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Posts with tag economy

The 9 revenues drop by 94% after losing WoW

Former World of Warcraft distributor in China The9 recently reported on their third quarter revenues which showed a massive 94% drop Year Over Year. Their revenues were posted at $3.7 million, a significant drop from their second quarter revenue which was pegged at $42.2 million (while they still held the license). Last year, The9 reported revenues of $59.8 million.

Although The 9 downplays the loss, pointing to notable growth in their other licenses, such as FIFA Online 2 and Granado Espada, the impact of losing the publishing rights to Blizzard's phenomenal MMOG was more than apparent. World of Warcraft has a tumultuous history in China, with The9 losing the rights to rival Netease back in June, with rumors swirling about the change as early as April of this year.

World of Warcraft is currently in the middle of a power struggle between two Chinese government agencies, resulting in the suspension of the game. Players in mainland China have reportedly not had access to the game in months and there were numerous delays to the Wrath of the Lich King expansion, putting the future of World of Warcraft in the country, as well as its potential millions of dollars in profits, in question.

[via Massively]

Filed under: Blizzard, News items, Economy

Rent seeking (or lack thereof) in WoW

Elnia continues posting some interesting (and complicated) insight into the World of Warcraft over at the Pink Pigtail Inn. This time, it's about what she calls "rent seeking," which isn't about trying to find the money to pay for your apartment so much as it's about individuals petitioning authorities (the government, or in this case Blizzard) for their own income. The post dabbles with some complicated market theory, but in the end, the conclusion is this: while players have definitely petitioned Blizzard for changes to their own class, they have generally stayed away from asking for more money, or changes to the rules that would grant it to them. In general, players are fine with Blizzard staying hands-off of the various in-game economies running in Azeroth.

As the commenters over there say, there's a good reason for that, and it's because most of the economic play in WoW is completely optional. Aside from repair costs (which can be high for raiders, but for everyone else are fairly inconsequential), you don't really need money at all; given enough time, you can collect whatever you need from somewhere in the world, either by simply collecting ore or herbs, or by running instances and doing quests. But that doesn't mean that the "rent seeking" comparison isn't valid.

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Filed under: Analysis / Opinion, Odds and ends, Blizzard, Economy, Making money

Blizzard pet store now regional

In a short (but not necessarily sweet) announcement, Zarhym announced on the official forums that the recently opened Blizzard pet store are now regional. This means that pets purchased from, say, the European store can only be redeemed on European World of Warcraft accounts. He doesn't go into detail other than to say that pets that have already been purchased from one region and redeemed in another region are not affected by this change.

While it's a curious move on the surface, it effectively restricts players from Europe purchasing their Pandaren Monk and Lil' K.T. from the US store where the pets are cheaper at $10 compared to €10 or £10 in the EU (roughly $15). Interestingly enough, the pets are priced at ₩12,000 in the Korean version of the store, which is about the same price as in the US ($10.3). It's unclear why the European version of the pets -- along with a few other Blizzard store items -- are more expensive, a fact that makes Turpster huff and puff and blow Azerothian houses down.

Obvious business reasons aside, it also creates a minor inconvenience for people who would like to give the pets as gifts to players in other regions. However, considering that many vanity pet codes have been regional in the past, such as those given away during Blizzard special events, it's not a surprising move. Then again, this whole foray into microtransactions was a bit of a surprise, so we've learned to never underestimate those folks from Irvine.

Filed under: Analysis / Opinion, Odds and ends, Blizzard, Europe

Researching virtual economies to learn about real ones


Researchers are apparently using economies in virtual worlds like Everquest, EVE Online, and of course our own World of Warcraft to determine how real-world economies work, according to this article by Reuters. Scientists have, of course, used WoW to model real-world behavior before, but that was specifically for something biological, and thus there were quite a few differences between the virtual model and the real application. In economies, however, it's all just money and numbers, so researchers can easily see real patterns and movements in the data.

