"We think that at the highest level, it’s important for a game like SC2 to have a healthy pro-scene, so we do spend a lot of attention at the highest level of competition."
Blizzard CEO Mike Morhaime took the time to hold a lengthy press conference with the media at the WCS Finals in Shanghai, talking about a very wide range of topics from the success of WCS, Blizzard's approach to different markets, thoughts on esports growth and Blizzard's competitors, Heart of the Swarm, and more! A video is available on Gamespot for those who wish to watch it in video format.
Transcription by Antoine and monk. Press conference was held during day two, before the tournament was completed.
monk, TeamLiquid.net: Why did you decide to hold the BWC in China? What do you think about WoW and SC2’s current conditions in China. And what are you future prospects in China?
Mike: Well, we’ve held events internationally before. We held WWI in Seoul, Korea, Paris, France. We’ve held multiple events. In the past few years, we’ve been focusing on Blizzcon. Since we weren’t doing a Blizzcon, we thought it would be a great opportunity to hold another esports focused event somewhere internationally.
We’ve never held an event like this, I don’t know that anyone ever has in China, but China is the home of our large Blizzard community of any place in the world, so we thought it would be a great opportunity to hold something like this here as a thank you to the Chinese players. As you know WoW is very strong in China. We just launched Mists of Panderia, which has been received very well here.
We think SC2 has a lot of potential here. Historically, WC3 has been more popular. Just kind of the way things happened. StarCraft, there wasn't really a PC gaming market when SC1 and BW came out, but when WC3 was released, it was when the gaming market started exploding. So I think there’s still a lot of untapped potential for SC2. And then the last part of that question I think was around the potential for the market, the gaming market here in China? China is still one of the fastest growing gaming markets in the world. There’s still opportunities for improvements for broadband connections throughout the country to give people more accessibility to play online games, although online gaming is huge here.
But as you go out of the tier one and tier two cities, there’s going to be a lot more opportunities to bring more people into gaming, especially premium gaming such as WoW and StarCraft. And so we look at this as an opportunity. I think that Europe and the US are a lot more mature markets, so they’re very important markets to us. Still, that’s where we’ll continue to spend a lot of time and focus, but in terms of future growth, it’s probably going to come from places like China and actually Latin America and Russia, we think.
Caredo Moreno, Levelup.com: While you support pro-gamers with impressive events, what are your plans for casual and mid-level gamers? And also do you have any other plans for Latin America events?
We think that all the different parts of the ecosystem are important. We think that at the highest level, it’s important for a game like SC2 to have a healthy pro-scene, so we do spend a lot of attention at the highest level of competition. It’s also a big focus of ours to make our games more accessible to new players and to casual players. So a lot of the features you’ll see in HotS are intended to do that.:Better training missions, training section of the game, unranked matchmaking, making it easier to find and meet up with their friends online. I think there’s a lot of good suggestions and comments about the social experience on battle.net and we’re really trying to work to improve that.
Let’s see, second part of the question… Right, so you know the things we've been trying to do this year through the world championship series I think are a start to give players around the world an opportunity to excel within their region, creating local heroes. We have some, actually, great stories going on at BWC this year. We’re in the process of looking at what our plans are for 2013; I don’t have anything to announce right now, but we do think there are opportunities to improve the whole structure around esports.
"...the things we've been trying to do this year through the world championship series I think are a start to give players around the world an opportunity to excel within their region, creating local heroes."
Guillermo, from Argentina: When I was a kid, my father told me all the time, “Enough computer gaming, enough. Stop gaming on that computer.” Today with esports being pro, do you think I can get away with it?
I think so. Is it up to me? Absolutely. You know I think it is becoming more and more accepted for people to spend time playing online and interacting with online. I think it’s a fallacy for maybe people who maybe don’t understand what people are doing when they’re spending time gaming online. They think they’re being antisocial maybe, but in fact it’s the opposite. They’re actually spending time socializing, competing, and being a part of a larger community. Much more social than television.
Unknown: Alright, you mentioned broadband roll-out and break markets as one of the challenges you faced growing StarCraft and other Blizzard games. What are some of the other challenges that you've faced? In terms of growing your business and break markets.
I think that the big opportunity is these economies are developing. There are more people who can afford to spend money on entertainment. More and more people have access to gaming devices and good broadband connections. And these are the kinds of things that stand in the way of growth for us. And so I think a lot of these barriers will go away automatically without us having to do anything. So our job is just to make our games accessible to people to those people in those markets through good distribution, good online distribution, and convenient payment methods for people in those areas.
Frodan, Gamespot. I want to ask about your overall satisfaction with BWC and the WCS series. What are some things that you felt Blizzard got right, maybe some of the challenges you guys can improve on if it was made to come next year.
Ok, so you’re talking about the entire WCS this year? Well I think it’s been great watching a lot of players, especially outside of Korea that are having some very good performance. And actually, one of the pleasant surprises at BWC is how well the non-Koreans are doing in competition.
"... there are also some challenges just with all of these tournaments going on in terms of, as a spectator, not necessarily knowing what to watch or knowing what the significance of winning this event or that event. And having putting pro players in a position where they have to choose between two very important events. And those are some of the things we’d really like to be able to avoid in 2013..."
You know, I think it was an incredibly ambitious undertaking to hold all these tournaments all over the world. We certainly ran into our share of technical issues. It turns out holding an event like this in China, broadcasting in multiple languages and streaming to players are round the world isn't as easy as you might think. And so, we've been working though certainly some challenges yesterday, but I think that’s been largely resolved and the overall quality of our streams and some of the glitches that occurred yesterday are behind us and we’re going to have a smooth rest of the day.
That said, there are also some challenges just with all of these tournaments going on in terms of, as a spectator, not necessarily knowing what to watch or knowing what the significance of winning this event or that event. And having putting pro players in a position where they have to choose between two very important events. And those are some of the things we’d really like to be able to avoid in 2013, better coordination and corporation amongst partners.
Rodrigo from UOL: What’s the next thing we can expect from Blizzard and esports. What’s the direction we can see for esports and Blizzard
Well, we’d like to continue growing esports and reaching more people, improving the overall quality of experience throughout the year, being able to tell a better story so that you can understand what the progression is, what the significance is of winning various events. We are, next year, planning to have our global finals at Blizzcon and so that’s something that everybody can expect in terms of the path to getting to Blizzcon. That’s not something we’re prepared to announce today, but it is something we’re working on with all of our various partners around the world.
Sebastian, Spanish speaking caster from Chile: Since I travel with Blizzard for all the WCS events, what do you think of including Spanish and Portuguese streams in future events?
You know, I think that those types of questions will really be answered by the amount of demand in the various markets. We found that by offering English, you end up hitting a really broad, really the majority of people that are watching. But if there is demand in various regions, then I think that’s something we’ll have to solve for the local communities.
Manuel Sepulveda, Spanish speaking caster from Chile: As a player or fan from Chile, we just have two big events: WCS and WCG. For us, this is very important, so first, thank you for having this kind of event, a little event in our country. And we are expecting more. Can we expect more in these countries from Blizzard for esports? For example, WoW and StarCraft.
In general, we view this as the beginning and so we would like to see it grow and in what form that takes is something we’ll have to figure out after we finish our finals and go back home and do our own postmortem and talk about what we can do better. But right now, our focus is on putting on a great event here. We’ll talk to all our partners and we’ll talk about what we can do better next year. But I do think 2013 is going to be a very important year for esports, for us, with HotS coming out. I think the WoW tournament is actually surprising us in terms of the amount of interest around that. So we can talk about what we can do with that next year too.
Andre Depalomino: SC2mx, caster from Mexico: Where do you see SC2 right now? We know that when HotS comes out, it’s going to be kind of a boom again in the scene. But do you think it’s going to have the attention that it deserves, because right now the scene is kind of, might be in a downfall.
Well, we’ve been getting a lot of positive feedback from the community around HotS. We think it’s a great expansion. You know it has so many things. The campaign is incredible. I think it’s our best campaign ever. The cinematics team outdid themselves. I can’t wait to share the work that they’re doing. And then on the multiplayer side, I think that we have a great development that’s working on the polish and balance of multiplayer, which obviously is critical. And I think some of the additional features we’re adding will help make the game more enjoyable for casual players and just more fun, more accessible and more fun. We’re looking forward to a successful expansion launch, and I think that it will build on the foundation that WoL has set, which is a good foundation.
Unknown: Right now it looks that to be a progamer, it’s viable as a career. If you had a son or somebody related to you, would you support that? Would you support him to be a progamer?
Sure, I think it’s important to do what you enjoy doing, first and foremost. So if my son wanted to do that if he loved doing it and really wanted to put his focus and attention into it. It’s really not an easy thing to do. It takes an incredible amount of discipline and focused attention to really be successful as a progamer, but sure, of course I would support that. I think that balance is important and education is important. You know, I would also encourage everybody to get an education and become well-rounded, but at the end of the day, I think you need to do what you enjoy doing. Life is short, do what you enjoy doing, and good luck.
James Colony, GamePlanet: The event here is being streamed free. Most SC leagues are PPV. Is free streaming you guys are really pushing for next year?
I think it’s important to offer a free option, a decent quality free option. I think it’s important to grow the size of the audience and really lower the barrier for people who are interested and curious. That’s something we’d like to see in the future. That’s what a lot of the broadcasters are doing already. In terms of the quality of stream, we’re providing a 720p stream for free. Maybe I could see a situation where maybe the highest quality streams are something that have payment gates in front of them. But I do think that there’s some level of quality that should be offered to everyone.
Leon, Coisa De Nerds, Brazil: I would like to refer back to a point to you just mentioned before, which is the amount of content that is being produced nowadays related to SC and the amount of tournaments we have. From the spectator point of view, I think that today there’s too many things being done and in some way, this kind of diminishes the value of the content that is being produced. The tournament are now losing importance because you have so many of them. Is Blizzard thinking of addressing this issue especially in terms of licensing from now on.
I’m not so sure it’s the amount of content that’s being produced. I think it’s the lack of story around the content. If you look at other popular sports, maybe baseball, which is something that is popular in the United States: there’s a huge amount of Baseball content, but there is a story around what’s happening, there’s a context for everything, and I think that’s important, because all games aren't equal.
I think that’s where we need to work with our partners and focus on, “how do we establish an ecosystem and a structure around all of this content so that players understand which are the most important tournaments, what does it do in terms of the overall relatively ranking between players, how do I know who’s the best, how do I know this is a tournament that maybe means more than the other.
Of course the tournaments know it really matters which players you have in attendance, various ones. If you have all the top players out of the tournament, it of course means a lot more than if you don’t. This is a question we’ll try to answer for 2013.
"I love watching Flash. Some of the GOMTV Korean Terrans I really enjoy, MVP, MMA a little while back when he was doing well. I like watching Scarlett. I’m going to be rooting for…well actually, I don’t need to say who I’m going to be rooting for, but I think it’ll be interesting to see how Idra does in this tournament. You know, it’s great to see him doing well."
monk, TeamLiquid.net: I’d like more about you as fan. What rank are you right now and what race do you think?
I’m Terran, I’m Bronze. I’m trying very hard to get into silver. I play a lot. I’m going to get into silver, so next you ask me, don’t worry, I’ll be silver. Maybe even…well…or I’ll be gold. I love it, I love watching the pros play, I love reading about it. You know, I enjoyed SC1 a lot also. Actually, all of our games, but SC2 is the first RTS that I’ve been able to have a lot of fun playing online through AMM, because the matchmaking matches me against people that I have decent chance of winning against all the time. And that’s made a huge difference for me as a player in terms of having a good time playing. I know there’s a lot of things…I’m not saying I’m a great player, but I have a lot of fun playing and I really enjoy watching.
monk, TeamLiquid.net: Also, who are your favorite players, professional players, and why do you like them? Who do you like in this tournament? Who do you think will win and who do you want to win?
I love watching Flash. Some of the GOMTV Korean Terrans I really enjoy, MVP, MMA a little while back when he was doing well. I like watching Scarlett. I’m going to be rooting for…well actually, I don’t need to say who I’m going to be rooting for, but I think it’ll be interesting to see how Idra does in this tournament. You know, it’s great to see him doing well.
Pedro, caster from Brazil: There has been a lot of discussion on SC as a business... ...It has been suggested that SC might have some kind of premium portraits or units that might be able to be purchased. Do you there’s a direction you might consider seriously going? It’s going to be a change, because it’s probably going to be something that changes a lot. How do you feel about the progression, and are you going to strive to get more of that kind of content? How do you feel in general about this; are you concerned about a change to the philosophy or the way people perceive the game?
Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model.
Sebastian Villaseca Aguirre, SC2LA - Chile: I want to know, you already talked about creating stories about players, creating role models maybe. I know that one of the objectives of World Championship Series was to create content about a personal life, about some player. Do you think that that mission was accomplished with this year?
Yeah, I think that it was largely accomplished. I think we were able to create some local heroes, the Home to Hero program where we had casters from around the world interviewing local winners of the WCS actually produced some really great interviews, so hopefully some of you have had the chance to see some of that.
