Activision-Blizzard makes lots of money, no update on Blizzard earnings
by Mike Schramm 
Nov 6th 2009 at 5:30PM
Blizzard, in particular, laid claim to three of the top five selling PC games in North America on the good side, and on the bad side, Activision acknowledges in the press release that they're happy to have WoW back online in China, but a little worried about the troubles it's seen over there lately.
Strangely enough, there is no information in the earnings about how much money World of Warcraft has pulled in for the company, or any updates about subscriber numbers. Usually, that gets at least a mention, so maybe, with subscribers certainly down in China, Activision-Blizzard wants to keep that under their hat for now.
If Blizzard's profit within the company is down (especially during the all-important holiday season, and especially since they had a huge release planned for this coming quarter that got pushed off to next year), maybe that would explain the recent push for a little extra profit. Not to blame the Activision overlords at all (as we said the other day, Blizzard's core team has never been against this move), but it makes sense that when the parent company needs big financial figures and the division within the company is underperforming, you'd start to pull out the big profit guns for the holiday season.
Of course we can't know what they're really up to (and obviously none of this is professional financial advice), but if Blizzard wants to up profits for the next quarter, this seems like the time and way to do it.
Filed under: Items, Blizzard, News items, Making money
Reader Comments (Page 1 of 2)
Docp Nov 6th 2009 5:44PM
Just goes to show what pursuing profits at the expense of anything else can do for a business. Couple quotes from Bobby Kotick the head of Activision to give you a general idea of the direction they're heading.
“In the last cycle of videogames you spent $50 on a game, played it and took it back to the shop for credit. Today, we’ll (charge) $100 for a guitar. You might add a microphone or drums; you might buy two or three expansions packs, different types of music. Over the life of your ownership you’ll probably buy around 25 additional song packs in digital downloads. So, what used to be a $50 sale is a $500 sale today.”
"The goal that I had in bringing a lot of the packaged goods folks into Activision about 10 years ago was to take all the fun out of making video games."
Talking about the MW2 price hike "And Tony, you know if it was left to me, I would raise the prices even further."
Snark Nov 6th 2009 5:50PM
They R A COMpanY They are meant 2 make MONEEYS!
Mr. Tastix Nov 6th 2009 9:13PM
Kotick makes me sick. Just because they're a company doesn't mean money has to be their first priority. I never thought it was Blizzard's, I also didn't think it was BioWare's. But I did think it was Activision and EA's goal (EA seems to have loosened their grip on the ropes though). I didn't think this was the case with Valve but meh, L4D2 changed me in that regard.
Just because a company needs money to survive doesn't mean it shouldn't screw over it's customers. Even worse is that Blizzard DOESN'T HAVE TO. They don't NEED more money. They already have over 10 million subscribers (that we know of). At least HALF of those pay the $15 US a month necessary to play the game.
5 million customers paying $15 US each every month is a gross income of $75,000,000. If 10 million players paid that we'd double that number and get $150,000,000. This is not every 4 months, or even every year. THIS IS EVERY MONTH. Every 31 DAYS.
Times 75 million by 12 and what do we get? $900,000,000. Times 150 million by 12 and we get $1,800,000,000. In either case, they'll get a gross income of nearly ONE BILLION DOLLARS. This is WITHOUT adding faction and race changes, realm transfers, name changes or character customization costs to the equation.
I highly doubt it costs Blizzard 1 billion dollars to run World of Warcraft. I could understand it being quite high to pay all their employees, and all the bills to pay to even have the game running but their profit margin will still be HUGE.
And THEY WANT MORE? No, they never ruled out the idea of micro-transactions but they're no longer ruling out much ideas these days due to adding stuff in now that they said they'd never add in years ago. But I don't blame Blizzard, because this is not the Blizzard I knew. Who made great games like Diablo, StarCraft and WarCraft.
This is a company led by money-driven company, led by a money-driven bastard of a man. A man who doesn't care for your satisfaction, only his own. He cares not for anything about you, except your wallet.
And yet, we still pay his forsaken company to play his half-assed games. Because, let's face it, WoW is awesome. But I still don't see any reason to pay for all these ridiculous things. I'm sure Kotick's motto is something about doing less work but getting more money for it.
Dreadskull Nov 6th 2009 10:10PM
Eh, just don't buy any games that aren't fun.
The problem with his logic is that if he tries to suck the fun out of video games and grab as much money as he can out of players, then Activision will ultimately fail. Having fun games = more players.
