pets, CoD map packs, etc) are increasing, and 2012 is going to be a huge year, with D3, SC2:HotS, and WoW:MoP (worst acronyms ever), plus the next CoD expansion. You might worry about 2013 though, given the profits from CoD running into Bobby’s habit of killing golden geese by lashing the developers into sacrificing quality for yearly expansions. As always when viewing Activision news, give thanks that Blizzard still (mostly) retains control over their own game and feature development.