UPDATED 11:39 EDT / NOVEMBER 16 2011

NEWS

World of Warcraft Subscriptions Plummet Ten Percent; Activision-Blizzard Triples Profits

During an investor call for Activision-Blizzard revealed some interesting news about the overall health of the massively popular massively multiplayer online game World of Warcraft.

Blizzard’s MMO lost more subscribers than previous years and has hit its all-time-low from 11.4 million in May to 10.3 million in June; whereas the Activision side has openly beaten financial estimates for the year by nearly tripling its profit for the quarter over last year. Activison-Blizzard raised over $627 million in sales, of which $148 million is pure profit.

The fall of almost 10 percent in subscribers does not look good for WoW. Posted on WoW Insider, the worldwide dip in subscription to WoW has been attributed from the company’s eastern market, according to Blizzard CEO Mike Morhaime. As the worldwide numbers continue to decline—a trend that has been seen for the MMO over the past two years—the company is seeking to revitalize their holdings with the upcoming Mists of Pandaria expansion, which will add the much-hyped Pandaren race to the game—a type of anthropomorphic pandas that have been rumored about in the game for years.

It’s not uncommon for subscription to dip during seasons preceding big expansions; this could be part of the receding tide awaiting the surge.

A majority of Activion’s revenues, according to Gamastura, came from their digital channels—specifically $386 million of the $627 million, or 62 percent. This is up 20 percent from the same period a year ago from 42 percent to 62 percent of their total revenue. World of Warcraft itself has managed to show that digital distribution of virtual items, not just video games, can make a lot of bank with the Celestial Steed that made $2 million in just four hours of sales and they continue to seek revenue from virtual items with the Winged Guardian Cub companion pet.

“As we focus on 2012, we have a strong product pipeline which features a minimum of two highly-anticipated new titles from Blizzard Entertainment, including Diablo III, and a new Call of Duty game from Activision Publishing,” said CEO Bobby Kotick in a statement.

“As a result, we expect to deliver another year of profitable growth. I believe our unyielding commitment to excellence and our creative talent around the globe will continue to position Activision Blizzard as the leader in interactive entertainment”

To further increase revenue from digital sales, games like Diablo III will include a Real-Money-Trading auction house for the virtual items in the game. For the first time, Blizzard will be allowing players to buy, sell, and trade in-game virtual items for cash. If this sort of virtual item trade economy takes off in the same fashion it does for in-game currency; it could produce a spectacular source of revenue for Blizzard and possibly even change the very nature of in-game economies for extremely large MMOs.


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