Blizzard in a Teacup: The Future of Online Gaming

I like pleasant surprises. Like the one Blizzard just gave to all Wow subscribers today. For the uninitiated, the “Remote Auction House” (a handy little app used to keep track of auctions, guild chat etc.) has now become free. This in and of itself is not particularly ground breaking news. Apps like these have been around for a while now. More and more companies are using them as a way of keeping a player invested in their IP even while away from the keyboard. Bioware has one for Mass Effect 3, Planetside 2 will have one upon release just to cite a couple of examples. Even so, this seems to be proof of something I have long suspected for a while, i.e., the direction Blizzard is taking going forward.

Chances are, if you hear the word “MMO” today, the phrase “Free to play” will inevitably show up. Enough has been said about the F2P model so I won’t add to the discussion with anything more except one little point. It’s a fairly obvious statement but it needs to be said just the same. Here goes “The only reason any game uses the F2P model is because it HAS to”. 

Publishers/developers can talk all they want about the freedom it brings and what a game changer it is or how profitable F2P is in the long term etc. but no one is willing to admit to the bitter truth:  They would all kill to be in Blizzard’s shoes right now. Because unlike everyone else, Blizzard does not have to change from the subscription model at all. 

Let’s take a look at how Blizzard does business shall we?

• This is a company that revolves round three IPs. World of Warcraft, StarCraft and Diablo. It is a tiny number compared to companies like EA, Ubisoft and their ilk.

• None of these IPs bring anything revolutionary to the gaming space (speaking in very broad terms) but rather focus on evolving and refining existing formulas regardless of genre.  And they do this very, very effectively. 

• Apart from Valve, no other developer can afford to spend the kind of time Blizzard does in polishing a game. The key word here is “afford”.

• It is also the only company on the planet that has a dedicated fan base that is heavily invested in a franchise that is over seven years old AND has always been subject to a subscription.  In other words, the vast majority of Wow’s 9 million fans are ok with the payment model.

So what am I saying? Is Blizzard too big to be affected by the changes that are being felt across the entire industry and its economy? No. Not at all. An inescapable rule of any business today is to essentially “adapt or die”. What I am saying however is this: Blizzard happens to be in the unique and extremely privileged position of actually dictating some of the changes. 

The amount of capital Blizzard has and the leverage it brings is only possible because of WoW and its subscription model.  Remember how Bobby Kotick became the most hated person in the world for saying he wanted to make CoD a subscription based game? That’s why he said it. Hell, it’s probably why Activision bought them in the first place.

Here is my take on what Blizzard will do:

• More will be done to keep players invested in the Blizzard universe. Expect to see more apps like the Remote Auction house to show up soon. Cough cough pet battles cough cough.

• Further evolution of the subscription model with F2P integration for casuals. Nobody apart rom Blizzard has any idea about what “Titan” is but I would be extremely surprised if it did not heavily incentivize subscription over F2P. For instance, subscribers get all associated apps and value added services for free, discounts on other Blizzard titles etc. This is sort of what SWOTOR is doing now anyway although their implementation is messy to say the least.

• The 15$ standard will go away. As explained in the point above, the subscription model will be made more flexible. The idea is to keep players as invested as they want to be and provide a plan that caters to their specific needs. Think cellular service providers and their various “talk time” options. So there could be 5$, 10$ or hell even 20$ plans. The idea is to have a dedicated subscriber base that guarantees income.  The core of Blizzard’s business will always be this.

• Battle.net becomes a service. This is their trump card. Instead of subscribing to a single game, the player has the option of subscribing to the entire family of Blizzard IPs for a monthly fee. Again the key to this would be flexibility and incentivization. I might not care about StarCraft but what if Blizzard gave it to me for an addition 2 bucks a month? For that price maybe also give me a comic or two reel me into the lore.  That’s a mighty juicy carrot to be waving in my face.

Obviously this is speculation on my part. But the proof is in the pudding. And as far as Blizzard is concerned, if you don’t need to change the recipe for it to sell. Just freshen it up a bit and have a bunch of falcon kicking pandas serve it.