I'm hoping that EA will eventually knock Activision Blizzard off of its high horse, because EA still seems to care about making fun games. Especially when they have developers like Valve and Bioware on their side.
MazokuRanma Nov 6th 2009 10:50PM
If Activision truly had as much pull as you guys think, Starcraft II would have been out months ago, broken as all hell.
The fact that it's been delayed by two full quarters should give an indication that there are still areas of Blizzard devoted to bringing the games out when they meet their own standards of quality. I've never been disappointed by a Blizzard game, and I am eagerly waiting for Starcraft II.
True, maybe they will fail, but I see no reason to doubt a company that hasn't done so to date. I'm looking forward to SC2, D3, and Cataclysm, and I don't really care about whatever Activision does on the side. If they do let me down in the future, then I will call foul, but for now I'm putting some faith in a company that hasn't failed yet.
Side note: Why the hell do people care about these stupid micro transaction vanity pets. They're useless and confer no in game advantages. I don't have any, I don't want any, but I don't care if other people do. They're pets. If it was gear or money this would make sense, but they're pointless little pets.
It doesn't matter anyway though; judging by the number of these things I've already seen around my own server, they're selling quite well, despite all the people ranting in the posts here.
Mr. Tastix Nov 6th 2009 10:52PM
Activision, Eidos and EA. I never used to think much of any of them. All 3 of them, at least to me, were just out for my money.
We know this is true where Activision is concerned. Kotick makes no attempt to hide it and, whilst I can respect his forthright attitude in that regard, I will NEVER respect the way he deals with his company and his clients.
Eidos seem pretty quiet but they've made some mistakes too. The one thing I dislike about them is they wouldn't sell the rights for Deus Ex to Warren Spector (one of the creators of the original game) and for me, being a hardcore fan of Deus Ex was sad to hear this because now Eidos Montreal are probably going to rape my favourite game of all time even further with this third game.
EA used to be my number one Big Bad. Simply because they raped good games like Command and Conquer and the Need For Speed series. Hell, they're still doing so to those two aforementioned series but I could actually play the latest C&C games. C&C: Generals, for example, WAS HORRIBLE (hated it). NFS is OK but they ALWAYS screw it up near the end and this is not the developers fault but rather, EA's - the publishers - fault.
EA have been known to give extremely tight deadlines. Need For Speed had tight deadlines, for example, which is why the game is all good and dandy until the very end. At the end it's incredibly hard and feels very rushed and some of the developers realised this and said they hate it, but they couldn't do anything else in the allocated time interval given to them.
Patience is a virtue. I would much rather wait another 3 years for a game to come out and be of decent quality than for it to come out ASAP and it be absolutely horrible. Whilst you might lose a bit more money because of the longer development times you will gain more long-term because more people will be happier with your game, more people will recommend your game to other people, more people will buy your next games thinking they'll get the same decent quality.
EA seem to have loosened up a bit. But I don't buy many EA games (I won't buy anymore Battlefield games because they're just pointless now, I can't stand WW2 games anymore because it's the same boring crap over and over again), with the exception of BioWare's games.
Docp Nov 6th 2009 11:27PM
@Mazoku
"If Activision truly had as much pull as you guys think, Starcraft II would have been out months ago, broken as all hell.
The fact that it's been delayed by two full quarters should give an indication that there are still areas of Blizzard devoted to bringing the games out when they meet their own standards of quality. I've never been disappointed by a Blizzard game, and I am eagerly waiting for Starcraft II."
Yet the fact that they've decided to split the game into three full price retail versions instead of one sequal isn't ringing any alarm bells? I can't help but think that in the past Blizzard would have released this content as one full game and two expansion packs or something similar.
I don't have a problem with people making a profit at the expense of loyalty, quality and passion for their craft, I just wish they'd do it with something almost no one cares about. For example Bobby Kotick is welcome to go bring his practice to pencil manufactor, I couldn't care less about the quality of my pencil so he's welcome to screw around in that market all he wants.
Mr. Tastix Nov 7th 2009 5:09AM
"I don't have a problem with people making a profit at the expense of loyalty, quality and passion for their craft, I just wish they'd do it with something almost no one cares about."
What craft? Kotick has talent for making money, I'll give him that, but he has no tact. At all. He doesn't care for the consumer, he would rather his developers have as LITTLE FUN AS POSSIBLE. I'm pretty sure the quote above proves it.
"The goal that I had in bringing a lot of the packaged goods folks into Activision about 10 years ago was to take all the fun out of making video games."
