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WoW makes huge profits

Grinding for gold
Wednesday, 17 September 2008, 10:50

GAME MAKER BLIZZARD has revealed that its WoW network has cost it $200 million dollars to run over the last four years.

The outfit revealed during its Analyst Day conference call yesterday that the price has been over $200 million since the game launched in 2004 according to Kotaku.

This figure does not include the cost to develop the game, but includes payroll for the entire staff, hardware support, and customer service.

This is quite a high figure but hacks have got out their pencils and calculated that if WoW has only nine million subscribers who are paying $15 a month to play, and Blizzard claims there are 10 million, it is making $135 million every month in subscriptions.

That means that Blizzard has run its entire operation for the last four years on two months worth of income. It is not so much milking a cash cow as milking a cash elephant. ยต

L'Inq
PC Magazine

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Not all subscribers pay $15

There are only 2.5 million subscribers paying $15 dollars or the equivelent in Europe/North America. A substancial 5.5 million subs come from Asia who don't pay anything like $15 a month. Still, the figures are none too shabby!

posted by : Jon, 17 September 2008 Complain about this comment
Estimations

The fact is, Blizzard never thought they will be THIS successful. Their estimations were a bit more modest & thus their projected profits as well. This, with a multitude of other factors allowed their bean counters to reach a $15/month subscription fee. 
But now that they are literally swimming in money they find it difficult to do the right thing, lower the subscription cost.

It's very easy to get used to something better, kinda hard to go a few steps back.
Unfortunately this sort of greed will stifle growth. If WoW subscriptions would be as low as $5 it would allow VAST numbers of people from other countries to subscribe.
It would EVENTUALLY lead to greater profits.

They will tell you that due to the weakening of the dollar it makes little sense...they will claim they will have significant cost overheads to provide support in other languages...that the WoW network will be too expensive to support that many users etc etc etc.

At the end of the day, it's all excuses, and the price has no justification. It's easy to say "But there are 10 million users, surly there is justification!"

At this price, it's like a new PC game every month, except WoW is not as innovative as a new game every month.

Blizzard might know that even if it had the option to advertise to the entire world, there would only be so many people that would subscribe. The number of new subscribers has most likely peaked & is on a decline.

So why $15? because it's the highest price blizzard can get away with & they know it.

Bottom line; Blizzard is milking you, smile sucker.

posted by : Someone Special, 17 September 2008 Complain about this comment
Price vs. cost

Someone Special:

Please come back when you understand the difference between price and cost. (Hint: there doesn't have to be one, but it's nicer for the seller if price is higher)

posted by : Jay Bee, 17 September 2008 Complain about this comment
Wow, chill out big guy

Someone Special, take a chill pill!

Of course they will continue to charge $15 a month (actually, they have a graduating scale of how much it costs based on if you pay for 1, 3, or 6 mos at a time, but $15 is a good working number for this example).

If they can charge $15 and they are still growing in subscription numbers (peaked???) why wouldn't they? They have found a number the market can not only bear, but is willing to pay for. If you don't want to pay, don't play the game. I don't like paying $60 for a new game, so I don't buy it. Simple.
I have a set gaming budget for the year and if I want to spend it for subscriptions vs. one-time expenses it is up to me, the gamer. I drop $15 just going to the movies, and that is before popcorn.
Sure, I wouldn't mind if they only charged $5, yes they would get more subs, but I'm willing to pay what they are charging now.
That doesn't make gamers suckers, it makes Blizzard very savvy to have figured out a business model that works really really well.
Wish I'd have done it first.

As to WoW growth, when I first started playing WoW 2.5 years ago, there were almost 8 million playing. Last year there were 9 - 10 mil. playing, this year its almost 11 mil.
Where I come from we call that growth. :)

,ValentineS

posted by : ValentineS, 17 September 2008 Complain about this comment
hmm

I'm surprised blizzard hasn't lowered its monthly fee by now, that would make sure no other MMO would ever come close to it.

No other MMO out could compete with WoW at $5-8 dollars a month.
I would play WoW again at that price.

posted by : Matt, 18 September 2008 Complain about this comment
Greedy bastids

...And then after making several tens of million per month, they decide that gouging their customers extra for each expansion that they release is acceptable too.

If CCP with around 200,000 subscribers to EVE Online can provide expansions with the cost covered as part of the monthly fee, then surely Blizzard is more than capable of this as well.

posted by : John, 18 September 2008 Complain about this comment
Who's really surprised?

For anyone who's played WoW and endured the crappy infrastucture that was used up until late, which mind you still only caters for American and European consumers in terms of server locales, it's no surprise they're making such profits.

What with the initial price tag the game came out with, plus almost 4 years of subscriptions, and what appears to be a successful second expansion, i'd say those profits are sure to continue to mount. Hopefully this means we can expect outstanding this from Blizzard in the future, i.e. a continuing trend.

posted by : Trent, 18 September 2008 Complain about this comment
Over all cost.

I think that some of you guys are forgetting that Blizzard gives us a lot for the price. In the 4 years that it's been out, it's only now putting out it's second expansion. They add raids and extra content with patchs, added a TON of new quest, are fixing bugs that pop up and more. Anyone remember EQ and the, what 20 expansions now? How many new instances or raids came out of that, that you didn't have to pay for extra?

This is not including the MASSIVE amount of bandwidth they have to supply per month. You can bet they're not just paying for one 10 meg line going into the place. I don't know what exactly they are running but I can bet it's not cheap. 

The 15 per month isn't much considering how much other things cost for a one time expense. 50 cents a day to play something for a couple of hours each day isn't nearly as bad as going to a movie and spending 15$ for a an hour and a half movie.

posted by : Dall, 20 September 2008 Complain about this comment
15 bux a month!?

why not just play for free? 2moons by acclaim. like WOW, OK not as many features but its getting there and best of all its free.

posted by : Daniel, 22 September 2008 Complain about this comment
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