Unfortunately, the article doesn't go too deeply into their results (and it only talks about their findings from Everquest), but there is one nugget of conclusion: the economists saw inflation spike in one server over 50% in just five months. They say that the population rose on the server, which apparently made some items hard to find, thus raising prices. Economists say they've seen that same thing in the real world before: in developing nations, and in war zones. We can probably see similar effects right around a patch, or even just on weekends. As more people run to the AH to buy certain items, inscriptions or enchants, the price on those is going to rise. Interesting stuff -- it would be cool to hear what other similarities these guys have found between the virtual world and the real.

Filed under: Patches, Items, Analysis / Opinion, Odds and ends, Blizzard, Making money

Is China's WoW delay politically motivated?


I don't presume to know much about trade policy or international relations, so I'll just pass you this link to a story over on VentureBeat and let you decide for yourself. You probably have already heard that Blizzard has had plenty of trouble trying to bring World of Warcraft back online in China -- they've been waiting on approval from the Chinese government's General Administration of Press and Publication, which has already mandated a few changes to the game. Dean Takahashi at VB suggests that rather than being a technical issue, the delay may actually be political and/or economically motivated: the US and China have been bumping gently lately over exports and imports, and Takahashi suggests that Blizzard's game may have gotten caught in the middle. The GAPP, he says, may be holding the game back, concerned that such a popular foreign game might be released again on their soil.

Fortunately, even Takahashi says it's unsubstantiated -- WoW is likely to go back online in China in a matter of days, and the delays could just as easily have been administrative errors. But I do agree with Takahashi that it's worth watching -- China is cautious about allowing foreign manufacturers to sell to their citizens, and video games are no exception.

Filed under: Analysis / Opinion, Blizzard, News items, Economy, Wrath of the Lich King

Online gaming up in the US

Our economy may still be pretty much in the gutter, but one industry is still going strong. If you glanced at what site you were reading this on and guessed "online gaming," congrats! You win a gold star. Here you go: .

Anyway, according to this industry report featured on GameSpot, online gaming overall (including MMOs, in turn including WoW) was up 22% year-over-year in May 2009. 87.1 million people were estimated to game online in the USA, an impressive 28% of our estimated total population.

Of course, a huge chunk of this is browser-based games (think Bejeweled or Yahoo! Games). WoW is apparently the 21st most popular "online locale," clocking in at 2.2 million US visitors. Still, I'd say 21st isn't bad for a game with a subscription fee; 2.2 million players at $15 a month is $33 million a month (assuming the each have exactly one account). The next-closest MMO, according to this report, is RuneScape, at 202,000 players. Really? Aren't there other MMOs with more than that?

Anyway, online gaming, like online everything else, is on the rise. Single-player, localized games are starting to feel positively quaint, although I still think Chrono Trigger is the best computer RPG of all time.

Filed under: Ranking, News items

Activision conference call: WoW still at 11.5 million subscribers

The OC Register has a great breakdown of what Activision said on their earnings conference call today. Perhaps the biggest WoW-related stat to come out of the call is that the number of subscribers to the game has apparently leveled off: they're holding steady at 11.5 million. Which is nothing to cough at, but it's what we were told four months ago, and if, as Ghostcrawler claimed, the numbers are still going up, then they're going up very, very slowly. Morhaime says that numbers are growing everywhere, but that China will be a main focus of growth this year as Wrath of the Lich King releases there soon.

In non-WoW Blizzard news, the Starcraft 2 beta will start this summer and will be the "final" phase of development for that game. The new Battle.net interface will be tested then as well, so keep an eye out for that. And Blizzard expects big things there in China also -- NetEase, the company that will now be handling Wrath's launch, is already set up to run both Diablo III and Starcraft 2 out there, so it'll all be under one umbrella.

In short, there's no really bad news from Blizzard, but no really great news either -- the best news to come out of the call is that even in the slow economy lately, Blizzard is holding steady. Not a bad thing at all, but we probably won't see any spikes in player interest in Blizzard or WoW until they announce what's next on the content plate, whether that be at BlizzCon or before.

