Contradictory MRPs

I read a lot of character descriptions. As you can probably tell from my previous posts, I find that reading the descriptions helps me figure out what makes for a really good description.

But for this post I’m not going to talk about that.  Instead, I’m going to talk about what makes for a bad MRP.  There are some MRPs that seem to be deliberately bad: the ones that leave descriptions blank or worse, talk more about the person outside of the game than the character. But I’m not going to talk about those.

Other bad MRPs are ones that reflect character faults.  For instance, one could claim that an MRP saying a character is half-Quel’dorei half-Gnome or is a red dragon in human form or the like is bad, just because you think it conflicts with lore, or unduly calls attention to oneself.  The 12 foot tall draenei and the 5’6” tall night elves would fall in this category as well.

That sort of stuff doesn’t bug me as much, just because I think people can play whatever character they want. What bugs me is when the MRP demonstrates that they don’t know what the character actually is.  For instance, I once saw an MRP description where the character claimed to be slender, lithe, muscular and voluptuous.  This sort of contradiction within the MRP makes it difficult for me to form an image of the character, and also makes it difficult to RP consistently.

But it also makes me laugh.  In the interest of comedy, here are some actual quotes from MRP descriptions:

Living in the heat has left her skin rugged and tough, yet sleek and silky from the beating sun.

I’m not sure what heat and beating sun do to skin, but it’s not both.

B has a petite figure with long slender legs.

I’ve never seen a petite woman with long slender legs.

Walking like a gift from Elune herself, A has an almost divine aura.  She comes off though as being very humble…

Anyone who walks like a gift from Elune herself does not, by definition, come across as being humble.

She has…an innocent look to her face. Her eyes seem somewhat calculating…

Which is it, innocent or calculating?

She has long, bright crimson hair that loosely frames a thin face, with matching large blue eyes.

What are the large blue eyes matching?  Each other? (Okay, maybe that makes sense but it seems odd to me.)

Her build is quite slender, slender shoulders exposed from under a small, tight fitting dark leather tunic. The tunic does little to hide her body, the leather tight to her body, cut low and exposing a great deal of chest. Large, round pale breasts are quite visible beneath it for any who look down slightly.  Her flat stomach and wide hips are shown quite blatantly beneath the short tunic, her hips wide, very visible, showing more of her smooth, pale skin.

I don’t think that’s what “slender” means.

Long, flowing auburn hair sits upon this pretty young mage’s head, generally up in a bun to keep it from interfering with her spell-weaving.

Hair put up in a bun does not flow.  It’s more like a still puddle.

(Paragraph 1:) “Will not harm anything or anyone.”
(Paragraph 4:) “Piss her off enough you will get either slapped or killed.”

I pity the fool who stopped reading at paragraph one.

Her eyes held a distant, dreamy look within them, yet seemed to scan her surroundings with purpose.

Unless that purpose is to seem dreamy and distant, these don’t seem to jive.

I do want to point out that a lot of these contradictions are in MRPs that are otherwise rather creative and indicative of someone who can hold her own in RP.  If you see your own sentence or something similar in this list, figure out which your character is and try to make it consistent.

An Implicit Guarantee

I remember long ago one of the biggest insults you could throw at someone was that he or she was an Ebayer.  I don’t know if it’s still true now, but back in the days of Vanilla and Burning Crusade there was an active market on Ebay for accounts.  An account with a fully progressed toon could fetch hundreds of dollars, and even more if there were more than one toon on a given account. The high prices were a reflection of the game back then: it was a lot more difficult to level, and end-game content was far less accessible. You had attunements and a raid tier ladder that made it nearly impossible to jump into current content without having done prior content.

In any case, tagging someone as an Ebayer meant that he had no idea how to play his character, because he hadn’t gone through the rigorous process of leveling the character from scratch. It implies an incompetence that goes well beyond the ordinary; the sort of incompetence of the legendary melee hunter.  You didn’t see it that much.

Now, there’s a few things I would like to make clear before I go on.  First, I am especially glad there are many ways to enjoy the game.  I am thankful for the xp bonuses heirlooms and guild perks provide.  I like that I can get into dungeon runs or even LFR if I so choose.  If you were to ask me about all of these things individually I would agree without hesitation that they are good.

