Can Blizzard survive World of Warcraft?

Blizzard released their latest subscription numbers for World of Warcraft today.

Once again this industry powerhouse has proven that their unique blend of style, production values and high quality polish are well rewarded by the market place. But I have to wonder if they will become a victim of their own success. It reminds me of Origin back in 1999 after the success of Ultima Online when the studio announced that it would forsake any further single player game development in favor of all MMP games. When I asked my project manager about the radical shift I was enlightened to the fact that UO had brought in more revenue then all single player Ultima games combined.

It is fair to say that Blizzard and its key single player franchises of Diablo, Warcraft and Starcraft are much larger retail draws then the single player Ultima games. Here are some educated guesses at the lifetime sales numbers:

Single Player Lifetime Sales	NA Unit Sales	Dollars
Diablo	6,100,000	$183,000,000
Warcraft	5,400,000	$162,000,000
Starcraft	3,900,000	$117,000,000
Total Single Player:		$462,000,000

Now those are very respectable numbers that most developers would kill for. But let’s compare them to the new kid on the block – World of Warcraft:

World of Warcraft	WW Unit Sales	Dollars
Box Revenue	1,500,000	$45,000,000
Annual Subscriptions	1,500,000	$252,000,000
Total Revenue:		$297,000,000

These numbers assume that the Asian game rooms are paying a subscription rate equal to the North American market which may or may not be the case. Also keep in mind that WoW took a larger team to build and launch then its single player siblings so let’s assume that the box revenue all goes to cover those costs.

Note that the single player revenue numbers are for the lifetime sales of those products. Blizzard games have amazing longevity on store shelves. Let’s take a look at WoW projected over four years. Here we assume that subscribers max out at the current 1.5M number and then decline steadily over time (although I don’t expect that to be the case especially with China still on the horizon).

WoW Lifetime Sales (est.)	Subscribers	Dollars
1st Year Subscription Revenue	1,500,000	$252,000,000
2nd Year Subscription Revenue	1,300,000	$218,400,000
3rd Year Subscription Revenue	1,200,000	$201,600,000
4th Year Subscription Revenue	1,000,000	$168,000,000
Total Subscriber Revenue:		$840,000,000

Now you are looking at numbers that mirror the situation back at Origin in 1999 – Revenues from WoW will eclipse those of all single player Blizzard products combined!

Will we get to play Starcraft 2 or Diablo 3? I sure hope so as they will be sequels to two of my favorite games of all time but I fear a repeat of the demise of Origin - A victim of it’s own success.