It's been really great to learn about these guys, and how they were able to get good enough to win the WCS and what they think about BWC, so I think that was really interesting. I think that this is sort of where there's opportunity for some very interesting stories. Already we've had some pretty surprising upsets, with Stephano being knocked out by Idra, or at least losing to Idra and now being knocked out of the tournament. That is not something anybody predicted. Nobody knows how this is going to end, and that makes it really exciting.
Paulina, GameMaster Magazine: There has been a lot of discussion about how American gamers has different tastes from Asian gamers, but Blizzard seems to appeal to all audiences. What do you think Blizzard is doing right, and do you think all gamers should be treated the same?
So my philosophy on that is, obviously all gamers aren't equal, but even within the United States you have different styles of play that people prefer. And I think that the differences aren't so much that players in a particular region are so much different than players in this region, but I do think that maybe the percentages across the different styles maybe varies.
We try to make our games accessible to everyone and we try to take into account the various preferences and styles that people have. I think if we do a good job of that, then that allows it to appeal to players all over the world because then it doesn't matter what the percentages are. Maybe for instance the players in Korea prefer PvP, and players in the United States prefer PvE, and obviously there's PvP players in the United States and PvE players in Korea, but if we have something for these different styles and preferences that allows the game to appeal everywhere.
And then it just becomes the challenge then is accessibility, and recognizing that in some countries, like in Asia, out here a lot of people are playing in internet game rooms, where they don't own the PC they're playing at, they're sharing it with many other people, and your game has to behave well in that environment. And the way that people pay, maybe in some countries credit cards are very popular, and in other countries you have other payment methods that are also popular. We need to make it convenient for people to pay and access the game in ways that they're used to.
Frodan, Gamespot: I think one of the big themes surrounding the BWC was, this is Blizzard's time to shine for this year. A lot of other companies, like Riot had the Season 2 Championships, Valve had the international, how happy are you guys with BWC in that regard and what does Blizzard plan to do to beat out the other companies. Everyone's comparing these three games, and trying to say who's the best. Do you guys feel the pressure? Because a lot of the other companies are controlling it, like they're injecting money non-stop; how is Blizzard going to respond to this?
"SC2 is a very different type of game than the other games you mentioned. It's a very different experience, I think it's very unique, I think it has a lot of things that the other games don't offer, I think that in terms of watchability and strategic depth, I think it's just a very unique game."
Well, the way we respond to everything, really. We're always competing with other companies and other games and everything. The way we've always reacted to that is, we like to learn from what everybody else is doing right. But at the end of the day, we're not focused on what they're doing, we're focused on what we're doing. We're trying to make our games as good as our games can be, and we're trying to provide a great experience for our players. We listen to feedback from our players, and we are always trying to improve.
But I think our games, SC2 is a very different type of game than the other games you mentioned. It's a very different experience, I think it's very unique, I think it has a lot of things that the other games don't offer, I think that in terms of watchability and strategic depth, I think it's just a very unique game. So, we don't really think of it in terms of "Hey, how are we going to respond to everything that these other companies are doing?" We really look at our game, and focus on that, and work with our partners to create a great experience.
In everything that we do, we're looking at how we can do better next time. In terms of the investment that we're making, we're also making significant investment. We're maybe doing it in a different way. We spent an awful lot of money in terms of travel, and hotels, in terms of making it easy for all of these pros and the people involved in putting on these tournaments are able to get to the places they need to be. And so maybe it's not as flashy as putting all the money into just prize pools, but it's still significantly expensive and from what we're told, that's actually more helpful for the ecosystem than just the flashy prizes.
James, Gameplanet: What do you think it would take to get SC2 broadcast on TV in the west?
Ha. You know, I'm not so sure that we're far away from being able to do that. I think it really comes down to the viewership, the eyeballs, being able to tell a story, and being able to, with some amount of certainty, to be able to say "Hey, if we do these things, how many people are interested in watching?" This event right here is being televised in China and Korea. Obviously over the Internet all over the world. That alone is actually a huge feat when you consider we're in China, and we're broadcasting a live event globally. That does not happen, really, ever, except for maybe the Olympics.
Gunta, GuntaTV - Brazil: You already told us that one of the goals for Blizzard is to develop new markets, new places where it's not already totally saturated. Speaking about Latin America, and Brazil, are you happy with the movements that you've already made? Do you have some new plans? What do you guys have in mind - you guys translated the games to Portuguese, so speak something about this.
I think that in terms of the quality of the games and the localization into Portuguese, I think we're doing quite well, and we've been getting very positive feedback from our players in Brazil. I think in terms of what I mentioned before, one of our jobs is to make it convenient and accessible for people to pay for the games, and acquire the games, and I don't think we're doing a very good job of that right now at all, and it's something we talk about how we can be doing better. But we know that we need to improve in terms of convenience, in terms of acquiring our games.
Sebation, Chile: Do you think right now, in this moment, esports is growing because of players, public figures, and casters, or are the players, public figures, and casters growing because of esports.
Mike: So the chicken and the egg question. I think all of those things are important. I think it's important to have recognizable figures, I think it's important to have stars to root for. I think that's important in any sport. If you follow a sport, you need to have your home team, or your favorite athlete. So I think that's important. I think the casters are very important, in terms of helping the viewers understand the context of what they're watching - that's also important in any sport. I think that actually the casters have done a great job, in not only casting the live events, but also adding additional content in terms of strategic tutorials, and things like that to help players improve. And so I think all of those things contribute to grow the ecosystem, but I don't think it's necessarily that - I think they feed on each other.
Rodrigo from UOL: Do you believe StarCraft can be the eSport that is learned and taught in US colleges and universities, and all over the world? If so, which college would you choose to do a better training in StarCraft?
Well that's a good question. I think that would be great. I think that there's a lot of opportunity for growth and more mainstream acceptance of StarCraft as a sport, or esports in general as kind of a mainstream legitimate sport. I think that things are actually heading in a great direction over the past few years. In terms of college in general, there are amateur college tournaments that are being run, and I think that there's opportunity for these to become more highlighted and followed by the college community. I think it probably has to start there, in terms of growing popularity at the colleges, spilling over into more mainstream acceptance. It's a grassroots thing, and I think that is where it has to start.
You know I got an interesting question in one of the previous sessions. I was talking with Chinese press, and they sort of asked me a similar question. I think another area that actually is the next level, the next step in terms of mainstream acceptance is, media needs to help us. Like, mainstream media really needs to start acknowledging these types of events as significant sporting events, and reporting on them on the level that they would report on other sporting events. Even like tennis, and golf, and things like that, you see reports on TV about what's happening at those things, even though everybody doesn't follow tennis and golf.
You hear about it, and it legitimizes the sport, and I think that when we start to see more of that, where the sports page starts to report on who's winning these major events and doing profiles about the top pro players, not just in gaming press, not just in gaming circles, but actually starting to do that in mainstream circles, I think that that will also help legitimize esports.
James, Gameplanet: How is Blizzard All-Stars progressing, and can we expect it to get the same kind of support that we see for StarCraft?
It is progressing well. We're doing a lot of experimentation with it right now and that's sort of why we've kind of gone dark a little bit in terms of information. We're testing out some things, and we're not ready to talk about what they are. Right now the focus, our next big launch is going to be Heart of the Swarm, and that's really where our attention is. After Heart of the Swarm releases, we'll probably start turning more attention to preparing Allstars for beta.
monk, TeamLiquid: As a community site, we're always wondering how much attention Blizzard pays to us, the community. So I want to ask you, on a daily basis, how much do you personally visit sites such as TeamLiquid and reddit, or do you mostly stick to the Battle.net forums?
No, definitely, I view TeamLiquid and reddit all the time. And actually, I just want to say, you guys are doing a great job. The preview that you guys did for BWC was fantastic, and we really appreciate the stuff you guys are doing. Thank you.
monk, TeamLiquid: And also, how much weight do you put on things that are said on these websites vs the battle.net forums?
I don't think we weigh them any more or less than what we see on our own forums, although I think sometimes the discussion is frankly better on some of these other sites. But we try to keep up on what the community is saying, and what they are suggesting, and we try to take those suggestions for what they are. And some things we agree with, some things we don't agree with, obviously some things we have more information than the people who are making the suggestions. We definitely look at that stuff, and we definitely appreciate the feedback. Even when it's critical, we know that people are making those suggestions because they really care.
Rodrigo, SC2mx: How does Blizzard feel against other games or companies, like League of Legends for example? Do you guys think that these games are taking the public figures, or the player base from Blizzard games? Do you feel threatened as a company?
We don't feel threatened by other games, especially other good games. Like we said, I think we welcome competition. I think it will encourage us to make our games even better. I think it's great when other companies can produce popular games, so good for them.
"StarCraft 2 isn't just a game, it's also an esport... ...So when we made the decision that SC2: Heart of the Swarm wasn't going to be released in 2012, we thought it was important to let people know, and to let them know when they can expect it."
Leon, Brazil: You guys already have a release date for Heart of the Swarm. But from a player's point of view, it seems that there are a lot of things missing from the multiplayer beta of the game that we have access to, especially regarding the Terran race. It seems that you haven't found yet what you want to do with it. How do you guys manage that? Do you have a date, but that is something you cannot put a date on. You don't know when you're going to get this right; how do you manage that?
Well, we do have a general sense for how long these types of things take. Our release date isn't til March, and we feel like we've given ourselves plenty of extra time. One of the questions that I've been getting at this show, is "Hey, how come you announced a release date so far in advance? Blizzard generally doesn't do that." I think the answer to that is, SC2 isn't just a game, it's also an esport. And the timing of our launch actually impacts a lot of people in this ecosystem.
So when we made the decision that SC2: Heart of the Swarm wasn't going to be released in 2012, we thought it was important to let people know, and to let them know when they can expect it. We also, of course, need to give ourselves plenty of time to lock in these features, and everything, but i don't think that the multiplayer features are going to end up being our critical path anyway. So, I think we have plenty of time. It's too bad Dustin isn't here, hopefully you have a chance to hear from him on the thinking that he has around changes to Terran. I know that he has various ideas that aren't locked in, but that he's going to want to be experimenting with during beta. But again, I think we have plenty of time. We're not worried.
Rodrigo, UOL: Do you think that we soon will be seeing Diablo 3 on esports scenario, and how will you get the competitive people out together to an event like this?
We don't have plans to make Diablo 3 an esport. Diablo 3 was never really designed to be an esport, and not every game necessarily needs to be an esport. SC2, on the other hand, was designed from the beginning with esports in mind. Actually, WoW wasn't, but I think there are elements from WoW that we felt worked well in terms of esports environment, and actually we're getting a great response from the Chinese community at this event. I think that there are different ways, there are certainly competitive things that we'll be able to do with Diablo, and I think that at future Blizzcons we might set up different ways for people to compete at the game, but that's very different from creating a professional tournament structure around something like that. In order to do that, you really need to get everything right and you have to have the depth of strategy, you have to look at making sure that the strategies that are successful are balanced, and fun, and entertaining to watch, and all those things. So we're not so sure that that's where we should be focusing for Diablo. There are a lot of other elements of Diablo that are a lot more important.
He's being very politically correct with what he's saying, that's for sure. I imagine no one will be upset with his answers but he doesn't really say anything substantial either, which is a pity.
Not much substance to the answers, pretty much the standard, politically correct answers you would expect. But I guess a company CEO isn't out to stir things up in a press conference. In addition, I doubt that Morhaime is very actively involved with SC2, seeing as he has the entire company to manage, so that would prevent him from going to in-depth on SC2-related matters.
On November 19 2012 19:22 Birdie wrote: He's being very politically correct with what he's saying, that's for sure. I imagine no one will be upset with his answers but he doesn't really say anything substantial either, which is a pity.
i was comment in the same way, +1
This prety crazy that MM is bronze... i mean.. bronze !
He's a bronze Terran.. So thats why they're not changing terran that much in HotS. They're trying to help him get promoted without having to learn how to use new units!
I loved some of the answers he gave. I love he's bronze, and I love that he brushed away talk of other games and focused on Blizzard's games. Thx for transcribing it
On November 19 2012 19:33 Silvanel wrote: A lot of questoions from people from Spanish/Portugese speaking countries, were they that prevelant at WCS or this is just a coincidence?
as a player i can tell you WCS is everything for us
WCG doesnt even exist in brazil anymore cause sc2 is not popular enough, counter strike was saving it for a lot of time but its over now, the only offline tournament for us is WCS, and when IEM comes here also, if someone wants to really compete their only hope is to go pro and do well in mlg, iem qualifiers etc
the qualifiers for local players in IEM were 1 for national and 3 continental, 2 almost impossible to beat as killer and fenix it gets really difficult for anyone to qualify, so yea, thats why latin people makes it so huge, wcs was the easiest to get into, the most fun and the best everything here for sure
On November 19 2012 19:33 Silvanel wrote: A lot of questoions from people from Spanish/Portugese speaking countries, were they that prevelant at WCS or this is just a coincidence?
as a player i can tell you WCS is everything for us
WCG doesnt even exist in brazil anymore cause sc2 is not popular enough, counter strike was saving it for a lot of time but its over now, the only offline tournament for us is WCS, and when IEM comes here also, if someone wants to really compete their only hope is to go pro and do well in mlg, iem qualifiers etc
the qualifiers for local players in IEM were 1 for national and 3 continental, 2 almost impossible to beat as killer and fenix it gets really difficult for anyone to qualify, so yea, thats why latin people makes it so huge, wcs was the easiest to get into, the most fun and the best everything here for sure
sounds like a great case for more WCS to come! and when local investors see how big that gets, maybe a great local scene can develop
On November 19 2012 19:33 Silvanel wrote: A lot of questoions from people from Spanish/Portugese speaking countries, were they that prevelant at WCS or this is just a coincidence?
as a player i can tell you WCS is everything for us
WCG doesnt even exist in brazil anymore cause sc2 is not popular enough, counter strike was saving it for a lot of time but its over now, the only offline tournament for us is WCS, and when IEM comes here also, if someone wants to really compete their only hope is to go pro and do well in mlg, iem qualifiers etc
the qualifiers for local players in IEM were 1 for national and 3 continental, 2 almost impossible to beat as killer and fenix it gets really difficult for anyone to qualify, so yea, thats why latin people makes it so huge, wcs was the easiest to get into, the most fun and the best everything here for sure
Why is esports so weak in Latin America? I can even remember an interview where Major was asked about the Mexican Starcraft "scene" and he just says "there is no scene".
