One transaction at a time
But if Blizzard does go free-to-play, you say, it won’t make nearly as much money as it does from all of those subscriptions.
Not so fast.
The MMO market is filled with success stories of companies who have done exactly what Blizzard seems to be positioning to do within the next few years.
Perhaps the most well-known story is that of Electronic Arts Inc. (NASDAQ:EA)‘ Star Wars: The Old Republic, a game that was once seen as WoW’s biggest potential rival.
The game released in late 2011 to critical acclaim and saw 1 million new players sign up in its first three days, using a monthly subscription model similar to World of Warcraft. But, as players gobbled up the game’s max level content faster than the developers could release more, players became bored and the subscriptions suffered a steep and continuous drop.
Electronic Arts Inc. (NASDAQ:EA) announced the game would be moving to a free-to-play model that would make money through an optional subscription and micro-transactions. Most gamers and industry analysts were ready to add the game to the large pile of other MMO failures.
But then, the empire struck back.
The Old Republic saw an immediate surge that more than doubled its monthly revenue thanks to the switch. Electronic Arts Inc. (NASDAQ:EA) found that plenty of players who had unsubscribed re-installed the game once the cost of admission was eliminated.
Yes, it’s true that neither The Old Republic or Everquest ever had the amount of revenue from subscribers boasted by World of Warcraft, which had 12 million subs in 2010, so perhaps it’s been easier for those games to post a big comeback.
But stop to think about just how many people have ever played World of Warcraft over the last nine years. Twelve million was the high subscription point, but players have constantly unsubscribed and been replaced with new blood over the years. Blizzard has never released the total number of unique users to ever log in to the game, but it’s safe to say that number is far north of 12 million.
Check the comments on any WoW fan site or the game’s Facebook page and you’ll quickly see that there’s a large community of players who may not subscribe any longer, but still actively follow happenings in the game. The eventual introduction of a free-to-play business model could re-invigorate the WoW subscriber base and send plenty of former players back home to Azeroth. Given the success of past games like The Old Republic making the switch, it’s not unreasonable to conclude that WoW could experience the same level of success, but on a much larger scale.
For now, Blizzard seems to be content to see where its subscription model goes from here. But if World of Warcraft one day starts bringing in plenty of revenue for Activision Blizzard using a free-to-play model, don’t be surprised. The truth is that Blizzard has been planning for such a day all along.
The article Why the World of Warcraft Doomsayers Are Wrong originally appeared on Fool.com and is written by Jason Gallagher.
Jason Gallagher has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard. Jason is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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