World of Warcraft drops 100K subs, Actibliz buys Candy Crush dev for $5.9B

    
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Strange things are afoot at Blizzard Activision.

Even while the studio is preparing for BlizzCon and the trailer reveal for the Warcraft movie, it announced that World of Warcraft has dropped another 100,000 subscriptions during this past quarter to end at 5.5 million. The studio said that this puts the game’s population in a “relatively stable” state. WoW lost almost 3 million subs between Q4 2014 and Q1 2015 and another million and a half by the Q2 2015 report.

For those counting along at home, that brings the total to 4.5 million subs lost in 2015, meaning the subscriber base has dropped by 45% in nine months.

Blizzard says this is “the last quarter that [it] plan[s] to provide subscriber numbers” because “there are other metrics” — so-called “engagement” metrics — “that are better indicators of the overall Blizzard business performance.”

Those 5.5 million players have a new baby brother in the Blizzard family, as the studio acquired Candy Crush developer King Digital Entertainment (with its 1,600 employees) for $5.9 billion in equity value. Yes, billion. Activision Blizzard CEO Bobby Kotick said of the acquisition, “Mobile gaming is the largest and fastest-growing opportunity for interactive entertainment and we will have one of the world’s most successful mobile game companies and its talented teams providing great content to new customers, in new geographies throughout the world.”

The studio said that Hearthstone continues to do incredibly well, setting a new quarterly record and improving 77% year-over-year. Diablo III isn’t doing too shabbily, either, having passed two million units sold in China since its debut in that country.

Finally, Blizzard revealed that seven million fans signed up for the Overwatch beta — which doesn’t include China.

Source: Business Wire, BBC, via Blizzard Watch. Thanks to Gibbins, Savage87, and Balsbigbrother for the tips!

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Cyroselle
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Cyroselle

They pay per character don’t they? That would certainly inflate numbers a smidge.

Cyroselle
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Cyroselle

ESO is Buy to Play. WoW could go B2P though, if they packaged all the expansions into a single client to make the investment a little less onerous.

DrowNoble
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DrowNoble

NobleNerd Yes, because WoW itself is generation less and less revenue.  The whole picture is that they are a vast company with a portfolio of many games.  If Game A is making a lot of money, they can funnel that money into Game B that needs the revenue.
However, WoW is their largest game and has a consistent revenue (subscriptions).  Diablo 3, as an example, won’t be making them much money going forward unless they decided to do another expansion.  Sure they’ll got some sales here and there, but not very much overall.   So if I was an investor, I’d want to know how ALL their assets are performing.
All the more reason for WoW to fully convert to a F2P game.  That business model has been consistent in showing a greater profitability than sub-only.   If you disagree, go look at ESO or Wildstar.

NobleNerd
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NobleNerd

Blizzard does not rely on subscription numbers to maintain a profit for WoW anymore. There are even WoW Tokens now you can purchase in game for subscription time. If you see the whole picture it makes sense they report on their total earnings from all sources.

DrowNoble
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DrowNoble

wjowski They need to do something to try and stabilize WoW subscriptions.  It’s a steady source of income they can count on, but with their flakiness and lack of content output, players are going away. 

D3 is pretty much done, I don’t think they’ll get significant income from that.  Legacy of the Void will get them a nice surge for Q4 2015, but then that will drop off.

DrowNoble
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DrowNoble

Quote:
Blizzard says this is “the last quarter that [it] plan[s] to provide
subscriber numbers” because “there are other metrics” —
so-called “engagement” metrics — “that are better indicators of the
overall Blizzard business performance.”
Meaning, they know their sub numbers are still declining, so they’re going to fudge numbers to make it seem like they’re not.  They could say something like “between Q2 2015 and Q3 2015 we have 98% retention rate on subscribers”.  Which is correct and sounds better than “we lost 100k subscribers in same quarter”.   If stockholders want to know subscriber numbers though, I think they legally still have to provide them.  Not sure on that as I’m not a corporate lawyer.  :)

dorn2
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dorn2

Kodimus dorn2 SallyBowls1 wjowski Sorenthaz

Cyclical means that it goes up and down.  Except in this case the next peak isn’t going to even match former dips. For Cyclical to be healthy the peaks can’t keep getting smaller and smaller.

Critical mass issues have nothing to do with the in game situation.  People play Warcraft because other people play Warcraft.  They literally only play because their friends play.

wjowski
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wjowski

SoMuchMass wjowski 
 Mobile companies rise and fall with the seasons.  There’s no proof that King will be able to maintain that kind of profitability in the next few years and a lot of data suggesting that they won’t.

SoMuchMass
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SoMuchMass

wjowski Are you accounting for King’s revenue?  They made 600 million in revenue in Q1’15 alone.

wjowski
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wjowski

For reference Acti-Blizz will need to remain as financially successful as it is now for the next twelve years to pay this off.