I think the most interesting thing I picked up from this is that they do read TL, and they weigh the posts/opinions here equally to bnet forums or even more than bnet forums in some cases.
I imagine they took a look at the thread about infestor changes with the polls and thought about some of the suggestions, makes it feel like discussing the game here is worth it and we're not being ignored by blizzard.
On November 19 2012 19:52 Dodgin wrote: I think the most interesting thing I picked up from this is that they do read TL, and they weigh the posts/opinions here equally to bnet forums or even more than bnet forums in some cases.
This is hardly surprising. During the earlier years of WoW, Blizzard already reluctantly admitted that they would read external community sites (in case of WoW, primarily Elitist Jerks, which was a bit like the TL of WoW at the time) and that these had a higher signal-to-noise ratio than their own forums.
They can't really maintain an active presence on these external sites or give them too much attention, otherwise the hordes of stereotyped "Battle.net forumposters" would migrate to the community sites, negatively affecting the discussions.
Thank you for posting this interview. It has been interesting to see the way SC2, a game created to be an esport has evolved and how the community evolves with it. It means that there is far more pressure on SC2 than other games, and far more expectations. I see Blizzard taking that very seriously thus far in terms of how they are developing Heart of the Swarm.
On November 19 2012 19:22 Birdie wrote: He's being very politically correct with what he's saying, that's for sure. I imagine no one will be upset with his answers but he doesn't really say anything substantial either, which is a pity.
Did anyone expect otherwise? :p I'm suprised he dosn't end the internew by advocating world peace or something
So basically to summarize: - They have no plan on implementing micro-transactions at the moment, - MM is Bronze Terran, - Even MM thinks the Bnet forums are trash (paraphrasing)
Interesting to hear from Morhaime. He has his hands in all the departments. Also he is the CEO of Blizzard how is he still bronze
I would have loved to hear More thoughts on a Micro transaction Free to play system for Battle.net only having to pay for the single player campaign, or something to that effect.
The man just seems real to me, like he hasn't forgotten why he helped start Blizzard in the first place and he has never really lost the gamer geek side of him.
That's just how he seems to me whenever I see anything done by him.
I think as long as he's at the helm Blizzard is ok, my only fear is what will happen to this company after he retires or passes away, hopefully that won't happen for a long time.
On November 19 2012 19:52 Dodgin wrote: I think the most interesting thing I picked up from this is that they do read TL, and they weigh the posts/opinions here equally to bnet forums or even more than bnet forums in some cases.
This is hardly surprising. During the earlier years of WoW, Blizzard already reluctantly admitted that they would read external community sites (in case of WoW, primarily Elitist Jerks, which was a bit like the TL of WoW at the time) and that these had a higher signal-to-noise ratio than their own forums.
They can't really maintain an active presence on these external sites or give them too much attention, otherwise the hordes of stereotyped "Battle.net forumposters" would migrate to the community sites, negatively affecting the discussions.
Agreed.
Believe me when I say that I'm happy that Blizzard stays out of these forums and just lurks.
Whenever they post ANYTHING in the BNET forums, the trolls, flamers, whiners and jerks come out, basically anyone looking for easy attention.
They're well aware of the effect they have on their own boards, so they do their best to try and appease their own forum goers while also privately reading the community sites that have better discussion going on.
Could they explain themselves about a certain message broadcasted after a certain game, during which they basically said "BW has to go " ? Because that was pretty offensive to me and i'm sure a bunch of other people and well looking at his political correctness here ...
James Colony, GamePlanet: The event here is being streamed free. Most SC leagues are PPV. Is free streaming you guys are really pushing for next year?
What is this? The only major tournament with a ppv model is MLG, and they're getting rid of it as we speak.
....Much more social than television.
Zinggg! Subtle jab, done!
I also find that a lot of the questions are quite shallow and setup to be responded by the political-wordy-no-substance responses that leads to nowhere. Esports journalist needs to press on the issue they want to know and be less vague about their questions to avoid equally vague responses. Of course, not every single one of the questions are like this, but quite a big chunk of it felt that I've gained nothing from reading them.
On November 19 2012 20:22 Azurues wrote: this is nice
but barely any much details on HoTs, just Blizzard overall
Go watch the Dustin Browder interview or read the transcript. He goes into much more detail about HOTS since he's more actively involved in its development than MM is.
plans on making D3 an E-sport? what kind of question is that? how about making the game half decent first...
I wasn't expecting much from him when I started reading the interview.. Browder and Kim are the ones who actually have to answer about HoTS's direction.
On November 19 2012 19:52 Dodgin wrote: I think the most interesting thing I picked up from this is that they do read TL, and they weigh the posts/opinions here equally to bnet forums or even more than bnet forums in some cases.
I imagine they took a look at the thread about infestor changes with the polls and thought about some of the suggestions, makes it feel like discussing the game here is worth it and we're not being ignored by blizzard.
We've known this for years. This question continually comes up in interviews and Blizzard has always said that they read fansites and take into account what's said.
Yet both mods and posters here seem completely oblivious to this fact. Whenever you make a suggestion or a criticism about the game here, you get hounded by posters and locked by mods who demand that you move it to the B.net forums, because that's apparently where Blizzard reads.
No. Hopefully, you'll all get a clue now. They read TL.
On November 19 2012 19:52 Dodgin wrote: I think the most interesting thing I picked up from this is that they do read TL, and they weigh the posts/opinions here equally to bnet forums or even more than bnet forums in some cases.
I imagine they took a look at the thread about infestor changes with the polls and thought about some of the suggestions, makes it feel like discussing the game here is worth it and we're not being ignored by blizzard.
We've known this for years. This question continually comes up in interviews and Blizzard has always said that they read fansites and take into account what's said.
Yet both mods and posters here seem completely oblivious to this fact. Whenever you make a suggestion or a criticism about the game here, you get hounded by posters and locked by mods who demand that you move it to the B.net forums, because that's apparently where Blizzard read.
No. Hopefully, you'll all get a clue now. They read TL.
I guess you need a lesson on PR101. They would never say they don't go to TL. Either they don't go, or they don't care.. because this forum (as well as many other medias, like Reddit) has expressed with very good arguments the numerous flaws about SC2, and we have not been given any good answers to them.
The campaign is incredible. I think it’s our best campaign ever. The cinematics team outdid themselves. I can’t wait to share the work that they’re doing.
On November 19 2012 19:29 endy wrote: I saw him quickly at the Blizz merchandise store, accompanied by his bodyguards. I don't know why, but he didn't look happy at all.
If i was him after Day1 it'd be more than just unhappy as well.
Nice read, still the responses from the likes of Diamond make me think if that's really all there is to.
On November 19 2012 19:52 Dodgin wrote: I think the most interesting thing I picked up from this is that they do read TL, and they weigh the posts/opinions here equally to bnet forums or even more than bnet forums in some cases.
I imagine they took a look at the thread about infestor changes with the polls and thought about some of the suggestions, makes it feel like discussing the game here is worth it and we're not being ignored by blizzard.
We've known this for years. This question continually comes up in interviews and Blizzard has always said that they read fansites and take into account what's said.
Yet both mods and posters here seem completely oblivious to this fact. Whenever you make a suggestion or a criticism about the game here, you get hounded by posters and locked by mods who demand that you move it to the B.net forums, because that's apparently where Blizzard read.
No. Hopefully, you'll all get a clue now. They read TL.
I guess you need a lesson on PR101. They would never say they don't go to TL. Either they don't go, or they don't care.. because this forum (as well as many other medias, like Reddit) has expressed with very good arguments the numerous flaws about SC2, and we have not been given any good answers to them.
This is just nonsense. Based on what? All the feedback about B.net sucking mostly came from TL. Stuff like the upcoming infestor nerf also came from TL. There is nothing to suggest that they ignore fansites. Blizzard has always tried to answer what they can. If you read the WoW forums, they post a lot about posting, e.g. why they sometimes don't respond, how best to give feedback, etc. And reasons for why they don't respond can include: they haven't decided what to do, they don't want to promise anything, they want to see players debate it out, etc. It makes no sense for them to ignore fansites given how many people are on TL for SC2 and MMO-Champ for WoW. As proof that they don't ignore fansites, here's one of the WoW class designers on MMO-Champ.
The question should be why are you the last to know? Why are so many posters and mods here so oblivious to what was bleedingly obvious, often to the point of hostility?
The campaign is incredible. I think it’s our best campaign ever. The cinematics team outdid themselves. I can’t wait to share the work that they’re doing.
This got me excited.
He's not gonna go "well that campaign thing is alright but i think you'll be way more excited for the special hats you can unlock for marines now" or something :p
Bronze league! That is just where I want my Blizzard CEOs, to busy making games to play SC2.
I also like the comments about reacting to other games and their features. In this generation of tech, there is to much chasing the other guy's success, rather than trying to generate their own. Everyone wasted so much money trying to make their own Facebook, Iphone, WoW, CoD and no one was every able catch them. I would rather companies do their own thing than try to chase other games newest feature.
The campaign is incredible. I think it’s our best campaign ever. The cinematics team outdid themselves. I can’t wait to share the work that they’re doing.
This got me excited.
He's not gonna go "well that campaign thing is alright but i think you'll be way more excited for the special hats you can unlock for marines now" or something :p
I want hats for my marines! Or a skin that makes them look like sweet 80s Rambo. If I could use the Ire Chef skin for my zealots, I would.
The campaign is incredible. I think it’s our best campaign ever. The cinematics team outdid themselves. I can’t wait to share the work that they’re doing.
This got me excited.
He's not gonna go "well that campaign thing is alright but i think you'll be way more excited for the special hats you can unlock for marines now" or something :p
I want hats for my marines! Or a skin that makes them look like sweet 80s Rambo. If I could use the Ire Chef skin for my zealots, I would.
and here all i wanted were tech reactors in multiplayer... :p
Well, you may think that this is just standard PR, with not much content in it.
But, I am personally glad that MM knows just a tiny bit about the game. Like who Flash/MVP/MMA is, that he's bronze, etc... I know, here, you gamers would expect MM to know all that stuff. But he's the CEO of Blizzard, not some balance designer. You'd be surprised by how little some CEO know about what's not directly related to the product they sell.
Oh, and the campaign thing about HotS makes me all giddy =)
"Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
On November 19 2012 19:52 Dodgin wrote: I think the most interesting thing I picked up from this is that they do read TL, and they weigh the posts/opinions here equally to bnet forums or even more than bnet forums in some cases.
I imagine they took a look at the thread about infestor changes with the polls and thought about some of the suggestions, makes it feel like discussing the game here is worth it and we're not being ignored by blizzard.
We've known this for years. This question continually comes up in interviews and Blizzard has always said that they read fansites and take into account what's said.
Yet both mods and posters here seem completely oblivious to this fact. Whenever you make a suggestion or a criticism about the game here, you get hounded by posters and locked by mods who demand that you move it to the B.net forums, because that's apparently where Blizzard read.
No. Hopefully, you'll all get a clue now. They read TL.
I guess you need a lesson on PR101. They would never say they don't go to TL. Either they don't go, or they don't care.. because this forum (as well as many other medias, like Reddit) has expressed with very good arguments the numerous flaws about SC2, and we have not been given any good answers to them.
This is just nonsense. Based on what? All the feedback about B.net sucking mostly came from TL. Stuff like the upcoming infestor nerf also came from TL. There is nothing to suggest that they ignore fansites. Blizzard has always tried to answer what they can. If you read the WoW forums, they post a lot about posting, e.g. why they sometimes don't respond, how best to give feedback, etc. And reasons for why they don't respond can include: they haven't decided what to do, they don't want to promise anything, they want to see players debate it out, etc. It makes no sense for them to ignore fansites given how many people are on TL for SC2 and MMO-Champ for WoW. As proof that they don't ignore fansites, here's one of the WoW class designers on MMO-Champ.
The question should be why are you the last to know? Why are so many posters and mods here so oblivious to what was bleedingly obvious, often to the point of hostility?
You do realize Mike Morhaimme isn't just some random Blizzard guy right?
