Innovation

How Blizzard can save the business of World of Warcraft

The classic the subscription game recently shed half its customers. Here's how WoW's publisher can super-serve the fervent fan base and balloon the population of gaming's most vital virtual world.

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Image: Blizzard Entertainment

World of Warcrafting is dying.

Next week, game publisher Blizzard Entertainment will release Legion, the sixth content expansion for World of Warcraft, the world's largest and most famous virtual world. World of Warcraft expansions are released every two years and generally cost about $50. Additionally, to access the game players are required to pay a $15-per-month subscription fee.

In exchange for the subscription fee, like many services consumers expect regular updates to the game in the form of additional playable content. Each expansion typically receives between four and seven updates. The game's previous expansion, Warlords of Draenor, delivered two anemic content updates. The product was a dud, and consumers reacted. Through the expansion's lifecycle the number of monthly paying subscribers deflated so rapidly that in 2015 the game's developer stopped publishing the number. This matters because WoW subscribers were the company's primary key performance indicator and used as a marketing tool for years.

SEE: Interview questions: Virtual reality designer (Tech Pro Research report)

Due to the large, complex scope of the product, massively multiplayer online games (MMOs) like WoW require a large capital investment and several years to develop. In turn, MMOs ask a lot from the consumer. Development costs for high-overhead games like WoW, Everquest, Ultima Online, and other early MMOs were passed on to gamers in the form of subscription fees.

Though the fee limited the market, the ROI for successful MMO products was tremendous. Consumers received a constantly updated entertainment product in which they could reliably invest both time and money. For ten years, WoW inarguably generated millions in revenue and helped Blizzard develop the product line and become a larger publisher.

WATCH: The Story of Overwatch (GameSpot video)

It's not all Blizzard's fault. Times change. So do markets. Blizzard pioneered, then was slow to adapt to the e-sports trend. As multi-player online battle arenas (MOBAs) exploded in popularity and profitability, World of Warcraft and MMOs declined in popularity.

Launched in 2004, the game-as-a-service model worked for the majority of World of Warcraft's life, and arguably still does. Nearly six million people continue to pay to play World of Warcraft, and the number will likely rise with the release of Legion. If recent trends continue, however, the subscriber number will likely dip again a few months after Legion's release.

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Image: Activision / Blizzard

Yep World of Warcraft players remain deeply committed to the product, and the publisher. Here's what the company can do to save the World of Warcraft.

  1. Kill the monthly subscription fee. Much like the newspaper industry, where the monthly subscription fee was once a profit center, it's now a barrier that prevents the product from reaching the largest possible market. Create a soft paywall. Make the product available to everyone who has purchased the game at any point. The current model is to sell updated expansions every two years. Continue this practice. Sell the new expansion, and 'give' the base product away to all previous WoW customers.
  2. Market to WoW's biggest fans. In 2014 Blizzard claimed over 100 million players played World of Warcraft over the past decade. Though the lofty number is propped up by duplicate or abandoned accounts, doubtless millions of paying customers have played the game since 2004. This is a massive market of prospective customers. At its peak in 2010, World of Warcraft claimed just over 12 million monthly subscribers. Today, fewer than 6 million subscribers remain. Converting a fraction of 100 million former players would repopulate the world with customers already comfortable spending money on the product.
  3. Sell high-quality in-game purchases. Treat World of Warcraft like a platform. The game could be the App Store of gaming. Blizzard should adopt and improve on the free or buy-to-play model used by PC games like Guild Wars 2 and Blizzard's own Heroes of the Storm and Hearthstone. Continue to charge for the base game, expansions, cosmetic items, mounts, and level upgrades. In the Battle.net shop, Blizzard sells dozens of World of Warcraft-related virtual items. Offer a subscription fee for hardcore players. Give these premium customers access to subscriber-only servers, legacy server content, in-game level-boosts, and cosmetic items.
  4. Remaster and market classic content in modules. With each biennial expansion patch, Blizzard designs map and quest regions for players to explore and team-focused player-versus-environment instanced challenges. Considerable time and money is invested in the development of raid and dungeon content, yet the content is deprecated every two years in favor of fresh content. WoW's first two expansions, the vanilla base game, the Burning Crusade, and Wrath of the Lich King, are game-industry classics. The content exists inside the modern game but not in a meaningful way. Sell modular components of the early content, like raids and dungeons. There is a market for this content. In the current game, old content is generally cast aside and forgotten. Instead, Blizzard should treat its legacy content like early Beatles records: genre defining classics.
  5. Foster and grow the intellectual property. From World of Warcraft to Starcraft to Diablo, Blizzard's legacy is tied to games products grounded in character and story. The company must continue to push World of Warcraft out of gaming, into mainstream pop culture. The Warcraft movie was not a great film, but it was a step in the right direction. Transmedia storytelling is at the center of their marketing push for Overwatch, another Blizzard-owned property. If the strategy is successful, Blizzard could become the Disney of gaming.
  6. Develop, then openly communicate a legacy plan for the game. Though the market for subscription-based massively multiplayer online games shifted, the World of Warcraft product remains strong. WoW consumers are loyal and have an emotional connection with the content. Don't make consumers guess about the future of the product.
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Image: MMO Champion

Though World of Warcraft declined, Blizzard caught up to the e-sports market. In the past three years, the company released three successful new products, including collectable card game (CCG) Hearthstone, MOBA Heroes of the Storm, and first-person shooter Overwatch, a breakout hit.

SEE: Virtual and augmented reality policy (Tech Pro Research report)

The death of World of Warcraft has been predicted for years. If Legion is successful, Blizzard may be able to stave off the game's inevitable decline. For more than 10 years, World of Warcraft has remained a high-polish product targeted at an audience of passionate gamers. By changing with the market, making the game buy or free-to-play, Blizzard could invite back 100 million passionate gamers willing to invest money and time in the World of Warcraft.

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About Dan Patterson

Dan is a Senior Writer for TechRepublic. He covers cybersecurity and the intersection of technology, politics and government.

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