Filed under: Analysis / Opinion, Blizzard, News items, Expansions

ATVI is a "conviction buy"

Well, The9 is going down in flames, but if you're looking to make some money in the stock market lately, you could do like BRK and buy some stock in Activision-Blizzard. Goldman Sachs has upgraded ATVI to "buy," and even marked them out as a "conviction buy" -- while the stock price is almost $11 right now (it jumped up about .75 on this news this morning), GS says it's headed to $14 eventually. "Conviction buy" just means that the wily traders at Goldman Sachs expect the stock to outperform in the future -- Activision is already saying it will do well, but GS thinks it'll do even better.

Medievaldragon over at WorldofWar.net points out that there may still be trouble ahead: while Blizzard has gone with Netease for their service in China, they still have to make it past the Chinese government's approval process, and there may actually be service outages if things aren't approved quickly. But that won't affect Activision's business very much, and given that the company still has a bright future (even in a harsh economy), picking up a few shares is probably a relatively good investment.

Please note: I am not a financial expert, and none of this should be taken as serious financial advice. You invest in the stock market and any other financial institution at your own risk. If you're getting stock tips from WoW Insider, it's probably better to keep your money in your pocket. AH tips, on the other hand...

Filed under: Odds and ends, Blizzard, Economy

FileFront suspending operations indefinitely

Our old friend Moo Money wrote in a little earlier today (along with a few readers) to alert us of some news that has the potential to hit the WoW community pretty hard: FileFront is closing its doors, citing poor economic conditions as the reason why they're indefinitely suspending the site's operations. As of March 30th, 2009, FileFront will be gone.

Countless WoW videos are currently hosted on FileFront, including some of our favorite machinima, many that we've highlighted on the site previously. It's not just machinima, either. I know many of my friends that arena heavily find and host their videos on FileFront, and my raid has linked to strategy videos that were hosted there, too.

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Filed under: Analysis / Opinion, Machinima, Economy

Study: MMOs bringing in $1.4 billion a year

If America's bankers want to get back into Moneytown, apparently they could do a lot worse than designing a hit MMO -- a study by a group named Screen Digest says that the MMO market is hotter than ever. After dropping down to a total of $701 million in 2008, games like World of Warcraft are seeing their revenues rise again, up to a total of $1.4 billion. And not surprisingly, WoW is still leading the charge -- while their overall market share is dropping very slightly, from 60% of the market down to around 58%, they're still making more money than ever. And while other games are picking up some numbers, according to Screen Digest, they're not really stealing players from Azeroth -- they're actually pulling new MMO players in.

Which is understandable -- during times of economic downturn, online games like MMOs are actually positioned to do very well. Why spend $15 on one night at the movies when you can spend it on a whole month of entertainment? World of Warcraft may have brought the MMO monster to the surface, but according to numbers like these, this is a game genre that's going to be extremely popular (and profitable) for a long time to come.

Filed under: Analysis / Opinion, Virtual selves, Odds and ends, Blizzard, Economy, Making money

The state of the Azerothian economy

Thermalnoise over on the WoW LJ thought of a great poll, and the results are interesting. He asked readers there what the average amount of gold they had on their characters was, and I thought the amounts were relatively high: between 2,000 and 10,000g for about 40% of those polled. The other big chunk is between 200 and 2,000g (a little under 30% of respondents), which is where I'd expect most of the player base to be, but no: apparently Blizzard's bigger rewards in Wrath of the Lich King (not to mention the higher gold sinks, requiring us to try and raise more gold if we want to fly around or ride a mammoth) have made us richer as a whole.

Thermalnoise also asked how much your savings of gold fluctuates, and for most people it apparently stays pretty much the same, or generally increases (probably as they run professions, do quests, or sell off drops and pay repairs). I'd imagine Blizzard is keeping a pretty close eye on just how our gold moves around, and that "steadily increase" is what they'd want all of our money to do, just to keep the game's economy moving around.

In fact, though I'm probably repeating myself here, it'd be nice to have them give us some insight on just what's happening with the ingame economy. We've gotten a few hints at what sells and doesn't on the realms, but it would be interesting to see some official numbers about the average amount of money that players have and keep at the various levels of the game. and exactly where it all goes when we spend it.

Filed under: Analysis / Opinion, Virtual selves, Odds and ends, Blizzard, Economy, Leveling, Making money, Wrath of the Lich King

Will the economic downturn hurt WoW?