But I thought about a few things lately, and it had to do with a post I wrote long ago about LFD etiquette.  The context was in encouraging people to learn how to tank, and I noted that LFD wasn’t the place to learn how to tank.  My feeling was that when you queued for LFD under a given role, you implicitly promised anyone who would join your group that you were competent at the job for the hardest level dungeon you could receive.  LFD was a tool that allowed people to run dungeons quickly, with the expectations that came out of being with random people: everyone else would be competent and no one would have any investment in showing you how to play.

In many ways World of Warcraft itself provided the basis for that implicit assumption of competence.  The process of leveling and questing was in many ways Skinnerian in how it taught a player to play her class.  Killing ten thousand bad guys with a fire mage practically ensured that I would be minimally competent as a fire mage, even if I never read any of the sites providing theorycraft or the like.

I worry now, though, with the expansion of different areas of the game that the implicit assumption is no longer justified.  It may take a while, but you can get yourself to maximum level through mining, herbing, archaeology or pet battles, or any combination of them.  You can do this without regard for your class or your gear.  Yes, it might be a little bit more time consuming, but I would wager that a person could level from 1 to 90 using these methods only more quickly than one could level from 1 to 60 in Vanilla.

I think a huge frustration with the game is that there is no longer a safe assumption of competency.  Ask yourself: when you go into LFR how many DPS are doing more than just their class’s equivalent of auto-attacking?  When you run a heroic, isn’t there always one dps who does almost nothing?  I’m not saying these people didn’t level their characters through traditional means or that they bought their characters on Ebay.  It’s more that I think that the game has, ever since Vanilla, required less and less demonstrable competence to get to end level content.  Some of that is almost certainly good - it was great that Traxy could jump her way into ICC having not progressed through Naxx and Ulduar, and is was great that Jana could get into Dragon Soul without any Cata raid experience.

This is another thing where I think they got it mostly right in Wrath.  There was no cheating your way to 80.  You actually had to learn your character through leveling, and if you wanted to raid you had to convince someone that you knew how to do it.

But now you could get a character, level him through mining and herbing, sell the results, buy gear at 90 with the earnings, pop into LFR and let other people carry you to loot.  I’m not saying many people do that.  Rather, because you can there is less of a pressure on a person to be competent.

I think that’s a big source of the malaise I see within the game now.  I wish I knew of a way to fix it.

Some Things That Are Obvious To Me

Just a list of a few things that should be obvious but apparently are not.

One: if you have some sort of issue with my RP, my RP style, or how any of my characters are presented to the world, tell me.  Don’t blab about it to someone else and certainly don’t blab about it in public to the extent that a friend of mine (who has better taste) can hear about it and report it back to me.

Two: my characters have relationships with NPCs, my other characters, and other people that are not represented by avatars.  Jana has a father and had a mother and a sister.  Jana fell in love with a guy named Jeremiah. Saxsy and Traxy are sisters and have family.  Traxy saved Jana’s life.  And now Jana has a relationship with someone named Bronlissa for the purpose of a story. (I created a character named Bronlissa because I thought it might be fun to RP her individually.  We’ll see how that goes.)  That my characters have relationships with each other is a part of my ongoing stories and I don’t see how anyone should reasonably object to that.  (To be very snarky: yes, Bronlissa is Jana’s love interest right now.  No, that’s not because I am incapable of getting Jana a love interest represented by a player. It’s because that is what is necessary for the story I am telling.)

Three: I don’t know what will happen with the story with Bronlissa.  It is experimental.  I am experimenting with it and seeing how well it works to control two characters within a story, two characters who I think have an interesting and complex relationship.  I have some ideas for where it would go but a lot of it has depended on the people with whom I have RPed.  (For instance: that Bronlissa and Jana are a “couple” now came about entirely because of the urging of two people I was RPing with.  It was certainly something I thought possible, but it wasn’t exactly foretold.)

Four: I don’t know if the story with Bronlissa will become part of Jana’s “canon”.  Again, it is experimental. Half the RP I do now does not involve Bronlissa at all because I don’t think either the RP is suited for it or the person is right for that sort of character.  And by that I don’t just mean she stands on the outskirts and does nothing - I mean that she does not actually exist. I think parts of my story will go one way and parts another and I’m not sure how it will eventually work out.  One possibility that will certainly not become canon is that Jana becomes a demon to be with Bronlissa.  (In that incarnation, Jana would never again be seen by the rest of Azeroth).

That I should have to say these things to anyone boggles my mind.  That it would be someone within my guild who needs to be told these things further irritates me.  This is the sort of thing that causes someone to leave guilds.