He is the fucking CEO of Blizzard. Not doing particularly well at his job though. But still the CEO.
On November 19 2012 19:52 Dodgin wrote: I think the most interesting thing I picked up from this is that they do read TL, and they weigh the posts/opinions here equally to bnet forums or even more than bnet forums in some cases.
I imagine they took a look at the thread about infestor changes with the polls and thought about some of the suggestions, makes it feel like discussing the game here is worth it and we're not being ignored by blizzard.
We've known this for years. This question continually comes up in interviews and Blizzard has always said that they read fansites and take into account what's said.
Yet both mods and posters here seem completely oblivious to this fact. Whenever you make a suggestion or a criticism about the game here, you get hounded by posters and locked by mods who demand that you move it to the B.net forums, because that's apparently where Blizzard read.
No. Hopefully, you'll all get a clue now. They read TL.
I guess you need a lesson on PR101. They would never say they don't go to TL. Either they don't go, or they don't care.. because this forum (as well as many other medias, like Reddit) has expressed with very good arguments the numerous flaws about SC2, and we have not been given any good answers to them.
This is just nonsense. Based on what? All the feedback about B.net sucking mostly came from TL. Stuff like the upcoming infestor nerf also came from TL. There is nothing to suggest that they ignore fansites. Blizzard has always tried to answer what they can. If you read the WoW forums, they post a lot about posting, e.g. why they sometimes don't respond, how best to give feedback, etc. And reasons for why they don't respond can include: they haven't decided what to do, they don't want to promise anything, they want to see players debate it out, etc. It makes no sense for them to ignore fansites given how many people are on TL for SC2 and MMO-Champ for WoW. As proof that they don't ignore fansites, here's one of the WoW class designers on MMO-Champ.
The question should be why are you the last to know? Why are so many posters and mods here so oblivious to what was bleedingly obvious, often to the point of hostility?
You do realize Mike Morhaimme isn't just some random Blizzard guy right?
He is the fucking CEO of Blizzard. Not doing particularly well at his job though. But still the CEO.
Rodrigo, SC2mx: How does Blizzard feel against other games or companies, like League of Legends for example? Do you guys think that these games are taking the public figures, or the player base from Blizzard games? Do you feel threatened as a company?
We don't feel threatened by other games, especially other good games. Like we said, I think we welcome competition. I think it will encourage us to make our games even better. I think it's great when other companies can produce popular games, so good for them.
with respect to recent comments about features from lol/dota coming to sc2, yea, its pretty much confirmed they will be doing jack all to catch up with those titles.
On November 19 2012 20:41 paralleluniverse wrote: Yet both mods and posters here seem completely oblivious to this fact. Whenever you make a suggestion or a criticism about the game here, you get hounded by posters and locked by mods who demand that you move it to the B.net forums, because that's apparently where Blizzard reads.
Nobody's saying they don't read TL. The reason posts here that are directly aimed at Blizzard aren't welcome is that it lowers the quality of discussion. Anyone could post their crazy idea for a unit or how they'd like to see the game changed, but none of those ideas are backed up by testing and most of the ideas are just bad. Besides which, they do have their own forums which they systematically monitor for things like bug reports that might be of real value.
Lol, Morhaime being a bronze terran is definitely funny. I really hope they focus on their economic model so SC2/HotS can become more competitive towards game loke LoL and Dota2
I really didn't expect much to come out from him. He's not involved in SC2 nearly enough to have any useful insight that we could actually care about. I bet he has no (or very very little) involvement in the SC2 day-to-day operations, and doubt he's even aware of balance issues, patches and whatnot. His political answers is all he can really give, don't blame him
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
On November 19 2012 20:41 paralleluniverse wrote: Yet both mods and posters here seem completely oblivious to this fact. Whenever you make a suggestion or a criticism about the game here, you get hounded by posters and locked by mods who demand that you move it to the B.net forums, because that's apparently where Blizzard reads.
Nobody's saying they don't read TL. The reason posts here that are directly aimed at Blizzard aren't welcome is that it lowers the quality of discussion. Anyone could post their crazy idea for a unit or how they'd like to see the game changed, but none of those ideas are backed up by testing and most of the ideas are just bad. Besides which, they do have their own forums which they systematically monitor for things like bug reports that might be of real value.
Threads with ideas don't get closed because the ideas are bad. They get closed because mods want you to post it on the B.net forums, which is allegedly the only place where Blizzard reads. But this continues to get proven wrong.
The irony is that the B.net forums for SC2 are virtually dead. So the only way for ideas to get traction is for a big thread on TL, which then gets linked by posters on the B.net forums. Examples include the B.net sucks threads, the unit pathing in the editor, saving the carrier, the upcoming infestor nerf, etc.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Hah, maybe some TL bias here, but I found monk's questions by far the best. Great to hear something personal about MM, rather than just more questions about how Blizzard is supporting eSports and SC2 in developing countries. Sure, we need a few questions about that, but it just went on and on. Monk's questions really got to the essence: who are you? And do you listen to us?
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
On November 19 2012 23:11 Trumpstyle wrote: Hider you got any source that free 2 play makes more money than box sales?
Never suggested that, however it's an option.
What the goal should be (for the business model of sc2) is to earn extra money out of those who devote their life to sc2. LIke I did for 1½ years. Why did I pay the same price as a casual who played the campaign for 20 hours?
WOW is great for both shareholders and customers. Sc2, however, is an inbetweener unfortunately. (Note, I still love the game and I get addicted to it very easily as I do not have ladder anxiety... But objectively it's not that good)
Blizzard goal should be to find away to get me to pay 200$+ over my lifetime as an sc2 player (or something like that), and a secondary goal should be to maximize profit from casuals.
Secondary goal is probably a lot more difficult as it requires more changes than just the business model
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
The thing is Starcraft 2 is way, way harder to make f2p and profitable via microtransactions than DotA-like games are.
That's why they're so reluctant to turn Sc2 into some f2p platform and they've mentioned this more than once. If a business model suits a game they'll gladly apply it. For example they DO consider including microtransactions into Blizzard Allstars if I'm not mistaken. Again, it makes sense and is an obvious choice for that genre.
An RTS like Starcraft 2 just doesn't lend itself to that business model nearly as much.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
I don't think you understand how much money they make from esports. Every tourney that has a prize pool over $5,000 has to split ad revenue with blizzard and big tourneys have to pay a licence fee, thats a crap ton of money right there without having to invest ANYTHING, 100% profit. In addition to that income, they generate game sales from esports. We are always hearing on this forum about someone who just picked up the game after a friend introduced them to sc2 via MLG or the like.
They make plenty of money from esports from many different sources both direct and indirect, there are a plethora of blizzard endorsed SC2 products that are sold at esports events, they are paid for the licence to use their logo's and such on them. Thats not to mention those of us who buy sc2 products because we love the game, most of us because of the esports element.
Anyone who thinks that blizzard aren't making money from esports is kidding themselves, they wouldn't focus so much on SC2 as an esport if they didn't. The better the pro scene is doing, the better the game as a whole does and the more copies they sell.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
I don't think you understand how much money they make from esports. Every tourney that has a prize pool over $5,000 has to split ad revenue with blizzard and big tourneys have to pay a licence fee, thats a crap ton of money right there without having to invest ANYTHING, 100% profit. In addition to that income, they generate game sales from esports. We are always hearing on this forum about someone who just picked up the game after a friend introduced them to sc2 via MLG or the like.
They make plenty of money from esports from many different sources both direct and indirect, there are a plethora of blizzard endorsed SC2 products that are sold at esports events, they are paid for the licence to use their logo's and such on them. Thats not to mention those of us who buy sc2 products because we love the game, most of us because of the esports element.
Anyone who thinks that blizzard aren't making money from esports is kidding themselves, they wouldn't focus so much on SC2 as an esport if they didn't. The better the pro scene is doing, the better the game as a whole does and the more copies they sell.
The problem is that you haven't looked at the numbers.
1) Any royality effect is barely noticeable on the income statement. 2) Sc2 sales dissapointed compared to the pre-release expectations.
I was actually impressed about how the latins were the ones with the questions. It's always someone from chile, mexico, or the varios questions from Brazil(including UOL) õ_o
Also I gotta love how mike is a bronze terran maybe you need to buff terran so you can get out of silver HMMM? (just kidding)
On November 20 2012 00:18 Zephirdd wrote: Also I gotta love how mike is a bronze terran maybe you need to buff terran so you can get out of silver HMMM? (just kidding)
i'm sure he is just shy to admit that he is a gm player that crushes noobs all day.
On November 19 2012 19:33 Silvanel wrote: A lot of questoions from people from Spanish/Portugese speaking countries, were they that prevelant at WCS or this is just a coincidence?
as a player i can tell you WCS is everything for us
WCG doesnt even exist in brazil anymore cause sc2 is not popular enough, counter strike was saving it for a lot of time but its over now, the only offline tournament for us is WCS, and when IEM comes here also, if someone wants to really compete their only hope is to go pro and do well in mlg, iem qualifiers etc
the qualifiers for local players in IEM were 1 for national and 3 continental, 2 almost impossible to beat as killer and fenix it gets really difficult for anyone to qualify, so yea, thats why latin people makes it so huge, wcs was the easiest to get into, the most fun and the best everything here for sure
Why is esports so weak in Latin America? I can even remember an interview where Major was asked about the Mexican Starcraft "scene" and he just says "there is no scene".
i remember the sc:bw scene beeing fairly big in latin america lots of good players
that's a dang long read. but although those are generic answers, i kinda feel like he does care about sc2 so that's a good thing lol. and i guess they really want to expand sc2 to china.
I watched this the other day I'm glad that he was able to do a press conference and confirm that we will have another BWCS next year completed at Blizzcon :D
On November 19 2012 19:33 Silvanel wrote: A lot of questoions from people from Spanish/Portugese speaking countries, were they that prevelant at WCS or this is just a coincidence?
as a player i can tell you WCS is everything for us
WCG doesnt even exist in brazil anymore cause sc2 is not popular enough, counter strike was saving it for a lot of time but its over now, the only offline tournament for us is WCS, and when IEM comes here also, if someone wants to really compete their only hope is to go pro and do well in mlg, iem qualifiers etc
the qualifiers for local players in IEM were 1 for national and 3 continental, 2 almost impossible to beat as killer and fenix it gets really difficult for anyone to qualify, so yea, thats why latin people makes it so huge, wcs was the easiest to get into, the most fun and the best everything here for sure
Why is esports so weak in Latin America? I can even remember an interview where Major was asked about the Mexican Starcraft "scene" and he just says "there is no scene".
i remember the sc:bw scene beeing fairly big in latin america lots of good players
oh oh oh I can answer that question
every other week there is a random shitstorm of drama and maphackers where nobody or nearly nobody is punished for it and if you are not a friend of the top players, you never ever ever get a chance of getting into the "scene".
Gotta give that guy props for publicly stating he's bronze. In addition, he's spot on with a lot of his view on eSports, growing the scene and taking baby steps. This guy does not have to work, he could've retired decades ago. Props for him still leading Blizzard and the WCS.
On November 19 2012 19:33 Silvanel wrote: A lot of questoions from people from Spanish/Portugese speaking countries, were they that prevelant at WCS or this is just a coincidence?
as a player i can tell you WCS is everything for us
WCG doesnt even exist in brazil anymore cause sc2 is not popular enough, counter strike was saving it for a lot of time but its over now, the only offline tournament for us is WCS, and when IEM comes here also, if someone wants to really compete their only hope is to go pro and do well in mlg, iem qualifiers etc
the qualifiers for local players in IEM were 1 for national and 3 continental, 2 almost impossible to beat as killer and fenix it gets really difficult for anyone to qualify, so yea, thats why latin people makes it so huge, wcs was the easiest to get into, the most fun and the best everything here for sure
Why is esports so weak in Latin America? I can even remember an interview where Major was asked about the Mexican Starcraft "scene" and he just says "there is no scene".
i remember the sc:bw scene beeing fairly big in latin america lots of good players
oh oh oh I can answer that question
every other week there is a random shitstorm of drama and maphackers where nobody or nearly nobody is punished for it and if you are not a friend of the top players, you never ever ever get a chance of getting into the "scene".
That's how it happens on brazil at least.
I guess it's time to send in the BOPE then
On a serious note: I at least appreciate that they send out the CEO to answer questions. Although the answers were as expected and I'm still not sure if they really read TL or just pretend to. At least we have some progamers left who post here.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Maybe because WoW is a giant game, which has a subscription fee so that new content, such as quests, dungeons, raids, etc can be constantly produced? And SC2 isn't. It's a RTS, no content is produced other than expansions and patches, and fixing up the clusterfuck that was B.net 0.2. SC2 isn't WoW, it doesn't have a subscription fee and 10 million players that require a content patch every few months, so it obviously makes less money.
Subtracting revenue from subscription doesn't give a small number (subscriptions: 226, PC and others: 314). So I suggest you stop making things up about how Blizzard works, with completely unsubstantiated statements like: "Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back."
Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles.
there definitely was a ton of focus on latin america, kind of disheartening to hear about it not doing so hot and relying on wcs, but at the same time, as someone who's not involved in the LA scene, it became tiresome after the 2nd or 3rd question relating to it. Overall good read, and while people can scream 'being politically correct!' about the topic, he's the fucking CEO, he has to be politically correct, but it's not like he was spindoctoring anything, he was telling people what he knew.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Maybe because WoW is a giant game, which has a subscription fee so that new content, such as quests, dungeons, raids, etc can be constantly produced? And SC2 isn't. It's a RTS, no content is produced other than expansions and patches, and fixing up the clusterfuck that was B.net 0.2. SC2 isn't WoW, it doesn't have a subscription fee and 10 million players that require a content patch every few months, so it obviously makes less money.
Subtracting revenue from subscription doesn't give a small number (subscriptions: 226, PC and others: 314). So I suggest you stop making things up about how Blizzard works, with completely unsubstantiated statements like: "Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back."
Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles.
Take a moment and think about what you are writing. Why is WOW a great success? Partly because of the business model. Also, I never said they should copy WOW. I said they should be inspired. They could also be inspired by COD which make a shitton of money. But they should optimize the business model to sc2, and the current business model is not optimized.
Again regarding the financial statement. Think about what you are reading. Maybe D3 had an impact? Look at quarters prior to D3 release . Also I don't know why you look at PC revenues (as it includes COD). Or include revenue estimate from D3 in your calculations. According to my estimations Sc2 generated revenues of 1-20 millions (primarily explained by the games sold) on most quarters after the initial release.
I guess they probably make 0.5-3 million on esports on an annual basis. That is relativelye little compared to it's potential. With an improved business model they should probably have been capable of generating 40$/annual basis in revenues from the most active players/viewers on an annual basis. That is roughly equal to 40* 300 = 12 million on an annual basis extracting the purchase price of sc2.
Next time you respond, please take a moment and think about what I am actually writing. A more rational response would question the realism of whether they can succesfully "price discriminate". Like how would they do that in practice?
EDIT: "Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles."
Again this is just a bad example. A better use of the Kindle would be if the game was free, which would lead to increasing e-sports revenue.
But that business model won't be cost effective untill they find a way to succesfully monetize esports. Right now it's not succesfull, its an inbetweener.
Also I never suggested that they should charge customers directly. There are other ways to monetize it.
EDIT 2:
Another thing. Don't use SEC-filings if you want to analyze Blizzard's revenue pre D3 release (which I suspect you will). But you should use the NON-GAAP revenue measures as some of the GAAP-revenues get amortized over the rest of the year.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Hider is correct that that royalities are nothing compaired to Blizzard overall revenue. Most of the money they make and spend is on WoW and supporting it. Managing a game that large cost a lot of money, the servers do not run or take care of themselves.
Blizzard has a lot of its plate and SC2 is the smallest of its games. Diablo 3 almost doubled SC2's first year sales since release with a total of 10 million sold. That is a HUGE number for a PC exclusive and almost 50% more that SC2. Not that SC2 sold poorly, there are plenty of developers who would love those sales for any game, let alone a RTS. But Blizzard's largest problem right now is WoW. Activision is taking heat from investors due to a drop in stock. That is mostly due to sales being soft for everyone in the video game industry, but also that WoW has peaked and their investors for Blizzard to make the next big thing(aka project titan).
In short, Blizzard has money, but a lot of it is going to developing a new huge game on the scale of WoW. SC2 needs to stand on its own legs and people cannot expect Blizzard to just "hire more people" because WoW makes money. It is a horrible buisness practice to use the profit from one product to prop up another product.
And on the subjet of the micro transactions, that buisness model is only a few years old. Blizzard is likely going to wait to see how it does on the long term, rather than spend a lot of money on something people may be sick of in two years. We don't want doing what everyone else in tech does, and chase the money(i.e. Call of Duty vs Medal of Honor). They should hold off doing that stuff until they finish what they are working on right now.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Maybe because WoW is a giant game, which has a subscription fee so that new content, such as quests, dungeons, raids, etc can be constantly produced? And SC2 isn't. It's a RTS, no content is produced other than expansions and patches, and fixing up the clusterfuck that was B.net 0.2. SC2 isn't WoW, it doesn't have a subscription fee and 10 million players that require a content patch every few months, so it obviously makes less money.
Subtracting revenue from subscription doesn't give a small number (subscriptions: 226, PC and others: 314). So I suggest you stop making things up about how Blizzard works, with completely unsubstantiated statements like: "Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back."
Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles.
Take a moment and think about what you are writing. Why is WOW a great success? Partly because of the business model. Also, I never said they should copy WOW. I said they should be inspired. They could also be inspired by COD which make a shitton of money. But they should optimize the business model to sc2, and the current business model is not optimized.
Again regarding the financial statement. Think about what you are reading. Maybe D3 had an impact? Look at quarters prior to D3 release . Also I don't know why you look at PC revenues (as it includes COD). Or include revenue estimate from D3 in your calculations. According to my estimations Sc2 generated revenues of 1-20 millions (primarily explained by the games sold) on most quarters after the initial release.
I guess they probably make 0.5-3 million on esports on an annual basis. That is relativelye little compared to it's potential. With an improved business model they should probably have been capable of generating 40$/annual basis in revenues from the most active players/viewers on an annual basis. That is roughly equal to 40* 300 = 12 million on an annual basis extracting the purchase price of sc2.
Next time you respond, please take a moment and think about what I am actually writing. A more rational response would question the realism of whether they can succesfully "price discriminate". Like how would they do that in practice?
My question is do you really think that there are 300,000 people willing to pay $40 a year for SC2 to get that 12 million per year total? That's step one, I'm a huge follower of SC2, and I know a lot of people who are, but I really can't afford to be spending that much per year on it. The $50+ purchase price up front was so much for me that I needed to wait until someone bought it for me as a gift to get it, (I'm a broke college graduate who has to help with a mortgage payment/loans, every $50 counts a lot, some people laugh at that, I don't). There's in all likelihood many others like me as well who would have trouble paying $40 a year for the game. Step 2 is the implementation of price discrimination as you mentioned and that is a difficult issue, but still, lets not ignore step 1. Step 1 I say is quite important, having a strong enough market size of people willing to spend hundreds of dollars over the course of a game that HAS an upfront cost, (and thus barrier to entry, thus limiting its initial potential market penetration) is an issue.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Maybe because WoW is a giant game, which has a subscription fee so that new content, such as quests, dungeons, raids, etc can be constantly produced? And SC2 isn't. It's a RTS, no content is produced other than expansions and patches, and fixing up the clusterfuck that was B.net 0.2. SC2 isn't WoW, it doesn't have a subscription fee and 10 million players that require a content patch every few months, so it obviously makes less money.
Subtracting revenue from subscription doesn't give a small number (subscriptions: 226, PC and others: 314). So I suggest you stop making things up about how Blizzard works, with completely unsubstantiated statements like: "Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back."
Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles.
Take a moment and think about what you are writing. Why is WOW a great success? Partly because of the business model. Also, I never said they should copy WOW. I said they should be inspired. They could also be inspired by COD which make a shitton of money. But they should optimize the business model to sc2, and the current business model is not optimized.
Again regarding the financial statement. Think about what you are reading. Maybe D3 had an impact? Look at quarters prior to D3 release . Also I don't know why you look at PC revenues (as it includes COD). Or include revenue estimate from D3 in your calculations. According to my estimations Sc2 generated revenues of 1-20 millions (primarily explained by the games sold) on most quarters after the initial release.
I guess they probably make 0.5-3 million on esports on an annual basis. That is relativelye little compared to it's potential. With an improved business model they should probably have been capable of generating 40$/annual basis in revenues from the most active players/viewers on an annual basis. That is roughly equal to 40* 300 = 12 million on an annual basis extracting the purchase price of sc2.
Next time you respond, please take a moment and think about what I am actually writing. A more rational response would question the realism of whether they can succesfully "price discriminate". Like how would they do that in practice?
My question is do you really think that there are 300,000 people willing to pay $40 a year for SC2 to get that 12 million per year total? That's step one, I'm a huge follower of SC2, and I know a lot of people who are, but I really can't afford to be spending that much per year on it. The $50+ purchase price up front was so much for me that I needed to wait until someone bought it for me as a gift to get it, (I'm a broke college graduate who has to help with a mortgage payment/loans, every $50 counts a lot, some people laugh at that, I don't). There's in all likelihood many others like me as well who would have trouble paying $40 a year for the game. Step 2 is the implementation of price discrimination as you mentioned and that is a difficult issue, but still, lets not ignore step 1. Step 1 I say is quite important, having a strong enough market size of people willing to spend hundreds of dollars over the course of a game that HAS an upfront cost, (and thus barrier to entry, thus limiting its initial potential market penetration) is an issue.
1) I never actually said they should be paying $40 directly. I am talking about generating/extracting. This could be through advertising. One example. Why do people go to Teamliquid to watch streams. Why aren't popular streams incorporated into bnet 2.0? Think about what this had done for bnet 2.0. 2) Yet you are willing to buy Hots right? You spend $40 on the game, and many other do even though tey don't care about the game. That makes me think. Why not just make major patches which (like which adds 1 new units or rebalances the game somewhat) every 9thmonth/year or so. Blizzard could sell them for $10 or so. Casuals wouldn't be forced to buy it, but Blizzard could probably sell 300k (that's 3M). Obviously this should be done right, and in corporation with progamers and the tournament scene, so people have time to prepare for it. But with proper execution this would be great. Like look at COD. Besides selling 30M games a year Activision has found a way to further generate revenues by mappacks and Call of Duty (though that's cancelled now). Why can't Blizzard do the same thing?
Most likely there are 200k SC2 players who are more passionate than the 2M that paid $50 a year for COD elite.
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Maybe because WoW is a giant game, which has a subscription fee so that new content, such as quests, dungeons, raids, etc can be constantly produced? And SC2 isn't. It's a RTS, no content is produced other than expansions and patches, and fixing up the clusterfuck that was B.net 0.2. SC2 isn't WoW, it doesn't have a subscription fee and 10 million players that require a content patch every few months, so it obviously makes less money.
Subtracting revenue from subscription doesn't give a small number (subscriptions: 226, PC and others: 314). So I suggest you stop making things up about how Blizzard works, with completely unsubstantiated statements like: "Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back."
Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles.
Take a moment and think about what you are writing. Why is WOW a great success? Partly because of the business model. Also, I never said they should copy WOW. I said they should be inspired. They could also be inspired by COD which make a shitton of money. But they should optimize the business model to sc2, and the current business model is not optimized.
Again regarding the financial statement. Think about what you are reading. Maybe D3 had an impact? Look at quarters prior to D3 release . Also I don't know why you look at PC revenues (as it includes COD). Or include revenue estimate from D3 in your calculations. According to my estimations Sc2 generated revenues of 1-20 millions (primarily explained by the games sold) on most quarters after the initial release.
I guess they probably make 0.5-3 million on esports on an annual basis. That is relativelye little compared to it's potential. With an improved business model they should probably have been capable of generating 40$/annual basis in revenues from the most active players/viewers on an annual basis. That is roughly equal to 40* 300 = 12 million on an annual basis extracting the purchase price of sc2.
Next time you respond, please take a moment and think about what I am actually writing. A more rational response would question the realism of whether they can succesfully "price discriminate". Like how would they do that in practice?
To paraphrase Hider’s point, if Blizzard made more shit for SC2, we and a lot of other people would likely buy it. If even if was made more like DLC and we could buy skin packs, people would jump at the chance to buy more stuff for SC2 and extend the life of the game. By not doing this, one could argue that Blizzard is leaving money on the table.
I am sure Blizzard is aware they could take advantage of this, but they are not set up to do so right now. Unlike Riot, XboxLive ,Steam and other free to play games, they do not have a system set for these sorts of purchases at this time. Also, the rise of free to play, micro transactions and post release DLC has only become super prevalent in the last year or so. By that time, Blizzard was knee deep in HotS, releasing Diablo 3, their WoW expansion and working on Project titan.
I am sure that Blizzard will get into a more service based model between now and LotV, but they are already to deep in to HotS to change gears now. They are going to polish that off now and then move on to other thing.
My question is do you really think that there are 300,000 people willing to pay $40 a year for SC2 to get that 12 million per year total? That's step one, I'm a huge follower of SC2, and I know a lot of people who are, but I really can't afford to be spending that much per year on it. The $50+ purchase price up front was so much for me that I needed to wait until someone bought it for me as a gift to get it, (I'm a broke college graduate who has to help with a mortgage payment/loans, every $50 counts a lot, some people laugh at that, I don't). There's in all likelihood many others like me as well who would have trouble paying $40 a year for the game. Step 2 is the implementation of price discrimination as you mentioned and that is a difficult issue, but still, lets not ignore step 1. Step 1 I say is quite important, having a strong enough market size of people willing to spend hundreds of dollars over the course of a game that HAS an upfront cost, (and thus barrier to entry, thus limiting its initial potential market penetration) is an issue.
