Blog Post

The How of WoW – World of Warcraft

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Why did World of Warcraft from Blizzard Studios become such a monster success, and how can other online game companies replicate it? Industry analyst DFC Intelligence just published a great report that explains the former while tossing ice water on the latter. Provocatively entitled, “Is It Possible to Surpass World of Warcraft?”, the answer in brief is, Probably Not. WoW succeeded because of Blizzard’s unique ability at creating a mass audience for “hardcore” games, especially in the massively multiplayer online game (or MMO) market; at the same time (and this is a very valuable reminder), the game’s astounding success is more complex than usually understood, especially in Asia.

Some bullet-points from the report after the break.

Chinese Secret
Perhaps the most extraordinary figure behind World of Warcraft’s success is its 5 million registered players in China alone. But unlike US and EU players, who each pay a subscriber fee of about $15 a month, Chinese pay to play by the hour, and what they pay isn’t much: the yuan equivalent of $.04/hour. And while they play a lot, this also means total revenue from China is just 15% of WoW’s Western market. ($30 million versus $200 million, in 2006’s second quarter.)

The Overhead of Orcishness
In terms of total unit sales, DFC’s report notes that WoW actually sells about comparably to established gaming franchises like Electronic Art’s Madden and Need for Speed sports/racing titltes. But while World of Warcraft has the added revenue of monthly subscriptions, it also requires the added (and expensive) overhead of managing a leviathan network of online players, and constantly creating new content for the most rabid players. So maintaining that revenue comes with an intimidating investment of resources– the classic “laying down new track for a bullet train that’s already left the station” challenge.

Treadmilling Alone
World of Warcraft is successful in large part because it’s a multiplayer game that’s designed, paradoxically enough, to be played alone. And according to a PARC research study cited by DFC, most WoW players play the game solo most of the time. (Read more about it in Terra Nova’s fascinating post, “Alone Together“.) Doing this creates a more consistently satisfying experience for individual players, while removing much of the labor that companies incur through player abuse and scams rife in MMOs.

Elvish Counterstrike
According to DFC, Blizzard has expanded and catered to the player-versus-player experience (or “PvP”) so well, they’ve fostered a market of gamers who might otherwise prefer competitive combat games like Counterstrike and the Battlefield series. This is another key point, because MMOs traditionally underserve the PvP audience.

The Blizzard Difference
While World of Warcraft is the first MMO from Blizzard Studios, most of Blizzard’s single-player games from the past 10+ years have had a popular multiplayer add-on component. As DFC notes, this has given the company a tremendous, unprecedented base of experience to create and scale WoW to a worldwide audience. (While the international popularity of Blizzard’s games has helped them create an equally global market for World of Warcraft.)

Read the entire report here. It’s sobering news to those who think their company can create a WoW of their own. Still, the report also includes a DFC forecast projecting MMO revenue growth in the next few years: 17% more revenue in 2007, and a head-spinning 55% more in 2008.

But given the above, that money’s not likely to come by treading in Blizzard’s giant footsteps.

20 Responses to “The How of WoW – World of Warcraft”

  1. martmart

    Actually, the number of US subscribers is on a steady decline in the last year. Wrath of the Lich King is nothing if not mediocre from what we’ve seen so far, and WoW doesn’t add character classes fast enough to keep the community interested. The game is slowly dying, but it WILL be a very, very slow death, and it may not ever have a successor.

  2. Matthew

    I know many players are turned away by this game for the price. $15 is a load especially when you can’t get to the computer and enjoy the game for a few hours. Me and my friends use a completely legit website that allows you to to fill out surveys and after following the instructions on what needs to be completed for those surveys, you are awarded points in return. It takes some time but if you gather up some friends and fill out a survey a day it add up rather quickly.

    The website is called gaming lagoon. They have all of the WoW merchandise such as the actual WoW Game and WoW Burning Crusade Expansion. And most of all they have the 60 Game Cards. The only information needed that has to be legit is you account for gaming lagoon. After you collect so many points you can use them to purchase anything you want. Gaming Lagoon does the rest and ships the item right to you.

