World of Warcraft, a dying product in need of an infusion

People have been trying to claim that “World of Warcraft (WoW) is dead” for a long time. Unfortunately, it seems that it may be turning into a self-fulfilling prophesy. Let’s take an in depth look at the subscriber levels and try to figure out what the real issue is. [See the page from Statista here.]

A graph showing subscribers over time.

Chart from Statista.com

After a steady rise, and large subscriber upticks with announcements of previous expansions, the World of Warcraft player base has been in rapid decline. The World of Warcraft game has been in trouble since the Cataclysm expansion. Unlike all the announcements of Burning Crusade and Wrath of the Lich King, the announcement of the Cataclysm game did not generate excitement and new subscribers.

Further, the release of the game did not increase subscriber numbers – note that they were the same Q3 2010 and Q4 of 2010. They should have increased because a new expansion was released in Dec (Q4 2010) – that was Cataclysm.

After the release, they start the downhill decline, losing 1/4 of their subscribers (3 million) in only a year and a half. 9.1 million subscribers in Q2 of 2012 was the lowest point since Q2 of 2007. [Ignorning the corporate based Chinese debacle of 2009 which isn’t even reflected in the data because they did not release numbers during that time.]

An ominous dejavu sign was seen when, in October of 2011 the next expansion, Mists of Panderia, was announced and the subscriber count was completely flat instead of the expected excitement uptick. In fact, they lost more than 1 million players in the quarters after the announcement leading up to the release.

In the quarter where the Mists of Panderia release took place, there was a subscriber uptick of 900,000 which brought the numbers to just below pre-announcement levels. From which point it only continued to drop, all the way to 7.6 million in Q3 of 2013 – a low the company had not seen on the normal interest curve since 2006.

In the fourth quarter of 2013, the Warlords of Draenor expansion was announced. Unlike the last two flops, the announcement cause a small 200,000 subscriber uptick.
The overall numbers continued to plummet to 6.8 million before a pre-release uptick to 7.4 million (where it is today, and the game is officially live tomorrow).

Let’s draw a fairly common-sense conclusion here from the data. If the subscriber count doesn’t increase on an expansion announcement… it’s just not what the players are looking for and they are only going to continue to leave.

It leaves open for interpretation, however, what such a small uptick as the one which came on the Warlords of Draenor expansion means for Blizzard. Even including an uptick of subscribers leading up to the release, the numbers today are still lower than they were before it was announced.

Of course, there are other things likely to be contributing factors. For example, when the numbers dropped for Cataclysm it could have had something to do with the fact that (for the first time in memory) the game required hardware upgrades to play. They are again raising the computer requirements iwth the Warlords expansion but how that plays out remains to be seen.

Similarly it is probably quite relevant that other games have been getting made by Blizzard and drawing its attention. Diablo III was downright outrageous. It was a stunning release, fabulous story, and some WoW people were left wondering if all great story-tellers had jumped ship to go write for Diablo. Not just great story, but a game which (for the first time) was going to be available on gaming consoles. StarCraft has also been getting significant development and had two expansions release since Wrath of the Lich King.

Let’s not ignore the current behemoth, Hearthstone – the virtualization of the physical card game owned by Blizzard was released for computers as well as (for the first time) Android and iOS capable devices. In September of 2014, Hearthstone had ammassed an incredible 20+ million players. In just over 6 months. [http://www.gamespot.com/articles/hearthstone-passes-20-million-players-what-do-you-/1100-6422336/]

We must not forget the elephant in the room, announced at Blizzcon 2014, the groundbreaking First Person Shooter (FPS) style wargame called Overwatch. A totally new direction for Blizzard, this will be their first foray into the FPS universe, and many of the people who tried out the demo games at Blizzcon were surprised at how good it is.

Diversification seems to be the name of the game for Blizzard right now, and getting into consoles and mobile is helping to save their revenue stream. However, all of that good news does little for increasing subscribership or player counts for the World of Warcraft product.

I have my suspicions that, at this point, they have lost control of the World of Warcraft game as a paid subscription product. The good thing is that the World of Warcraft movie is going to be a reality in 2016, and I would suggest that if the numbers continue to decline by then… they should strongly consider making a free-to-play (F2P) option (not just the restricted started account) and market that version alongside the movie.

The movie will reach people who don’t know about the game as a game, and lowering barrier of entry to free will allow Blizzard to capitalize on those new people more easily. F2P has been road tested and is a strong way to generate revenue, in many cases it makes even more money than subscriptions did (recently; see Star Wars the Old Republic). I definitely think there is a large F2P market waiting for WoW in the scenario that its subscribership drops too low, and it very well may be what refreshes the game for all its customers.

As a long time fan, I certainly hope that game stays around for many, many more years.

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