1) I never actually said they should be paying $40 directly. I am talking about generating/extracting. This could be through advertising. One example. Why do people go to Teamliquid to watch streams. Why aren't popular streams incorporated into bnet 2.0? Think about what this had done for bnet 2.0. 2) Yet you are willing to buy Hots right? You spend $40 on the game, and many other do even though tey don't care about the game. That makes me think. Why not just make major patches which (like which adds 1 new units or rebalances the game somewhat) every 9thmonth/year or so. Blizzard could sell them for $10 or so. Casuals wouldn't be forced to buy it, but Blizzard could probably sell 300k (that's 3M). Obviously this should be done right, and in corporation with progamers and the tournament scene, so people have time to prepare for it. But with proper execution this would be great. Like look at COD. Besides selling 30M games a year Activision has found a way to further generate revenues by mappacks and Call of Duty (though that's cancelled now). Why can't Blizzard do the same thing?
Most likely there are 200k SC2 players who are more passionate than the 2M that paid $50 a year for COD elite.
To paraphrase Hider’s point, if Blizzard made more shit for SC2, we and a lot of other people would likely buy it. If even if was made more like DLC and we could buy skin packs, people would jump at the chance to buy more stuff for SC2 and extend the life of the game. By not doing this, one could argue that Blizzard is leaving money on the table.
I am sure Blizzard is aware they could take advantage of this, but they are not set up to do so right now. Unlike Riot, XboxLive ,Steam and other free to play games, they do not have a system set for these sorts of purchases at this time. Also, the rise of free to play, micro transactions and post release DLC has only become super prevalent in the last year or so. By that time, Blizzard was knee deep in HotS, releasing Diablo 3, their WoW expansion and working on Project titan.
I am sure that Blizzard will get into a more service based model between now and LotV, but they are already to deep in to HotS to change gears now. They are going to polish that off now and then move on to other thing.
I really like point Morhaime made about the HotS release date. When they announced it this early all tournament organizers can plan their 2013 circuits with that date in mind so we won't see an MLG 2 days after HotS launch still played in WoL. Shows that they really care and think about the esports ecosystem.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Maybe because WoW is a giant game, which has a subscription fee so that new content, such as quests, dungeons, raids, etc can be constantly produced? And SC2 isn't. It's a RTS, no content is produced other than expansions and patches, and fixing up the clusterfuck that was B.net 0.2. SC2 isn't WoW, it doesn't have a subscription fee and 10 million players that require a content patch every few months, so it obviously makes less money.
Subtracting revenue from subscription doesn't give a small number (subscriptions: 226, PC and others: 314). So I suggest you stop making things up about how Blizzard works, with completely unsubstantiated statements like: "Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back."
Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles.
Take a moment and think about what you are writing. Why is WOW a great success? Partly because of the business model. Also, I never said they should copy WOW. I said they should be inspired. They could also be inspired by COD which make a shitton of money. But they should optimize the business model to sc2, and the current business model is not optimized.
Again regarding the financial statement. Think about what you are reading. Maybe D3 had an impact? Look at quarters prior to D3 release . Also I don't know why you look at PC revenues (as it includes COD). Or include revenue estimate from D3 in your calculations. According to my estimations Sc2 generated revenues of 1-20 millions (primarily explained by the games sold) on most quarters after the initial release.
I guess they probably make 0.5-3 million on esports on an annual basis. That is relativelye little compared to it's potential. With an improved business model they should probably have been capable of generating 40$/annual basis in revenues from the most active players/viewers on an annual basis. That is roughly equal to 40* 300 = 12 million on an annual basis extracting the purchase price of sc2.
Next time you respond, please take a moment and think about what I am actually writing. A more rational response would question the realism of whether they can succesfully "price discriminate". Like how would they do that in practice?
To paraphrase Hider’s point, if Blizzard made more shit for SC2, we and a lot of other people would likely buy it. If even if was made more like DLC and we could buy skin packs, people would jump at the chance to buy more stuff for SC2 and extend the life of the game. By not doing this, one could argue that Blizzard is leaving money on the table.
I am sure Blizzard is aware they could take advantage of this, but they are not set up to do so right now. Unlike Riot, XboxLive ,Steam and other free to play games, they do not have a system set for these sorts of purchases at this time. Also, the rise of free to play, micro transactions and post release DLC has only become super prevalent in the last year or so. By that time, Blizzard was knee deep in HotS, releasing Diablo 3, their WoW expansion and working on Project titan.
I am sure that Blizzard will get into a more service based model between now and LotV, but they are already to deep in to HotS to change gears now. They are going to polish that off now and then move on to other thing.
My question is do you really think that there are 300,000 people willing to pay $40 a year for SC2 to get that 12 million per year total? That's step one, I'm a huge follower of SC2, and I know a lot of people who are, but I really can't afford to be spending that much per year on it. The $50+ purchase price up front was so much for me that I needed to wait until someone bought it for me as a gift to get it, (I'm a broke college graduate who has to help with a mortgage payment/loans, every $50 counts a lot, some people laugh at that, I don't). There's in all likelihood many others like me as well who would have trouble paying $40 a year for the game. Step 2 is the implementation of price discrimination as you mentioned and that is a difficult issue, but still, lets not ignore step 1. Step 1 I say is quite important, having a strong enough market size of people willing to spend hundreds of dollars over the course of a game that HAS an upfront cost, (and thus barrier to entry, thus limiting its initial potential market penetration) is an issue.
1) I never actually said they should be paying $40 directly. I am talking about generating/extracting. This could be through advertising. One example. Why do people go to Teamliquid to watch streams. Why aren't popular streams incorporated into bnet 2.0? Think about what this had done for bnet 2.0. 2) Yet you are willing to buy Hots right? You spend $40 on the game, and many other do even though tey don't care about the game. That makes me think. Why not just make major patches which (like which adds 1 new units or rebalances the game somewhat) every 9thmonth/year or so. Blizzard could sell them for $10 or so. Casuals wouldn't be forced to buy it, but Blizzard could probably sell 300k (that's 3M). Obviously this should be done right, and in corporation with progamers and the tournament scene, so people have time to prepare for it. But with proper execution this would be great. Like look at COD. Besides selling 30M games a year Activision has found a way to further generate revenues by mappacks and Call of Duty (though that's cancelled now). Why can't Blizzard do the same thing?
Most likely there are 200k SC2 players who are more passionate than the 2M that paid $50 a year for COD elite.
To paraphrase Hider’s point, if Blizzard made more shit for SC2, we and a lot of other people would likely buy it. If even if was made more like DLC and we could buy skin packs, people would jump at the chance to buy more stuff for SC2 and extend the life of the game. By not doing this, one could argue that Blizzard is leaving money on the table.
I am sure Blizzard is aware they could take advantage of this, but they are not set up to do so right now. Unlike Riot, XboxLive ,Steam and other free to play games, they do not have a system set for these sorts of purchases at this time. Also, the rise of free to play, micro transactions and post release DLC has only become super prevalent in the last year or so. By that time, Blizzard was knee deep in HotS, releasing Diablo 3, their WoW expansion and working on Project titan.
I am sure that Blizzard will get into a more service based model between now and LotV, but they are already to deep in to HotS to change gears now. They are going to polish that off now and then move on to other thing.
But as long as a potential change to the business model is profitable, they can always hire more people to do it. The time they spent on titan, WOW, d3 whatever should be somewhat irrelevant in this decision.
But my biggest problem with Mike Morhaimme is the Bnet 2.0 failure. I can't think of any worse platform, both from a business perspective and a consumer perspective. It fails to make money and it fails to bring people together. I guess he is the one responsible for Bnet 2.0, and that is why I believe if shareholders/analysts paid more attention they would demand changes to management. Espeically since he directly states he has no plans to change the business model.
On November 19 2012 23:11 paralleluniverse wrote: [quote] Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Maybe because WoW is a giant game, which has a subscription fee so that new content, such as quests, dungeons, raids, etc can be constantly produced? And SC2 isn't. It's a RTS, no content is produced other than expansions and patches, and fixing up the clusterfuck that was B.net 0.2. SC2 isn't WoW, it doesn't have a subscription fee and 10 million players that require a content patch every few months, so it obviously makes less money.
Subtracting revenue from subscription doesn't give a small number (subscriptions: 226, PC and others: 314). So I suggest you stop making things up about how Blizzard works, with completely unsubstantiated statements like: "Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back."
Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles.
Take a moment and think about what you are writing. Why is WOW a great success? Partly because of the business model. Also, I never said they should copy WOW. I said they should be inspired. They could also be inspired by COD which make a shitton of money. But they should optimize the business model to sc2, and the current business model is not optimized.
Again regarding the financial statement. Think about what you are reading. Maybe D3 had an impact? Look at quarters prior to D3 release . Also I don't know why you look at PC revenues (as it includes COD). Or include revenue estimate from D3 in your calculations. According to my estimations Sc2 generated revenues of 1-20 millions (primarily explained by the games sold) on most quarters after the initial release.
I guess they probably make 0.5-3 million on esports on an annual basis. That is relativelye little compared to it's potential. With an improved business model they should probably have been capable of generating 40$/annual basis in revenues from the most active players/viewers on an annual basis. That is roughly equal to 40* 300 = 12 million on an annual basis extracting the purchase price of sc2.
Next time you respond, please take a moment and think about what I am actually writing. A more rational response would question the realism of whether they can succesfully "price discriminate". Like how would they do that in practice?
To paraphrase Hider’s point, if Blizzard made more shit for SC2, we and a lot of other people would likely buy it. If even if was made more like DLC and we could buy skin packs, people would jump at the chance to buy more stuff for SC2 and extend the life of the game. By not doing this, one could argue that Blizzard is leaving money on the table.
I am sure Blizzard is aware they could take advantage of this, but they are not set up to do so right now. Unlike Riot, XboxLive ,Steam and other free to play games, they do not have a system set for these sorts of purchases at this time. Also, the rise of free to play, micro transactions and post release DLC has only become super prevalent in the last year or so. By that time, Blizzard was knee deep in HotS, releasing Diablo 3, their WoW expansion and working on Project titan.
I am sure that Blizzard will get into a more service based model between now and LotV, but they are already to deep in to HotS to change gears now. They are going to polish that off now and then move on to other thing.
My question is do you really think that there are 300,000 people willing to pay $40 a year for SC2 to get that 12 million per year total? That's step one, I'm a huge follower of SC2, and I know a lot of people who are, but I really can't afford to be spending that much per year on it. The $50+ purchase price up front was so much for me that I needed to wait until someone bought it for me as a gift to get it, (I'm a broke college graduate who has to help with a mortgage payment/loans, every $50 counts a lot, some people laugh at that, I don't). There's in all likelihood many others like me as well who would have trouble paying $40 a year for the game. Step 2 is the implementation of price discrimination as you mentioned and that is a difficult issue, but still, lets not ignore step 1. Step 1 I say is quite important, having a strong enough market size of people willing to spend hundreds of dollars over the course of a game that HAS an upfront cost, (and thus barrier to entry, thus limiting its initial potential market penetration) is an issue.
1) I never actually said they should be paying $40 directly. I am talking about generating/extracting. This could be through advertising. One example. Why do people go to Teamliquid to watch streams. Why aren't popular streams incorporated into bnet 2.0? Think about what this had done for bnet 2.0. 2) Yet you are willing to buy Hots right? You spend $40 on the game, and many other do even though tey don't care about the game. That makes me think. Why not just make major patches which (like which adds 1 new units or rebalances the game somewhat) every 9thmonth/year or so. Blizzard could sell them for $10 or so. Casuals wouldn't be forced to buy it, but Blizzard could probably sell 300k (that's 3M). Obviously this should be done right, and in corporation with progamers and the tournament scene, so people have time to prepare for it. But with proper execution this would be great. Like look at COD. Besides selling 30M games a year Activision has found a way to further generate revenues by mappacks and Call of Duty (though that's cancelled now). Why can't Blizzard do the same thing?
Most likely there are 200k SC2 players who are more passionate than the 2M that paid $50 a year for COD elite.
To paraphrase Hider’s point, if Blizzard made more shit for SC2, we and a lot of other people would likely buy it. If even if was made more like DLC and we could buy skin packs, people would jump at the chance to buy more stuff for SC2 and extend the life of the game. By not doing this, one could argue that Blizzard is leaving money on the table.
I am sure Blizzard is aware they could take advantage of this, but they are not set up to do so right now. Unlike Riot, XboxLive ,Steam and other free to play games, they do not have a system set for these sorts of purchases at this time. Also, the rise of free to play, micro transactions and post release DLC has only become super prevalent in the last year or so. By that time, Blizzard was knee deep in HotS, releasing Diablo 3, their WoW expansion and working on Project titan.
I am sure that Blizzard will get into a more service based model between now and LotV, but they are already to deep in to HotS to change gears now. They are going to polish that off now and then move on to other thing.
But as long as a potential change to the business model is profitable, they can always hire more people to do it. The time they spent on titan, WOW, d3 whatever should be somewhat irrelevant in this decision.
But my biggest problem with Mike Morhaimme is the Bnet 2.0 failure. I can't think of any worse platform, both from a business perspective and a consumer perspective. It fails to make money and it fails to bring people together. I guess he is the one responsible for Bnet 2.0, and that is why I believe if shareholders/analysts paid more attention they would demand changes to management. Espeically since he directly states he has no plans to change the business model.
Hiring new talent hard and not something Blizzard can just do instantly. Also, employees have huge overhead, programmers do not come cheap and it takes a lot of time for them to become familiar with a new system. They are likely better off using current programmers on any project after HotS is completed, as they are the ones who are most familiar with the current code.
