What Entrepreneurs Can Learn from Blizzard Entertainment

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Winston from Blizzard's Overwatch

In November of last year, Blizzard Entertainment announced that it’d no longer share World of Warcraft subscriber numbers in its quarterly earnings reports.

“There are other metrics that are better indicators of the overall Blizzard business performance,” the company said at the time.

World of Warcraft subscriber numbers had peaked in 2010 during its Wrath of the Lich King expansion, when it reached over 12 million subscribers. The next two expansions didn’t resonate with subscribers as well, and that number quickly dropped to 10.2 million in 2011, 9.1 million in 2012, and 8.2 million in 2013. 

But in a surprising turn events, that number shot back past 10 million in 2014 with the announcement of the Warlords of Draenor expansion. Players I’ve spoken with say that this expansion seemed to reinvigorate the interest of the playerbase by getting back to the core values of the game, and this seems to have held true — for a short time. The early play experience was highly engaging, but the expansion didn’t have much staying power, and only a couple of months post-launch, subscriptions were in freefall again.

As of the November earnings report, the last time for which we’ll have accurate data, the number stood at 5.5 million — the lowest it has been in nine years.

There was a lot of speculation about Blizzard’s reasons for pulling the plug on this reporting. Some thought that the negative press from the games and tech media and the hyperbolic “WoW is dead!”  rhetoric from players — something that has existed for most of the game’s life, regardless of the situation — were causing Blizzard PR problems when it came to buoying the subscription number. My interpretation differs.

Blizzard knew that while WoW was not dying, it had certainly already lived past expectations and was going to decline into a more niche product played by a few million dedicated fans, and it was going to do this faster and faster. It would still have a strong playerbase that could likely support several future expansion releases. It would still be able to cash in on short nostalgia-driven subscription spikes with new expansion releases, but it would not always remain the company-buoying revenue behemoth that it was. And it figured this out years ago.

The decline of World of Warcraft is not a problem in and of itself. It is more than ten years old; it’s amazing that it has lasted as long as it has, and it’s also fairly amazing that the team has managed to improve it over time as much as it has without starting from scratch. Most importantly, it has already made Blizzard more money than anyone ever imagined it would. What made it a problem is that when the subscription decline first began, while Blizzard had other big titles in Diablo and Starcraft and likely wouldn’t fold, it didn’t have anything in play that could keep the momentum and growth of the company from going in the reverse direction should Warcraft subscriptions really plummet.

As of 2016, it has fixed that problem, and it has done that by embracing values that anyone who has worked in startups would recognize.

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Source: Sitepoint