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.
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.
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.
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.