Battlenet 2.0 is a combined is a product of WoW and the need for Blizzard to keep the battle.net accounts under one roof. The thing is a work in progress and has some pretty awesome features, including cross game messaging(which I still use to this day with friends to play other Blizzard games). The lack of chatrooms at launch seems like a huge misstep, but most users do not with to be exposed to the masses of the internet.
In regards to the comment about micro transactions, he said that they have no plans to change their business model at this time. That is code for “Yo, we are going to release HotS and see how this free to play shit works out. We might work on it, but need to look into it further”. Free to play could be a flash in the pan, like Zynga, who was king of the world 2 years ago, but is now currently on fire and bleeding money. Blizzard is taking the long term approach as a business and not chasing the fast money that may not be there a year from now.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Maybe because WoW is a giant game, which has a subscription fee so that new content, such as quests, dungeons, raids, etc can be constantly produced? And SC2 isn't. It's a RTS, no content is produced other than expansions and patches, and fixing up the clusterfuck that was B.net 0.2. SC2 isn't WoW, it doesn't have a subscription fee and 10 million players that require a content patch every few months, so it obviously makes less money.
Subtracting revenue from subscription doesn't give a small number (subscriptions: 226, PC and others: 314). So I suggest you stop making things up about how Blizzard works, with completely unsubstantiated statements like: "Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back."
Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles.
Take a moment and think about what you are writing. Why is WOW a great success? Partly because of the business model. Also, I never said they should copy WOW. I said they should be inspired. They could also be inspired by COD which make a shitton of money. But they should optimize the business model to sc2, and the current business model is not optimized.
Again regarding the financial statement. Think about what you are reading. Maybe D3 had an impact? Look at quarters prior to D3 release . Also I don't know why you look at PC revenues (as it includes COD). Or include revenue estimate from D3 in your calculations. According to my estimations Sc2 generated revenues of 1-20 millions (primarily explained by the games sold) on most quarters after the initial release.
I guess they probably make 0.5-3 million on esports on an annual basis. That is relativelye little compared to it's potential. With an improved business model they should probably have been capable of generating 40$/annual basis in revenues from the most active players/viewers on an annual basis. That is roughly equal to 40* 300 = 12 million on an annual basis extracting the purchase price of sc2.
Next time you respond, please take a moment and think about what I am actually writing. A more rational response would question the realism of whether they can succesfully "price discriminate". Like how would they do that in practice?
To paraphrase Hider’s point, if Blizzard made more shit for SC2, we and a lot of other people would likely buy it. If even if was made more like DLC and we could buy skin packs, people would jump at the chance to buy more stuff for SC2 and extend the life of the game. By not doing this, one could argue that Blizzard is leaving money on the table.
I am sure Blizzard is aware they could take advantage of this, but they are not set up to do so right now. Unlike Riot, XboxLive ,Steam and other free to play games, they do not have a system set for these sorts of purchases at this time. Also, the rise of free to play, micro transactions and post release DLC has only become super prevalent in the last year or so. By that time, Blizzard was knee deep in HotS, releasing Diablo 3, their WoW expansion and working on Project titan.
I am sure that Blizzard will get into a more service based model between now and LotV, but they are already to deep in to HotS to change gears now. They are going to polish that off now and then move on to other thing.
My question is do you really think that there are 300,000 people willing to pay $40 a year for SC2 to get that 12 million per year total? That's step one, I'm a huge follower of SC2, and I know a lot of people who are, but I really can't afford to be spending that much per year on it. The $50+ purchase price up front was so much for me that I needed to wait until someone bought it for me as a gift to get it, (I'm a broke college graduate who has to help with a mortgage payment/loans, every $50 counts a lot, some people laugh at that, I don't). There's in all likelihood many others like me as well who would have trouble paying $40 a year for the game. Step 2 is the implementation of price discrimination as you mentioned and that is a difficult issue, but still, lets not ignore step 1. Step 1 I say is quite important, having a strong enough market size of people willing to spend hundreds of dollars over the course of a game that HAS an upfront cost, (and thus barrier to entry, thus limiting its initial potential market penetration) is an issue.
1) I never actually said they should be paying $40 directly. I am talking about generating/extracting. This could be through advertising. One example. Why do people go to Teamliquid to watch streams. Why aren't popular streams incorporated into bnet 2.0? Think about what this had done for bnet 2.0. 2) Yet you are willing to buy Hots right? You spend $40 on the game, and many other do even though tey don't care about the game. That makes me think. Why not just make major patches which (like which adds 1 new units or rebalances the game somewhat) every 9thmonth/year or so. Blizzard could sell them for $10 or so. Casuals wouldn't be forced to buy it, but Blizzard could probably sell 300k (that's 3M). Obviously this should be done right, and in corporation with progamers and the tournament scene, so people have time to prepare for it. But with proper execution this would be great. Like look at COD. Besides selling 30M games a year Activision has found a way to further generate revenues by mappacks and Call of Duty (though that's cancelled now). Why can't Blizzard do the same thing?
Most likely there are 200k SC2 players who are more passionate than the 2M that paid $50 a year for COD elite.
To paraphrase Hider’s point, if Blizzard made more shit for SC2, we and a lot of other people would likely buy it. If even if was made more like DLC and we could buy skin packs, people would jump at the chance to buy more stuff for SC2 and extend the life of the game. By not doing this, one could argue that Blizzard is leaving money on the table.
I am sure Blizzard is aware they could take advantage of this, but they are not set up to do so right now. Unlike Riot, XboxLive ,Steam and other free to play games, they do not have a system set for these sorts of purchases at this time. Also, the rise of free to play, micro transactions and post release DLC has only become super prevalent in the last year or so. By that time, Blizzard was knee deep in HotS, releasing Diablo 3, their WoW expansion and working on Project titan.
I am sure that Blizzard will get into a more service based model between now and LotV, but they are already to deep in to HotS to change gears now. They are going to polish that off now and then move on to other thing.
But as long as a potential change to the business model is profitable, they can always hire more people to do it. The time they spent on titan, WOW, d3 whatever should be somewhat irrelevant in this decision.
But my biggest problem with Mike Morhaimme is the Bnet 2.0 failure. I can't think of any worse platform, both from a business perspective and a consumer perspective. It fails to make money and it fails to bring people together. I guess he is the one responsible for Bnet 2.0, and that is why I believe if shareholders/analysts paid more attention they would demand changes to management. Espeically since he directly states he has no plans to change the business model.
Hiring new talent hard and not something Blizzard can just do instantly. Also, employees have huge overhead, programmers do not come cheap and it takes a lot of time for them to become familiar with a new system. They are likely better off using current programmers on any project after HotS is completed, as they are the ones who are most familiar with the current code.
Battlenet 2.0 is a combined is a product of WoW and the need for Blizzard to keep the battle.net accounts under one roof. The thing is a work in progress and has some pretty awesome features, including cross game messaging(which I still use to this day with friends to play other Blizzard games). The lack of chatrooms at launch seems like a huge misstep, but most users do not with to be exposed to the masses of the internet.
In regards to the comment about micro transactions, he said that they have no plans to change their business model at this time. That is code for “Yo, we are going to release HotS and see how this free to play shit works out. We might work on it, but need to look into it further”. Free to play could be a flash in the pan, like Zynga, who was king of the world 2 years ago, but is now currently on fire and bleeding money. Blizzard is taking the long term approach as a business and not chasing the fast money that may not be there a year from now.
1) Shareholder value takes potential overhead costs into account. But SV gets maximized if changes are made ASAP 2) Well sure it takes time. But I think the change to the business model will require a few new pgroammers anyway. Obviously all $12M or so annual is not going to the bottom line. The HOTS guys will also have to work on the second expansion as well. 3) I guess cross-game chatting was okay'ish? But everyhing else is pretty bad. 4) Well I felt something else regarding the comment. To me it sounded like he felt the current business model is the best one at the current time. If he was more open minded, he would have said something like this "we are always open to new changes and new ways to to improve the......."etc. Also, I am not sure what HOTS has to proove? HOTS is goanna sell 2-4 M copies. Viewers is goanna get better for a short duration, then it will decline again. What is there to see? I honestly don't see any advantages of waiting.
Rodrigo, SC2mx: How does Blizzard feel against other games or companies, like League of Legends for example? Do you guys think that these games are taking the public figures, or the player base from Blizzard games? Do you feel threatened as a company?
We don't feel threatened by other games, especially other good games. Like we said, I think we welcome competition. I think it will encourage us to make our games even better. I think it's great when other companies can produce popular games, so good for them.
with respect to recent comments about features from lol/dota coming to sc2, yea, its pretty much confirmed they will be doing jack all to catch up with those titles.
That's been in the works for a LONG time though.
They didn't plan on doing that as a reaction to LoL becoming big, they planned on doing that after witnessing the success that DotA had back in WC3.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Maybe because WoW is a giant game, which has a subscription fee so that new content, such as quests, dungeons, raids, etc can be constantly produced? And SC2 isn't. It's a RTS, no content is produced other than expansions and patches, and fixing up the clusterfuck that was B.net 0.2. SC2 isn't WoW, it doesn't have a subscription fee and 10 million players that require a content patch every few months, so it obviously makes less money.
Subtracting revenue from subscription doesn't give a small number (subscriptions: 226, PC and others: 314). So I suggest you stop making things up about how Blizzard works, with completely unsubstantiated statements like: "Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back."
Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles.
Take a moment and think about what you are writing. Why is WOW a great success? Partly because of the business model. Also, I never said they should copy WOW. I said they should be inspired. They could also be inspired by COD which make a shitton of money. But they should optimize the business model to sc2, and the current business model is not optimized.
Again regarding the financial statement. Think about what you are reading. Maybe D3 had an impact? Look at quarters prior to D3 release . Also I don't know why you look at PC revenues (as it includes COD). Or include revenue estimate from D3 in your calculations. According to my estimations Sc2 generated revenues of 1-20 millions (primarily explained by the games sold) on most quarters after the initial release.
I guess they probably make 0.5-3 million on esports on an annual basis. That is relativelye little compared to it's potential. With an improved business model they should probably have been capable of generating 40$/annual basis in revenues from the most active players/viewers on an annual basis. That is roughly equal to 40* 300 = 12 million on an annual basis extracting the purchase price of sc2.
Next time you respond, please take a moment and think about what I am actually writing. A more rational response would question the realism of whether they can succesfully "price discriminate". Like how would they do that in practice?
EDIT: "Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles."
Again this is just a bad example. A better use of the Kindle would be if the game was free, which would lead to increasing e-sports revenue.
But that business model won't be cost effective untill they find a way to succesfully monetize esports. Right now it's not succesfull, its an inbetweener.
Also I never suggested that they should charge customers directly. There are other ways to monetize it.
EDIT 2:
Another thing. Don't use SEC-filings if you want to analyze Blizzard's revenue pre D3 release (which I suspect you will). But you should use the NON-GAAP revenue measures as some of the GAAP-revenues get amortized over the rest of the year.
The reason I looked at subscription vs PC is because that's all that there was on the statement.
But hey, let's just keep making shit up without any proof.
On November 20 2012 08:01 Promethelax wrote: I like that the Bliz exec views the community sites as better than the b.net forums. It shows that they do pay at least some attention.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Maybe because WoW is a giant game, which has a subscription fee so that new content, such as quests, dungeons, raids, etc can be constantly produced? And SC2 isn't. It's a RTS, no content is produced other than expansions and patches, and fixing up the clusterfuck that was B.net 0.2. SC2 isn't WoW, it doesn't have a subscription fee and 10 million players that require a content patch every few months, so it obviously makes less money.
Subtracting revenue from subscription doesn't give a small number (subscriptions: 226, PC and others: 314). So I suggest you stop making things up about how Blizzard works, with completely unsubstantiated statements like: "Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back."
Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles.
Take a moment and think about what you are writing. Why is WOW a great success? Partly because of the business model. Also, I never said they should copy WOW. I said they should be inspired. They could also be inspired by COD which make a shitton of money. But they should optimize the business model to sc2, and the current business model is not optimized.
Again regarding the financial statement. Think about what you are reading. Maybe D3 had an impact? Look at quarters prior to D3 release . Also I don't know why you look at PC revenues (as it includes COD). Or include revenue estimate from D3 in your calculations. According to my estimations Sc2 generated revenues of 1-20 millions (primarily explained by the games sold) on most quarters after the initial release.
I guess they probably make 0.5-3 million on esports on an annual basis. That is relativelye little compared to it's potential. With an improved business model they should probably have been capable of generating 40$/annual basis in revenues from the most active players/viewers on an annual basis. That is roughly equal to 40* 300 = 12 million on an annual basis extracting the purchase price of sc2.
Next time you respond, please take a moment and think about what I am actually writing. A more rational response would question the realism of whether they can succesfully "price discriminate". Like how would they do that in practice?
EDIT: "Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles."
Again this is just a bad example. A better use of the Kindle would be if the game was free, which would lead to increasing e-sports revenue.
But that business model won't be cost effective untill they find a way to succesfully monetize esports. Right now it's not succesfull, its an inbetweener.
Also I never suggested that they should charge customers directly. There are other ways to monetize it.