Update: after a little bit of thinking about it and a retraction by the person who had informed of these things, I’m pretty sure that the person who prompted this post - someone who had disparaged my RP publicly - was not someone within my guild, but rather someone with whom I RPed briefly, using the scenario with Bronlissa, and who did not work out for reasons I won’t go into here.  Still, it was pretty agitating to think it would be someone in my guild.

Various Updates

It’s been a while since I’ve said how things have been going for me in game.  I’ve been meaning to write about it, but I just haven’t.

Right now, Jana’s the only toon I do any actual PvE content with.  If everything works right, I raid Throne of Thunder with her on Sunday and Monday nights for a total of about 5-6 hours.  We’ve gotten 6/12 down, but in the past week (and probably the next week as well) we’ve hit roadblocks because people have been unavailable.  This is the downside of not having so many people in the guild willing to raid, but it’s one I’ve learned to live with.

Throne of Thunder has been a frustrating raid experience.  A big part of it is the boss fights themselves.  We have yet to run across a boss that we could figure out how to down with less than, say, ten separate attempts; progression has been at best one boss a week (Jin’rokh _may_ have been an exception to this, as it might have just been a gear issue at first).  Some of the bosses seem to be complicated for the sake of complications.  Horridon, for instance, has four different add phases, each with different adds that do different things and require different treatment.  The top kill priority changes from position to position and the reason I don’t repeat it here is because I’m not at all certain I remember it correctly.  This is on top of all of the normal boss mechanics that everyone has to deal with.

The problem with the boss fights, as I see them, are that they are complicated but not interesting.  Once one knows what to do and how to execute it, the fight becomes relatively easy.  It’s the process of learning the complicated mechanics and priorities, not on skillful execution of basic principles.  Consider the Lich King normal fight in Wrath, one of the most complicated fights in that expansion.  That fight could be reduced to five stages, with each stage having a couple different things (e.g., defile, val’kyr) that required reaction and execution.  My experience with that fight was that, both as a tank and a dps, you had to go beyond understanding the principles of the fight and actually figure out how to do your best at executing those principles.  The principles were generally easier to get but the execution harder.  Fights in MoP seem to be the opposite; the principles seem to be very difficult to pick up, but once you do, execution is a breeze.

The real problem with Throne of Thunder, though, is the trash.  There is just too damned much of it, a lot of it serving no real purpose at all.  For some reason Blizzard has decided to give trash mobs zillions of health, so each fight instead of taking maybe fifteen seconds as it did in Wrath, now takes minutes.  There are now mini-bosses that don’t drop any loot of any sort, provide mechanics along the lines of a typical dungeon boss, and take a long time to kill.  None of it is terribly interesting, but it takes up far too much raid time to do.  I don’t mind trash if it is interesting, illustrates a boss mechanic or is relatively slight in number (hopefully all three).  But the trash in Throne of Thunder reminds me of those “fun loops” those people, who were trying to argue that Blizzard was being unethical in Warcraft, were using as the basis for their argument.  They’re not fun, they’re just pains in the asses and it’s the sort of thing that makes me nod when I hear about subscriber loss.

Note: I’m not saying that any significant amount of WoW subscriber loss is because of raid trash.  Rather, I look at the raid trash and I wonder if Blizzard has forgotten how to make something fun, which probably extends to a lot of other elements of the game.

So PvE is frustrating.  I have a few specific frustrations (one, for instance, is that the best weapon for me in ToT has spirit on it.  Why?) I feel like I’m playing very badly of late, in that I can’t execute things, lag is getting to me, and I can never get a crit when I need one.  If PvE were all I was doing, I may well have quit by now.

But I don’t.  I RP also, and here’s some updates on that.  Note that some of these stories contain more mature topics, so if you’re not interested in RP or that sort of thing, stop reading now.

My RP of late has also focused on Jana.  She’s easily my most developed character and the one with the best description, so it’s fun to play off that with new people.  One of the minor frustrations I’ve had is that a lot of her RP tends to be of the revolving door variety.  I can have a lot of fun with one RP with one person but then we never RP again for whatever reason.  I can’t quite pick it out and I’m sure it has more to do with me than with them.  There just didn’t seem to be much reason to return to the RP and it was more interesting to see how Jana works with a new person than to develop any specific RP.

I’m trying to break that cycle though, in part because I do actually want to get further than one day’s RP and in part because I want to develop Jana as a character. So one thing I’ve been experimenting with lately is what I think of as “storyteller RP”.  That’s where I, as Jana, control a couple of different characters that form the basis of the story and other people play parts within that story.  I generally control the development of the story.