GamePolitcs had an interesting news brief about Michael Pachter, a financial analyst with Wedbush-Morgan, who contends that MMOs will not be impacted in the current economic downturn because the majority of people who play them are "addicts."

The full interview with Pachter is available from Reuters.

Besides the negative stereotypes and sweeping generalizations that come with statements like "people who play [MMOs] are addicts," Pachter does make a good point. He notes that "Losing their jobs makes them more likely to play because they have more time to play."

I thought about this for a minute. If I were to lose my job here at WoW Insider, I would no doubt start looking for new employment almost immediately. I would scale back my expenses – probably get rid of cable TV (Hulu is my TV now anyways), I'd eat out less, I'd use the library more and Barnes & Noble less, and I would generally be more frugal with my spending.

But I don't think I would cancel my WoW subscription.

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Filed under: Analysis / Opinion, Economy

The gold standard: A WoW economics course proposal

If you're like me, you're ... well, you're probably incredibly handsome and charming. But you're also probably interested in WoW's economy, given that it's the biggest and most involved metagame in WoW and a fascinating microcosm of a free-market economy.

I personally think that the how and why of WoW's economy is worth a deep look, and it appears there are a lot of people who agree with me--even some academics. It might even be worth just as much as any other book-learnin'.

At least, that's the basis of David Friedman's World of Warcraft economics course proposal. Friedman is an academic economist from San Jose, CA who's assembled this article as a think-tank for what a WoW economics course would entail if you had to fill it with a semester's worth of content. There's a lot of neat stuff in here, talking about relative prices of ore based on character level and rarity of ore and supply/demand, but he also asks for your input as to possible course material, which I'm sure you could gladly provide in the comments section of his page.

Good idea with sound academic basis, or another in the long list of high falootin' academia's attempts to justify playing WoW on the government's dime? WE REPORT. YOU DECIDE.

Filed under: Analysis / Opinion, Fan stuff, Economy, Making money

Mining mechanics changed, one hit per node


The updated 3.0.8 patch notes released today have an interesting, yet significant, change to mining.

Miners will now only hit the node once to get all the ore and associated loot.

This change might seem mundane but it actually carries some significant weight. Farmers regularly fly or run around zones, stopping at every node they see. Under the current system most nodes required between two and four hits to extract all the ore, sometimes even more for the rich nodes. An ore farmer would spend a portion of his time ensuring the mobs were cleared around the node enough so that he would be able to hit it multiple times, and then actually spend the minute sitting on the node farming it.

With the one hit method that is now being implemented in 3.0.8, the process becomes significantly easier. Point, click, wait a second, fly off to the other destination, profit. There's no "???" in there, just a pure and easy way to make money.

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Filed under: Mining, Patches, Analysis / Opinion, News items, Making money

Northrend's Gross Domestic Product: 719 million gold

Our friend The WoW Economist started a little project the other day: he added up, according to the top items lists, all of the products sold from Northrend across the servers, and then multiplied each by what he calls a "median" price (though exactly how that's reached, we're not sure), and landed on a huge amount of gold: 719,918,239.7. Obviously I'm not a WoW Economist (I'm not even that good at math), but that sounds to me like Northrend's gross domestic product: players are creating an economy of 719 million gold in Northrend from week to week.

Unfortunately, that number alone doesn't tell us much, except that there's a lot of gold moving around in Northrend (it would be interesting to compare this to, say, Azeroth or Outland's equivalent, though the more useful numbers would probably be Outland before the new expansion hit, when everyone was still farming and selling items from there). And it will be interesting to see this tracked in the future: the real GDP is usually used as an indicator of both standard of living and a country's economic health, and while there are drawbacks to using that number to gauge both of those qualities, it's probably fair to say the economy in Northrend is booming. Maybe tracking this in the future will let us see how new content patches or item or even class updates can affect what the economy does there.

Very interesting. EVE Online's creators, CCP, have actually hired an economist to help run their ingame economy, and while WoW's isn't generally seen as quite that complicated, there are still plenty of big numbers to play around with..

Filed under: Items, Analysis / Opinion, Odds and ends, Blizzard, Economy, Making money, Wrath of the Lich King

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