    If I haven’t mentioned it yet, this is just an alternative. I know there’s a reason to why MMO’s have subscriptions but if you wan t to try something different in order to play an MMO then try it. Like I said, the more people you have to join up and do the surveys with you the easier it is to get the items. Give it a shot. If you don’t think filling out random surveys is for you then ignore this message. I also suggest a spam account for this since the companies of the survey will contact you regularly for updated offers and products.

    Almost forgot… here is the link to the site where you can sign up.

  3. luis peres

    World of Warcraft from Blizzard Studios is a boring game,etc, etc, etc.. I played it few days and i was thinking later that i was playing a cartoon game without any sense. World of Warcraft from Blizzard Studios is the brother of Guild Wars, the same graphips, the same theme and now i am making a fun of myself when i remerber how it was possible that those children programers cheater of my fantasy and with that poor game made me pay 15 dollars. ja ja ja ja, without questions, some fellows come to this world with luck an i think that the team of World of Warcraft from Blizzard Studios are those kind ok people. i am sorry for me, but in one way, never is too late to undestand among good taste, mediocrity and ignorant things, which ones choose to play and know i choose my excelente ps3. thanks to open my eyes,World of Warcraft from Blizzard Studios.
    coment: i have something in my brain that i dont gona tell you, never.

  4. Rob Dapore

    $15 a month is chump change. Honestly, if you’re the type of gamer who freaks out over $15, they don’t really care that they don’t have you as a customer. You’re telling me that if you could get 15 hours of enjoyment for $15, it wouldn’t be worth it? I’m guessing you never go to the movie theater? Or get popcorn?

    Frankly, if you’re unwilling to part with the $15, you’re probably very young and the game is better without you anyway. I think $15 is extremely reasonable and if I absolutely loved a game, I’d rather they charge even more. That would mean two things: 1) They would have more money to spend on the game 2) It would more likely keep little kids out, and they’re the ones who ruin games.

  5. I am not a hardcore gamer, just a kid without allowance. I dont play that much, maybe 13-16 hours a month; so it is too expensive for me. I used to play on a friend’s account, (yeah, i know its illegal) but now i can’t since i can’t download burning crusade. the online download doesn’t work. i am exceedingly bored and somehow passed most of the summer without an mmo ir game, just watching anime. to finish, well,-i know my point is not clear; i have been sidetracked with my life story- wow is too expensive for a minority of people who don’t play so much. wish i could pay like 8 cents an hour. would play then. It’s more expensive if im hardcore, but there tyou go im not. so i wish WOW could be pay by hour.

  6. Warcraft “pay as you play”

    you see, a large number of people play 8 or more hours per day

    that’s $10+ per month. only slightly cheaper in china for the ‘typical’ player

  7. Ryan Weaver

    Don’t say you’re a gamer then try to defend yourself by saying you have a life. Everyone has a “life” regardless if you’re a gamer or not… Also, Dungean is spelled Dungeon. Not that you play them all, but you do when you’re bored? You seem like a gamer in denial… Did someone online tell you to “get a life” and you took it so much into heart as to defend yourself against your own comments? Oh and I’m a gamer that goes to College full time and works part time, does that mean I have a life?

  8. I’m what you say of a gamer but I do have a life lol. I play games like COD2, BF2142, WoW, Gunz Online, Dungean Siege 2 and Broken World. Its not that I play them all but I do when I’m bored, I really only play WoW and COD2 cuase there more fun and I’m in guilds on both games and when your in those you need to atleast be a gamer or no since of being in them. Well I’m tired of telling all these stories later.

  9. I have a lvl 64 paladin that I lvled from when he was lvl 60 but now that the expansion has come out I’m still on the virge of lvling him to 70. I’ve always loved the game and its an enjoyment for me and all the others and if you don’t have it I suggest you get the game and atleast try it out. I know if theres over 6-8 million people playing the game that you will play that adventuring game. Enjoy! James

  10. I’ve noticed that you have people comparing WoW to Second Life. This is a fundamental mistake.

    Second Life is a virtual world. In this virtual world, exists many different games if you so chose to play them. One of these games that have become really popular is called Tringo.