The RP involves a former love of Jana’s named Bronlissa.  If you follow my deviantart page, you have some idea of who Bronlissa is.  She is an extraordinarily powerful Sayaad.  The story behind their relationship is one that I’ve always thought to be interesting.

About five and a half years ago, Jana encountered a warlock named Illadra that took an interest to her.  Jana was not at all interested in him: he was at best a two-bit warlock who thought too much of himself, was otherwise socially awkward and wasn’t that handsome either. Unfortunately for Jana, Illadra became fascinated with Jana and had the extreme luck of getting Bronlissa for a succubus when he summoned one.  Bronlissa was much more powerful than Illadra (and more powerful than Jana, even then), but was forced by the warlock spell into serving him.  Illadra ordered Bronlissa to seduce Jana and she did, very effectively, by warping her mind when Jana was sleeping and becoming able to control her memories, pain and pleasure centers.

Illadra had fun with this for a month, often forcing Bronlissa to force Jana into embarrassing situations, or just watching Bronlissa perform.  The problem for Illadra was that Bronlissa was chafing about being under the control of someone so petty minded, and that while Illadra controlled Bronlissa and Bronlissa controlled Jana, Illadra did not control Jana directly. This allowed Bronlissa to hatch a plan, one in which she would control Jana in order to kill Illadra.  A month after her introduction to Jana, Jana and Bronlissa succeeded in killing Illadra.  This freed Bronlissa, but she maintained her control over Jana.

For the next four months, Bronlissa went on a spree against warlocks, using Jana both as bait and to ensure that she could not be ensnared by a warlock’s power.  Thus her power grew and grew, while Jana’s spirit began to fade.  While Illadra was alive, Bronlissa and Jana had formed a bond as partners against a common enemy, and this bond continued even as Bronlissa maintained Jana under her thrall.  At the end of the four months, Jana was desperate and hatched a plan designed to gain her freedom back.

Jana told Bronlissa that she loved her, and she wanted to be with her for the rest of their lives.  This had the virtue of being true; perhaps Jana was suffering from Stockholm syndrome, or perhaps she just admired Bronlissa’s admitted beauty, strength, intelligence and persistence. Either way, Jana told Bronlissa that she wanted to be her partner and wanted to love her as an equal, which would mean freeing Jana from Bronlissa’s mechanisms of control.  Bronlissa was skeptical at first, but then revealed that she too was in love with Jana, something rarely experienced by a Sayaad.  She freed Jana from her control, promising to love her as an equal.

Jana then killed Bronlissa with a vicious fireball, reducing Bronlissa to ashes.  Jana would justify this bit to herself and others by claiming that she could never trust Bronlissa not to retake control and that it was the only way to ensure her independence.

Fast forward five years.  Jana has not had any relationship success in all that time.  She has been successful in other endeavors but hasn’t found a partner.  She thinks about Bronlissa a lot and has come to believe that she made a mistake when she killed her; living under her control would have been better than not having her at all.

Bronlissa, meanwhile, has done what many denizens of the Warcraft universe do when they get killed: she razzed and bided her time, bruised by Jana’s rejection and considering her next move.

The RP I’m currently working on is one in which Bronlissa makes her next move, reappearing in Jana’s life. As you might imagine, Bronlissa’s a bit peeved at Jana.  In order for the RP to work, though, Bronlissa can’t just simply want to kill Jana.  I am wavering between having her really care deep down for Jana and want some sort of reconciliation on her terms, or just wanting to torture her into a very painful submission and death.

Jana is similarly conflicted.  On the one hand, her fears were very real when she made that decision to kill Bronlissa. But as the years have gone by, Jana’s gotten lonely and no one has really measured up.  She’s come to feel a great deal of regret for what she did, and even if it were justified she recognizes that it was a pretty wicked thing to do to someone you loved.  Jana’s very conflicted and will feel that she’s about to get the punishment that is due her.

So this is where I began with this scenario, and I’ve tried it out with a few people to varying degrees of success. One problem that I have noted is that a few people just can’t abide an RP where someone else is more powerful than they are.  This is true despite the RP never getting adversarial to any extent, and the person never being put at risk of anything.  For a few people, the focus of the RP became about how to defeat Bronlissa, something I never really intended at all.  The RP is about the relationship between Bronlissa and Jana and how that develops.  At one point I thought part of the fun would be for Bronlissa to use other people to turn against Jana, but that requires a bit of depth or a bit of humility on the part of the other person, because people are naturally more sympathetic to Jana than they are to Bronlissa the demon.  (This is true despite the fact that Jana is very clearly, IMO, in the wrong in this relationship.)