Delin Nov 7th 2009 1:41PM
The saddest thing about all this is, is that Activision was once a bastion of quality and creativity. They were the first third-party publisher for consoles. They were the first company to give the developers credit for their games. And then Kotick took over. The company was in trouble, IIRC correctly they lost a huge lawsuit. He managed to keep them afloat, and looking at his tactics, you can tell why. But he is not a person you want in charge of a successful company. He sees us as walking ATM machines and the products as just a means to our cash.
tom99k Nov 6th 2009 5:53PM
Bobby Kotick is the reason for bad things :(
thegiant89 Nov 6th 2009 5:55PM
They're getting a little money hungry as of late paid faction changes, paid race changes, paid vanity pets. $14.99 a month from ~11 Million people and another expansion coming within the next year or two apparently isn't enough.
notthepenguins Nov 6th 2009 6:14PM
The 14.99 we all pay (or less, if you sign up for more than a month at a time), is to make it profitable for Blizzard to keep up their servers for everyone else to play on - to make it more profitable then having the same team make a new game to generate revenue, in fact (and if it wasn't profitable, they couldn't keep it going). You want more than is given in the basic game, like a race change, faction change, or new pet? You pay for it. No one is making you get these things, so if you don't want it, don't get it. For those of you that aren't getting it: why are you complaining?It doesn't affect your gameplay. If you are getting one of these extra services, you need to give them something to make it worth putting in the development time and server time to put these changes in place. Doesn't seem too unreasonable to me.
Reps Nov 6th 2009 8:17PM
The thing that upsets me about these paid services is the fact that I DO want the services, but don't want to shell out so much cash for the service. There are other games which offer similar services for a much lower price, or for no price at all.
SaintStryfe Nov 7th 2009 1:23AM
How long does it take to level an alt 1-80? 40 hours?
A faction transfer change cost 30$. unless your time is worth less then 75 cents per hour, I think you do well to do that if all you want is a character on the opposite faction.
marco Nov 6th 2009 5:59PM
Blizzard is selling crack. Now they're sweetening it up and charging us more for it. So, we crackheads are shelling more money out to the dealer.
Hoggersbud Nov 6th 2009 6:09PM
Here's the thing...your game subscription is static. It doesn't cost you or me any more a month if we don't want these things. Which are completely optional and for many people, totally undesirable.
So I have no problem with their being a charge for faction and race changes, or for mini-pets.
Because I can say no, and go on my merry way.
Now if they start charging for access to raid content, or item upgrades, perhaps you might have a point, but not with what's occurring as of now. Even the Arena contests are a different matter, as that's a special event I can completely ignore if I want to do so, which as a matter of fact, I do.
Works for me.
Should things be done another way?
Noraa Nov 6th 2009 6:13PM
Cataclysm will be underwhelming. Blizzard artists are under an incredible amount of pressure from the CEO boys, now. It's make money or GTFO. I'm very surprised they're willing to wait until next Fall to release it, rather than this Spring.
The truly sad thing is they see WoW as a sinking vessel and are putting less and less (Read: Strickland and the A team are now on a new project) into WoW, despite the fact it makes so much money. The only thing I can summize is that the cost of updating the game across the board graphically is not worth it, and it's very sad.
Josef Bugman Nov 6th 2009 6:47PM
What is your evidence for this?
Plus I like the game how it is now "graphically" if I wanted a game that will more than likely crash, or that you can't play on a laptop, I would go for Aion, or something like it.
Also, Blizzard knows how to make money, its clearly going to keep making money of WoW and its derivatives for some time to come, so why not enjoy it?
Also, though I do think that the head of Activision is a grade A Douchebag with the same amount of wit, charisma and people skills as that of a head louse he is not going to be interfering in this game all too much, its too big for one man to make it fail.
Docp Nov 6th 2009 8:06PM
@Josef
"Also, though I do think that the head of Activision is a grade A Douchebag with the same amount of wit, charisma and people skills as that of a head louse he is not going to be interfering in this game all too much, its too big for one man to make it fail."
Underestimating Kotick is a dangerous way to go.
Dreadskull Nov 6th 2009 10:20PM
WoW isn't truly sinking imo.
It's just turning into the Wii of MMORPGs - dumping the hardcore/highly devoted players off of the boat so that they can get potentially more players by appealing to a wider, more casual audience.
I don't think it'll ever truly be dead, and tbh I don't want it to die. I'm totally fine with it being the most populated MMORPG and whatnot.
Why? Because that means there'll be less morons/immature idiots on the MMORPG(s) that I play instead of WoW :)