EDIT 2:
Another thing. Don't use SEC-filings if you want to analyze Blizzard's revenue pre D3 release (which I suspect you will). But you should use the NON-GAAP revenue measures as some of the GAAP-revenues get amortized over the rest of the year.
The reason I looked at subscription vs PC is because that's all that there was on the statement.
But hey, let's just keep making shit up without any proof.
Again take a moment and relax. Look at Blizzards revenue (not PC revenues as it includes activision and is completelye useless in this case). Don't look at sec-filings. Go to investor relation your self. Download the earnings report (non SEC-filings). Remove non-gaap subscriber revenues from quarters pre D3 release. You'll see that the remaining revenues are pretty low.
We live in a world of limited infomration, and we have to make estimations some times. Some estimations are rough, but odds are against royalities being very high (compared to its potential).
the guys involved in the " Morhaime should be fired" debate should realize that Frank Pierce is the executive producer of SC2. If anyone's neck is on the line for SC2 not making the money that was promised to make the project financially viable 7 years ago then its Frank Pearce not Morhaime.
Those tearful clips where Mike talks about how great it was making Brood War don't mean anything.
Also, Pierce stated that they view SC2 as a 10 year eSports project. This ain't EA, these guys think long term. All this said, SC2 has made money.
Now, is it enough to cover the "opportunity cost"? When you consider what happened to invested capital in 2008 and 2009 when much of SC2's development occurred i'd say "yes" the opportunity cost was covered sufficiently.
I like that they gave us the release date of when HOTS will be out. I can't wait to start playing sc2 again when its more refreshing. The game just seems so lacking right now in terms of variety in all match ups.
On November 19 2012 19:40 Hyeon wrote: I just scanned this interview, no mention about SSL?
I talked to him briefly afterwards about it - sounds like there was a lot of miscommunication about it overall, he wanted to make sure everybody knows Blizzard is not out to kill Brood War and it really saddens him when people say so.
On November 19 2012 21:25 Hider wrote: "Well our focus right now is really on the content in Heart of the Swarm, not around what other things we can add necessarily in terms of micro-transactions or business. I think that it's much more important that we focus on making a great expansion and I think the current model is a viable model."
This is completely wrong, unfortunately. It's not really a viable profit-maximiation business model, and if shareholders/analysts paid as much attention Activision Blizzard as they do with Apple and everyone of their products, they would have demanded Mike Morhaimme to be fired immediately.
But please,
Sound like you think HotS is Blizzards only game in dev!
It's very viable model for HotS in relation to all other products being developed within Blizzard. They will sell plenty enough of the game to make it a profitable affair,
It's not like they panic over night and say "Ohhh all the plans we have for releases and business dev the coming 5-6 years must be scrapped, we MUST make HotS micro transaction!!!"
MM is probably the guy sitting safest on his post within ActivisionBlizzard. He doesn't even need to answer economy questions at the conference calls, they know that isn't his strong side. They look to him to make the great games within Blizzard that then can be monetized by ActivisionBlizzard.
Your first point is completely wrong. As someone who have spend considerable amount of time analyzing the financial statement of ATVI (probably more so than most analysts), I know what they are spending their ressources on (Titan), and unfortunately that's the problem. With the current business model ATVI has little incentive to make a esports-supportive game (as they don't make money out of it). Also Sc2 doesn't appear that much to casuals. Right now Sc2 (and HOTS) is an inbetweener and doesn't do anything particularly well.
Regarding MM. Your right, he is sitting safely and that's my entire point. Analysts/investors do not spend enough time analyzing the business model of Sc2/Wow/d3 (unfortunately). Compare this to the work they do on Apple, and you realize they analyze every single competitor. Every single product in detail etc. With ATVI, unfortunately, they are just kinda lazy/priortizes larger companies.
Eh. It's quite normal that the CFO answers "number" question. But regards to the CEO of Blizzard he should be asked questions regarding business model of each game and how they plan to respond to it. I read probably the most recent 4-5 earnings conferences call. Analysts are not asking the right questions (not just related to sc2). They ask the easy question so they can put a few numbers into their model and then go home early.
Even though Sc2 is just a veyr small part of ATVI, a rework of the sc2 business model could still increase shareholder v alue. Why is it that no single analyst yet has asked that question (which a journalist made yesterday regarding a change in the business model of Sc2).
And this is the problem. Mike Morhaimme is better as a PR guy than the business guy. Blizzard would improve shareholder value by hiring a few MBA'ers, and as a player the experience would probably be improved as well (even though I would have to pay a bit more though).
If analysts/investors spend more time studying/analyzing the company, Mike Morhaimme would be under a lot more pressure.
Milking money out of a game is good for the players and good for the game? No, it's good for shareholder's profit though.
There could be nothing worse for the game than for it to be turned into the standard free to play microtransaction model that makes DotA 2 heroes look like April's fool jokes, and locks LoL heroes behind a paywall. Or where they basically sell items that add power such as in CoD or in virtually every single MMO, under the excuse that it adds so little power that it's somehow OK.
Depends on how they do it. If ATVI just charges a higher price and doesn't offer anything besides that, your right. Bad for customers. But what I suggest is that ATVI needs to monetize esports. In return they give devote more ressources to updating the game etc. Hire progamers as developers. RIght now (despite their constant PR), Blizzard don't have an incentive to do that as they barely make any money out of esports.
Blizzard is a big, rich company, yet you act as if they cannot afford to hire pro gamers. In fact, there is absolutely no reason why hiring a pro gamer would be anymore expensive than hiring any random developer. So there's no reason to think that money is holding them back there. Blizzard makes money based on royalties for esports tournaments. How do you know that they "barely make any money out of esports"?
And even if that's true, that doesn't mean it's a bad business strategy. They may be trying to increase their market share at the expense of short term profits. This is a common strategy. For example, some game consoles are sold at a loss, the Kindle is also sold at a loss to maximize Amazon's market share.
1) Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back. Why do you think WOW has a lot more developers than sc2? My best guess is that Blizzard makes revenue estimates for Sc2 and then use x% of those revenues on developing costs. This is quite normal for business's.
2) Royalities are absolute peanuts. ATVI is a billion dollar company, how much money do you think Blizzard makes out of those tournaments on an annual basis? Barely any right... You can also look at the financial statement. Take Blizzard's revenues and subtract revenues from subscription (related to WOW). You'll notice that there barely are revenue left.
3) This is completelye another discussion, and I think you are comparing apples to oragnes to a 3rd thing. First of all market share is the wrong term for Amazon's kindle strategy. Amazon never expects to make any money out of Kindle, neither long/term nor shot-term. However, what they try to set up is an effective ecosystem. Kindle sales have syngery effects on Amazon's other revenues. Sc2 not so much. Also remember that the change in business model doesn't necessarily hurt the maket share if the game becomes cheaper to play for casuals.
But in general, the term market share is completely irrelevant in this scenario. Regarding long-term effect; the current business model is really bad for the long-term as the brand value of starcraft has signifcantly deterioated among casuals. My best guess is that sales of Sc3 will be even worse than sc2. With the current business model I am not totally convinced that a potential Sc3 will be profitable for ATVI.
Maybe because WoW is a giant game, which has a subscription fee so that new content, such as quests, dungeons, raids, etc can be constantly produced? And SC2 isn't. It's a RTS, no content is produced other than expansions and patches, and fixing up the clusterfuck that was B.net 0.2. SC2 isn't WoW, it doesn't have a subscription fee and 10 million players that require a content patch every few months, so it obviously makes less money.
Subtracting revenue from subscription doesn't give a small number (subscriptions: 226, PC and others: 314). So I suggest you stop making things up about how Blizzard works, with completely unsubstantiated statements like: "Yeh one would think that they could afford to hire more developers. However it is definitely money that is holding them back."
Like Mike Morhaime explain in this interview, free esports is good because it brings people in, which is basically the strategy of making a losses on Kindles and game consoles.
Take a moment and think about what you are writing. Why is WOW a great success? Partly because of the business model. Also, I never said they should copy WOW. I said they should be inspired. They could also be inspired by COD which make a shitton of money. But they should optimize the business model to sc2, and the current business model is not optimized.
Again regarding the financial statement. Think about what you are reading. Maybe D3 had an impact? Look at quarters prior to D3 release . Also I don't know why you look at PC revenues (as it includes COD). Or include revenue estimate from D3 in your calculations. According to my estimations Sc2 generated revenues of 1-20 millions (primarily explained by the games sold) on most quarters after the initial release.
I guess they probably make 0.5-3 million on esports on an annual basis. That is relativelye little compared to it's potential. With an improved business model they should probably have been capable of generating 40$/annual basis in revenues from the most active players/viewers on an annual basis. That is roughly equal to 40* 300 = 12 million on an annual basis extracting the purchase price of sc2.
Next time you respond, please take a moment and think about what I am actually writing. A more rational response would question the realism of whether they can succesfully "price discriminate". Like how would they do that in practice?
My question is do you really think that there are 300,000 people willing to pay $40 a year for SC2 to get that 12 million per year total? That's step one, I'm a huge follower of SC2, and I know a lot of people who are, but I really can't afford to be spending that much per year on it. The $50+ purchase price up front was so much for me that I needed to wait until someone bought it for me as a gift to get it, (I'm a broke college graduate who has to help with a mortgage payment/loans, every $50 counts a lot, some people laugh at that, I don't). There's in all likelihood many others like me as well who would have trouble paying $40 a year for the game. Step 2 is the implementation of price discrimination as you mentioned and that is a difficult issue, but still, lets not ignore step 1. Step 1 I say is quite important, having a strong enough market size of people willing to spend hundreds of dollars over the course of a game that HAS an upfront cost, (and thus barrier to entry, thus limiting its initial potential market penetration) is an issue.
I easily spent about 100 in the last year. couple gsl passes and a couple mlg passes.
On November 20 2012 15:08 heyitskez wrote: Why are people surprised MM is bronze, of course the CEO of one of the biggest gaming companies in the world doesn't have time to be good at sc2 lol.
i wonder how many people 45 and over even play on teh BNet2 Ladder ?
There is a guy who lives in the apartment building near my house who is definitely over 40 and is in Diamond. This guy hasn't had a job in 4 years and is grossly exaggerating a back injury to collect Worker's Comp.
On November 21 2012 06:17 JimmyJRaynor wrote: i wonder how many people 45 and over even play on teh BNet2 Ladder ?
There is a guy who lives in the apartment building near my house who is definitely over 40 and is in Diamond. This guy hasn't had a job in 4 years and is grossly exaggerating a back injury to collect Worker's Comp.
I'm 41, and a number of friends my age play regularly. They're all over the map in terms of both skill and the time they put into the game.
Still, it does take time to learn to play at even a gold-league level, and I'd guess that Mr. Morhaime's schedule doesn't give him much time for more than a couple games a week.
I wonder how long it takes them to bring up some kind of ATP tour system like in tennis. I think that is maybe the best way to get all tournaments of the various styles and classes together. It could also be a way to give every tournament a meaning, there could be world wide rankings and perhaps even a yearly wrap-up tournament.
And perhaps they can get the major tournaments to rethink their tourney structure.
On November 20 2012 15:08 heyitskez wrote: Why are people surprised MM is bronze, of course the CEO of one of the biggest gaming companies in the world doesn't have time to be good at sc2 lol.
as long as you know how sc2 works its impossible to be bronze
On November 20 2012 15:08 heyitskez wrote: Why are people surprised MM is bronze, of course the CEO of one of the biggest gaming companies in the world doesn't have time to be good at sc2 lol.
as long as you know how sc2 works its impossible to be bronze
There are plenty of people out there who have a basic idea of how the game works (for example, to the level of knowing how to make buildings and units) who play infrequently and never come close to getting out of bronze league.
Usually their problems center around having no clue what an efficient build is or spending lots of time thinking about each thing they want to do.
On November 21 2012 06:17 JimmyJRaynor wrote: i wonder how many people 45 and over even play on teh BNet2 Ladder ?
There is a guy who lives in the apartment building near my house who is definitely over 40 and is in Diamond. This guy hasn't had a job in 4 years and is grossly exaggerating a back injury to collect Worker's Comp.
I'm 41, and a number of friends my age play regularly. They're all over the map in terms of both skill and the time they put into the game.
Still, it does take time to learn to play at even a gold-league level, and I'd guess that Mr. Morhaime's schedule doesn't give him much time for more than a couple games a week.
It takes time to play enough games to get to gold league, even if you can play better than at a gold league level, lol. Time that he may not have.
On November 21 2012 06:17 JimmyJRaynor wrote: i wonder how many people 45 and over even play on teh BNet2 Ladder ?
There is a guy who lives in the apartment building near my house who is definitely over 40 and is in Diamond. This guy hasn't had a job in 4 years and is grossly exaggerating a back injury to collect Worker's Comp.
I'm 41, and a number of friends my age play regularly. They're all over the map in terms of both skill and the time they put into the game.
Still, it does take time to learn to play at even a gold-league level, and I'd guess that Mr. Morhaime's schedule doesn't give him much time for more than a couple games a week.
It takes time to play enough games to get to gold league, even if you can play better than at a gold league level, lol. Time that he may not have.
Good point! If you just happen not to place there to begin with.