Fortunately there have been a few people that have a more progressive outlook on the RP and I’ve managed to bring it along with them.  I think it’s been quite fun for me, and quite different in parts where I’m essentially telling a story rather than having an interaction with another person out there (during the times in which Jana and Bronlissa are acting and reacting to each other.  And I do have some direction where I think I can take it, though I’m not sure how far I could get with just one person and whether I can meaningfully include other people along the ride.  I hope I can.

Anyway, that’s what has been going on.  I’m looking forward to the continuation of the Bronlissa RP, because it’s been a lot of fun and I feel it will help Jana develop as a character.  As for the raiding stuff, I really hope it gets better.  Right now I have the sense that we’re one bad week away from our raid team breaking up, and that’s a bad feeling.

The Further Decline of Azeroth

After reading through a lot of my last post I realized that there was more I could do, both in response to a few comments I got and to refine some thoughts on Warcraft’s financial situation.  The following post contains a lot of irresponsible speculation and irresponsible financial wonkery so if you’re not into that sort of thing you might as well stop reading now.

The most interesting piece of financial data to me is on the fifth page of the tables accompanying this press release.  About halfway down the page is a table setting forth the “Non-GAAP Net Revenues by Segment/Platform Mix.”  If I understand this correctly, this shows the actual revenue that Blizzard received from January 1 to March 31, 2013 (as opposed revenue that was received earlier but could not be recognized until this quarter under generally accepted accounting principles, or GAAP).  

That table has a listing for “Online subscriptions”, which might be sort of a misnomer given how it is defined in a footnote: “Revenue from online subscriptions consists of revenue from all World of Warcraft products, including subscriptions, boxed products, expansion packs, licensing royalties and value-added services.  It also includes revenues from Call of Duty: Elite membershios.”

Let’s get that last part out of the way first.  Call of Duty: Elite is the online service for the Call of Duty franchise.  It was launched in November 2011.  Premium memberships sold for $49.99 a year.  As of August 2012, they sold 2.3 million premium subscriptions.  Apparently that wasn’t enough to sustain it, though, as in October 2012 Activision announced that the service would become free.

If those numbers are accurate, there’s a total of about $115 million spread throughout the 4Q 2011 through 4Q 2012 non-GAAP figures, and the amount will likely trickle out in the GAAP figures through 3Q2013.  For the non-GAAP figures it’s likely that most of this revenue would be recorded in 4Q 2011 and 1Q 2012, when most of the accounts were probably activated.

The upshot? 1Q 2013 “Online subscription” revenue is all Warcraft, but it’s not directly comparable to 1Q 2012, which may have had around $50 million in Call of Duty: Elite memberships.

With that out of the way, let’s get to the numbers.  Warcraft brought in $228 million in the first three months of 2013.

Let’s get a few things out of the way quickly.  $228 million is a lot of money.  It represents 28% of the revenue Activision Blizzard received over the three month period.  It’s only $20 million less than Activision’s entire console business (which is a damned long list). There’s no question in my mind that World of Warcraft and its customers are one of the top priorities at Activision Blizzard.

In my last post I made the prediction that there would be no further expansions for World of Warcraft.  This was based on the following assumptions:

1. The earliest Blizzard could have an expansion ready would be June or July 2014 (which follows the pattern since BC of an expansion every 22 months or so);
2. The subscriber base would continue to decline at a rate of about 433,000 per month, leaving 1.8 million subscribers as of the end of June 2014.
3. My hunch that World of Warcraft as it exists now could not be supported with about 2 million subscribers.

My understanding is that, in this part of the development cycle, the next expansion is being planned, but I highly doubt there would be anything even remotely close to playable.  Going forward with it would represent a significant expense, and a decision whether to go forward with significant development or not would likely need to be made soon.  They can’t say “Wait a year to see if things turn around”, because if they did they wouldn’t be able to make a June 2014 release.

The question posed is: does it make financial sense to green light a new World of Warcraft expansion.

