World of WarCraft: The most successful game ever?

Blizzard’s effective strategy to grow its World of WarCraft network led to an online population that would make any developer jealous.

Blizzard Entertainment’s World of Warcraft (WoW) video game is the most popular massive multiplayer online role-playing game (MMORPG) by subscriptions, ever.  Since the game’s release in 2004, over 100 million accounts have been created, and Blizzard has been grossing roughly a billion dollars per year.  However, the game has seen its numbers dipping recently, currently with 5.6 billion subscribers, about half of what the peak was.  Although Blizzard has other more recent MMO games that have kept cash flowing into the company, if it hopes to keep WoW at the top, they must implement some of the newer tactics games have been using to greatly expand their network.

Mechanics:

World of Warcraft is a video game where you play as a fictional character of the Warcraft realm.  Gameplay consists of forming coalitions with other WoW users and performing “quests” or missions, all with the goal of developing your avatar.  Wow implements a subscription model for payment, not requiring any payment upfront, but having monthly fee of around $12 dollars.

Massive Success:

Blizzard’s WoW title saw such massive success because Blizzard understood the power of direct network effects with video games. Blizzard was adept at making key decisions about WoW that helped it drive user growth very rapidly.  Multiplayer gaming in particular exhibits key direct network characteristics, with the value of playing a game online increasing with more players.  In order for WoW to be fun for users, there needs to be a very large community, as the game revolves around interacting with the other users more so than most games.

In order to drive the user growth, Blizzard first offered the game as a subscription service instead of upfront payment, and they allowed users to play for free until they reached a certain level.  This move helped Blizzard in a few ways.  First it made joining the game very easy for consumers because the costs were low compared to the $60-70 that games generally charged upfront, and the trial period allowed consumers on the fence to first play the game in a pain free manner, and then later start paying once they had gotten hooked.  Also, because Blizzard is receiving a lot of money from its users in a steady stream, it could constantly maintain and improve the game, while creating expansion packs, making sure that the game was considered top quality by its users.  The other move that Blizzard made was to introduce the idea of forming coalitions with other gamers in order to complete these quests.  This was perhaps the most important aspect that drove growth, as gamers would be trying to get their friends to get the game and join their group.

Future:

The gaming industry however has changed dramatically over the last decade, and what was previously enough to keep huge levels of subscribers with WoW, now may no longer be enough. Perhaps the biggest challenge however is reacting to the new model of Free-to-Play (FTP) games, where playing a game is completely free for the consumer, and they can spend money instead on in-game purchases.  The benefit of the FTP model is its easy to scale up a platform’s network very fast, due to the zero upfront financial commitment.  Whether or not Blizzard can maintain WoW’s quality with a free model is unsure, but unless they come up with a way to compete with other MMORPGs that are going FTP, the numbers will continue to dip. Blizzard therefore must take action if it wants to buck the trend.  This can come in the form of changing to their own FTP model, or letting the game die but creating new titles that take place within the WarCraft realm.

 

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Student comments on World of WarCraft: The most successful game ever?

  1. Great article. Although I’ve never played WoW, but I can imagine how addictive the game could be just by hearing about it. Also, interesting take on the FTP model. This model seems to be the way of the future for many games, but I wonder if it’s necessary for Blizzard, with its huge brand equity in the gaming industry, to make such a move.

  2. The idea of letting gamers play for free until a certain level was hilarious. These games are so addicting that once you reach that point you will most probably pay. Once you are certain about a product like this one, sacrificing some initial value to get customers and get the network effects’ cycle going seems to be worth it and has worked very well for companies like Blizzard.

  3. Never played WoW, but got the chance to play other MMORPG like Diablo, and it is indeed very addicting, especially when your friends are there.
    I wonder if they can lever the huge user base they have and transform WoW into a platform with indirect network effect with other content creators to enhance the user experience in return for profits. similar to app developers on facebook.

  4. WoW’s subscriber base isn’t dipping because of the network. It’s dipping because the last few expansions have been horrendously disappointing. (I say as someone with four max-level raid-ready characters, an absurd number of achievements, and a subscription that I cancelled a few months ago). I think FTP would actually make it worse; the subscription price isn’t that expensive, and freemium models kill any sense of fairness in a game, because the people who pay more are better. They’ve done a good job at monetizing cosmetic extras- mounts, pets, armor looks that don’t affect the stats. But the second they start allowing people to pay for stat improvement in-game or to unlock content is when a lot more loyal subscribers will leave.

    I don’t think they’re losing to a network effect. I think they need to put out an expansion that’s as good as Wrath of the Lich King was, and get rid of a lot of the changes they made in Mists of Pandaria and Cataclysm. Warlords of Draenor was a good start- it had an engaging storyline and good questing/leveling content- but still fell flat at the level cap, which is where, in most players’ eyes, the game really begins.

    1. Back in the mid-2000’s an ex-boyfriend of mine sold his WoW account for tens of thousands of dollars to someone who wanted to skip to the level he had achieved. I was frankly flabbergasted to learn that this was a fairly common occurrence, but if the game is not fun to play in the early stages, then I suppose there is really no benefit to customers by offering it initially for free. While I do not have specific information on the recent expansion packs, I wonder if WoW’s issues aren’t more mundane than dwindling network effects. Is it possible that people have just moved on from this gaming trend? We sometimes talk about planned obsolescence as a strategy for hardware, but we never seem to discuss how software products should anticipate their own irrelevance over time, even though it seems a near certainty.

  5. Multiplayer gaming seems to be vital for the survival of video games, and highly leverages network effects. It is interesting to see which elements/ barriers are the most powerful in the gaming industry. Is it paying for games? Or ensuring all games are compatible on different consoles? Or ensuring that there is always a stream of individuals willing and ready to play online against you whenever you login to play, making sure the game is always different? A sufficient volume to ensure that there are always players available seems vital, but it seems like after that it doesn’t matter as much and the effect of the network will have saturated.

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