    WoW is a MMO that is a full-on game. I do not think it’s possible to compare the two, but eventually, WoW can exist in Second Life.

  11. I actually played counter strike for the first time a few months after playing WoW. I am by no means a gamer, but I was sort of puzzled at Counter Strike. Run around, with a gun, that shoots, and you aim it at people who are jumping around. Yeah, it had it’s moments, but sheesh. In WoW, the PVP system is pretty friggin complex. Tons of ways to attack, defend, counter each others moves, anticipate abilities based on character classes and races, lasting rewards for winning, items and learned talents that have an effect on how you fight and interact with the world, etc etc etc!! Again, I’m no expert on the genre, but shooter games just seem so one-dimensional. Why play checkers when you can play chess? Golf would be boring without lakes, sand pits, wind, etc etc. you get the point. :-)

  12. The point about “Elvish Counterstrike” is a good one. Too often game developers overlook the hardcore PVPer when developing their virtual worlds. The best thing Blizzard did was to create a balanced atmosphere for multiple play styles and personalities to create a diverse appeal.

  13. I tried WOW about six months ago along with Second Life and a couple of others under the thinly veiled guise of ‘seeing what my customers do’.

    I got hooked pretty quickly, but as soon as work got crazy, it (and online chess, fitness and seeing my mum) got less time allocated. Fortunately for Blizzard KC, my girlfriend, is now completely hooked and talks to me like I’m a noob.

    WOW is amazing. It just got the balance perfect. Plenty to do, plenty of variety, team play which can be good and bad (important) and constant development.

    Plus, I’ve only really played one character. You could play about 10 different types of character , 8 different races and you could do each of them ten times and still have a different experience.

    Second life didn’t do it for me. I didn’t know where to start and it didn’t lead me on quickly enough.

    Here is my post on user created services;

  14. Fans of the concept of a perpetual technology monopoly usually don’t recall the days of Lotus 1-2-3, the first PC product that was considered to be perpetually and eternally unbeatable. (Students of history will recall that it got its ass handed to it by a little Macintosh spreadsheet product called Excel 1.0.)

    When you assert that a technology product will be on top forever, just remember that “forever” is a very long time.

  15. Saeed Goraya

    I was in the same situation as Cameron – Had an account for approximately 8-9 months, played occasionally and sometimes would go a month without logging in

    My play style obviously did not justify me paying $15/mo., just took a while for me to realize it ;)

  16. I had a WoW account for about a year (June 2005 to May 2006) and played only occasionally. I never leveled a character to Level 60 and only occasionally played solo. Despite this I felt I was spending too much of my spare time playing WoW, even though the number of hours I logged were a mere fraction of the hours logged by most players.

    For the regular gamer who spends more than 4+ hours a day playing WoW, paying $15/mo is acceptable. For players likely myself who only played 2-4 times a month (an average of 10-15 hours/mo, mostly weekends) I felt the pricing structure was far too high.

    I’ve long felt that Blizzard needs to offer a better pricing structure for the casual gamer like myself who doesn’t have the massive amounts of spare time it takes to level a character to 60, but really enjoys the game and wants to continue playing. I’m just unwilling to spend the $15/mo for that right.

    I’m sure there are thousands of people out there like me who feel the same and have let their accounts expire, who probably wouldn’t have had Blizzard given us the option to pay an hourly rate like the Asian market.

    Blizzard, I hope you are listening. I would love to ressurect my account and continue to play. But not for $15/mo.

  17. I am not a player but have watched it played and have discussed it at length with my level 44 friend.

    the game play is seamless
    the solo play is great
    the story is great
    it is really really deep if you want it to be
    it was the game that players were waiting for
    there is no real end to the play ..

    i am not a player but i do see the addictive nature…interestingly when i asked level 44 about new games that were coming out … his response …i dont need a new game …this is the one that i was waiting for …a thought that seems to be echoed from the world.