Let’s get one thing clear: World of Warcraft is tremendously profitable.  It is Activision Blizzard’s cash cow and likely has been since Burning Crusade was announced (and probably earlier).  On the first page of the tables in Activision’s press release, there’s an entry for “Cost of sales - online subscriptions”, which shows a cost of $57 million.  If this category corresponds to the revenue category of the same name (and I have no idea why it wouldn’t), Activision Blizzard’s gross profit from “online subscriptions” (i.e., World of Warcraft) was a cool $171 million. This is a gross margin of 75% - for every quarter Blizzard spent on World of Warcraft maintenance, they got a dollar back.  It was also enough to cover Activision Blizzard’s entire product development cost with $46 million to spare for a pizza party for the programmers.

World of Warcraft, as it exists right now even with the reduced amount of subscribers, is the envy of practically every other gaming software maker in the world.  $684 million in gross profit is nothing to sneeze at.

The problem is not where World of Warcraft is now.  It’s where it’s going.  And for this part I have to make a few guesses, ones that I think are reasonable but also could very well be wrong.

Activision Blizzard spent $125 million on product development last quarter.  How much of it was related to World of Warcraft?  Well, here’s the first assumption: the amount spent on WoW development as a portion of total development cost was the same as the revenue received from World of Warcraft as a portion of Activision Blizzard’s total revenue (not including “Distribution”).  As of 1Q 2013 that would be 30% of $125 million, or $37.5 million.  (Over the past year, that figure has varied from a low of 11% during major console game spikes to 50%, which makes me think 30% as a general figure is reasonable.)

With that assumption, Warcraft’s total gross cost goes to $94.5 million as compared to gross revenue of $228 million.  That’s a gross margin of 58.5%, which looks good until you compare it to Activision Blizzard as a whole.  As a whole (this time using GAAP because it’s likely to provide a more accurate gross margin for the entire company), Activision Blizzard had gross revenue of $1,324 million versus gross costs (net costs minus Sales and marketing and General and administrative expenses) of $541 million, for a gross margin of 59.1%.  Thus, even though World of Warcraft earns a tremendous amount of money, right now it doesn’t earn the same return as an average Activision Blizzard game.

That, to me, is the rub.  Absent a strategic incentive to do otherwise, business folk allocate assets to things that offer the greatest return.  Right now, if you had a dollar, you’d be better off investing it in Activision Blizzard’s other properties than in World of Warcraft (although, to be fair, it’s really too close to call).  In the future, World of Warcraft is likely to become a worse investment as it continues to lose subscribers. I think the heads of Activision Blizzard can see the same thing and - again, absent some strategic incentive - would invest in something other than Warcraft.

This presents the question as to whether Activision Blizzard would have a strategic incentive to invest in World of Warcraft.  This is actually a strong possibility, I think.  Blizzard’s new MMO is, from what I can tell from the slides, scheduled for late 2014.  Under the laws of shipping date slippage, that means it might actually see the light of day as of mid-2015 (although releasing it on WoW’s 10th anniversary would be a neat thing to do).  Can World of Warcraft be maintained through then, to the point where there is still a significant userbase ready to be transitioned to the MMO.  Likely not without news of an expansion.  If there is an expansion announced or released, I bet it’s for that reason rather than for finances.  It’s more of a long term bet than a short term bet.

—

Now, for some further speculation as to the new MMO.  I believe very strongly, no matter what the execs and devs said about not making a WoW sequel, that it is based on the Warcraft IP.  At the time of the release, World of Warcraft is likely going to be on its last legs. Further, I don’t think Blizzard expects or could expect the average gamer to pay for two MMO subscriptions to Blizzard.  A lot of the potential market for the new MMO will be World of Warcraft players, both present and past.  It makes too much sense to say that the new MMO should be designed to appeal to Warcraft players and what would be more appealing than something related to Warcraft?

There is also the IP issue.  Let’s suppose the new MMO uses a completely new universe, with new mythology and new lore.  If that’s the case, Blizzard would no longer have a significant investment in the Warcraft lore, which is the very thing that made Blizzard rich in the first place.  If there were some other Warcraft game planned (even not an MMO), then this might make sense.  Blizzard without Warcraft is a company without its soul.  I just can’t picture it happening.

I could be wrong, but it really just makes too much sense for a new Blizzard MMO set to replace Warcraft to use the Warcraft IP in some way.

The Decline of Azeroth

There’s been a bit of a buzz in my Twitter feed (and rightfully so) about MMO-Champion’s recent rundown of Activision-Blizzard’s latest announcement that (among other things) World of Warcraft is down to 8.3 million subscribers.  8.3 million subs is a decline of 1.3 million from the end of 2012.  That’s roughly fourteen thousand cancelled subscriptions a day.  Extrapolating from the operative date of the press release (March 31, 2013), Warcraft is probably down to around 7.75 million subscriptions. At that rate, no one will be subscribing to World of Warcraft as of the first week of October 2014. 

