tag:blogger.com,1999:blog-1145173277892420005.post2069358619565248001..comments2015-08-14T17:40:22.586-07:00Comments on Be Healed!: How's Blizzard Doing At the Bank?Unknownnoreply@blogger.comBlogger3125tag:blogger.com,1999:blog-1145173277892420005.post-47210547544966152222011-08-15T19:38:28.031-07:002011-08-15T19:38:28.031-07:00The GAAP revenue for WoW is up from a year ago, bu...The GAAP revenue for WoW is up from a year ago, but that's because the GAAP revenue includes deferred box sales revenue from Q1 2011 and Q4 2010.<br /><br />The non-GAAP revenue, which does not defer such sources, is actually down slightly from Q2 2010.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1145173277892420005.post-69500357613887441332011-08-11T09:14:14.924-07:002011-08-11T09:14:14.924-07:00Nope. There will be no price increases.
Bad Pres...Nope. There will be no price increases. <br /><br />Bad Press would outweigh the 10% in your model, which is overlooking a few revenue sources. <br />I<br />t does not compute cost for future expansion upgrades that a 15% loss of subscriptions will no longer buy. Blizzard NEEDS WoW to remain the most popular MMO in the world. Scare off 15% of your subscribers and that will be 15% fewer box sales when the next expansion comes out: roughly $100 million or each expansion that alienated subscribers are not going to buy. <br /><br />And how is that going to get reported you think? The mainstream press bonks Blizzard for what amounts to about a 7% subscriber loss this year. Expect a crucifixion if they lose any amount of subscribers because they made the illogical mistake of trying to charge for a game that is technologically an antique.<br /><br />And then, look at the potential for micro-transactions. This is the main reason that Blizzard is introducing the real-money auction house to Battle.net: They are going to reap a fortune from that. But not if they don't maintain their player base at an acceptable level.<br /><br />Also, let me bring you this nugget from the merger agreement in 2007 to put these Vivendi concerns to rest:<br /><br />"World Of Warcraft creator Blizzard Entertainment has been designated a stand-alone division reporting to VU Games' CEO, and is not part of Tremblay's [Martin Tremblay, COO of Vivendi Games] product development mandate." <br /><br />Translation: Blizzard turns over a dividends check but does not suffer input from Vivendi overseers.<br /><br />Gamasutra says this, talking about 2007 financial numbers:<br /><br />"And there's a reason why Blizzard have been and are left well alone - the clout that comes with this mindblowing statistic: "Blizzard Entertainment [which has "over 9.3 million subscribers" to World Of Warcraft] has projected calendar 2007 revenues of $1.1 billion, operating margins of over 40% and approximately $520 million of operating profit." <br /><br />Come to think of it, if they were working a $520 million profit in 2007 (real numbers), your projection that they could get $492 million with a $3 cost increase just can't be accurate. At all. I'm not enough of an accountant to understand why though. :(Merinnahttps://www.blogger.com/profile/09716500474861624149noreply@blogger.comtag:blogger.com,1999:blog-1145173277892420005.post-57593682494654913052011-08-10T16:33:39.957-07:002011-08-10T16:33:39.957-07:00Ok, some quick mathematics.
Assume WOW has 12 mil...Ok, some quick mathematics.<br /><br />Assume WOW has 12 million subscribers, to make it easy.<br /><br />Current: 12 million X $15 per month = $180 million per month in revenue<br /><br />Possible: 12 million X $18 per month = $216 million per month in revenue.<br /><br />A simple price rise of $3 per month, a seemingly small rise, provides Blizzard with an immediate boost of $36 million per month or $492 million per annum.<br /><br />Remember, Blizzard will not have to increase "costs" at all to enjoy an increase in revenue of 20%. <br /><br />Consequently, all of this revenue will drop to the bottom line as profit. <br /><br /> Remember, all of Blizzards profits are attributed to Vivendi, as the parent company.<br /><br />If WOW were to suffer a drop of 5% of subscribers, Vivendi is still way ahead. 10%, still ahead. <br /><br />I personally can see a rise in the subscriber price soon-ish.<br /><br />SomaricSomahttps://www.blogger.com/profile/03233665857864303701noreply@blogger.com