That’s a scary thought.

To put it in a slightly different perspective, Warcraft was launched in November 2004.  In January 2007, it had reached 8 million subscribers. 5 days later, Burning Crusade was released.  Warcraft got its 9 millionth subscriber in July 2007.  We are now down to pre-BC levels of subscribers.

For me, the interesting bits are in the details.

Activision Blizzard has released a 12-Quarter Financial Model in the form of an Excel Spreadsheet and if you’re at all curious as to where it gets its money, that’s a good thing to check out.  (It’s available at their Quarterly Results page.)

The closest thing to revealing the revenues from World of Warcraft is on the “Rev Mix by Platform” tab.  That tab shows the revenue attributed to “Online subscriptions” for the past three years.  ”Online subscriptions” is defined as everything related to Warcraft, including some not-so-online-subscriptiony things such as expansion packs (i.e., the box you’d buy at Game Stop), licensing royalties (e.g., payments made to Activision by figurine makers) and value-added services (e.g., paid server transfers).  It also includes “Call of Duty Elite memberships”, whatever those are, thus preventing someone from simply renaming “Online subscriptions” to “World of Warcraft”.

In any case, the GAAP revenue for this “platform” for the first three months of the year was $275 million, and the non-GAAP revenue was $228 million.

What’s the difference between GAAP revenue and non-GAAP revenue?  With the caveat that I am not an accountant, here is an example that I understand to illustrate the difference.  Suppose you pay $120 on January 1 for a yearly subscription to WoW.  Since that payment was for services that were delivered over the whole of the year, the entirety of that revenue could not be recognized under GAAP in the first quarter; instead, $30 would be allocated to each quarter.  Under non-GAAP, the $120 would be recorded under the first quarter revenue because that’s when it was received.

This covers a number of different situations.  If you bought MoP, under GAAP the entire purchase price had to be split over a 12 month period because the game was sold with a promise of continuing online support.  Under non-GAAP the revenue could be recognized immediately.

We now bring you back to the land of the living.

In this case, the difference between GAAP and non-GAAP is actually interesting; $275 million in GAAP revenue is nothing to sneeze at and is the second highest quarterly total since Q2 2011.  But non-GAAP tells the problem; $228 million is barely above the low of $199 million in Q2 2012, and is in fact the second lowest in the three year period.  It seems to me that the Q1 CY2013 GAAP revenues are boosted by sales of Mists of Pandaria in September 2012, and that the non-GAAP revenues are closer to the actual revenue from the subscriber base would be.

$228 million over 8.3 million subscribers is about $27.47 per subscriber, or $9.16 per month.

What should be concerning to Blizzard and the rest of us is how far down that number is year to year.  It’s 9% lower than the year ago quarter, which isn’t entirely representative because the quarter a year ago was one year into Cataclysm.  A more appropriate comparison would be two years ago, just after Cataclysm was released.  1Q CY2013 revenue from Online subscriptions was $339 million.  Over two years that’s about a 33% decrease.

What’s the point of all this?

Well, I have been asked a few times lately what the next expansion for Warcraft would be. (Why me? No idea, I have no better idea than anyone else.)  My understanding was that Blizzard had planned two further expansions in order to get players to level 100.

After reviewing the financials, I don’t see that happening anymore.  Whatever one thinks of Mists of Pandaria artistically, the financials show the grim truth that it failed to spark significant revenue increases.  As a comparison, non-GAAP Q4 2010 revenue, when Cataclysm was released, was $544 million.  For MoP in Q3 2012, it was only $345 million. It’s hard to justify another expansion when the current one failed to grow interest in the franchise.  I think that Mists of Pandaria is the end of the road.

So what happens now?  Well, to some extent we’ve already seen it.  There’s an increasing reliance on cross-server mechanics, including the dreaded CRZ “feature” ensuring greater competition for mining nodes and extra-saucy off realm trolling with the added bonus of dismounting anyone you are carrying as a Sandstone Drake every time you switch zones.  It would not surprise me to see some low population realms be consolidated as well, but I think Blizzard is highly reluctant to do such a thing because it will be interpreted (rightly) as a death knell.  Most of the cross-realm features will allow players to play the game as intended even if a realm’s population won’t support it.

One thing I wouldn’t look for is subscription price cuts. I don’t think the majority of people are unsubscribing from Warcraft because it’s too expensive.  Rather, I think the level of new subscribers has fallen to an insubstantial number because the game seems “old” and inaccessible (consider how many separate things you have to buy to get Pandaria content), and other people are leaving because of dissatisfaction with the game itself.  Even if this were not true, though, it still doesn’t make financial sense (and at this point it would be a purely financial move).  Suppose dropping the subscription rate to $5/month would net you 2 million more subscribers.  That would cost Blizzard $22 million a month without any ancillary benefit.

In short, I expect to see more cross-realm features added, perhaps even allowing cross-realm raiding of current content.  Perhaps cross-realm auction houses will appear.  There might be other steps that I can’t anticipate that have the effect of merging servers without the death knell implications of actually merging servers.

The slides accompanying the press release mention a new MMO in development, one which has the code name “Titan” bandied about.  My bet is that once Garrosh bites the dust, practically all game development will be shifted to that MMO, which I think is very likely to be World of Warcraft 2 (with “Titan” as a reference to the Titans of lore).

edit: Fritokal made two helpful comments that I think deserve some sort of response to illustrate where my beliefs are coming from.

First, she said (forgive me if I have the gender wrong): “[T]he development cycle suggests that they’re already likely working on another expansion.” This is true, but I think that unless the subscriber loss is unexpectedly stemmed, whatever is in development will be canceled.  Expansions happen once every 22 months or so, putting the projected date for the next expansion in July 2014. Will Activision give the go on such an expansion if they expect that there will be less than 2 million subscribers left at that point?  I don’t think so - I think it’s highly likely that sometime soon, if they haven’t already done so, that significant WoW development is throwing good money after bad.

Second, she says that “devs and GMs have said there will be no WoW 2.”  I have heard this, but I think there’s enough wiggle room in what I’ve read the developers to say for it to be something set within the Warcraft Universe.  For instance, in this article Mike Morhaime says, “We’re not trying to make a WoW sequel.”  There’s a lot of wiggle room there - something within the WoW universe set, say, 100 years into the future wouldn’t necessarily qualify as a WoW sequel.  My bet is that there is so much IP associated with Warcraft that Blizzard would have to try to leverage that somehow - and without WoW, there would be nothing along that line. (As one person noted, it doesn’t preclude the MMO being a WoW prequel.)

My money is on it being Warcraft related somehow. But I could very well be wrong.

Enjoy Azeroth while it lasts.

How Not To Sell Gems

This morning I ran into another seller of gems.  We spoke for some time, talking about the gem market and how things worked.  I knew his name from looking at the gem sale list (when people undercut you, you tend to recognize their names), but he wasn’t the sort of seller who really upset me.  I mean, I get a little upset when someone undercuts me and I have to list my gem, but that’s the nature of the business.  If you can’t stand that, you may as well not sell gems, because I do that to someone else every time I list a gem.

There are some things that do make me mad, however.  Most of the time these things make me mad because I just think they’re stupid.  A lot of the time these things make me mad because they cost me gold. And a lot of these things make me mad because they are stupid, cost me gold, and cost the gem seller gold as well.

1. Listing gems for 48 hours.

This is just stupid. Most gems, if they sell, will sell within two to three hours of being listed, or sooner. Otherwise they will be undercut. This is stupid because it quadruples the listing fee for the seller, and many sellers will cancel the auction and relist anyway. What happens with the 48 hour listing, though, is it effectively sets a cap for the price for that two day period unless it sells quickly.  It prevents the market from clearing, and thus costs me gold.

2. Undercutting by more than a token amount.

This is just stupid. (Admittedly, I was stupid once.) Gems are a highly inelastic market; below some cap that I don’t really know the value, people will pay whatever the lowest price is, whether it’s 30 gold or 300 gold.  If the current market price is 200 gold, listing a gem for 100 gold won’t make it sell faster, but it will deny you the gold you could have gotten for listing it for 199 gold. This also destroys the market for the gem because of the next tactic.

One exception for this is when the price of the gem is so high that it really is beyond the cap at which you think people will seek alternatives. In my opinion, I can’t fathom people spending more than 400 gold on a gem.  On the other hand, I used to not be able to fathom people spending more than 300 gold on a gem, and I’ve since learned otherwise.  If the current gem price is well over 400 gold I will often list my gem for 400 gold. I don’t think anyone has a right to complain that a gem priced at 400 gold is too low.

3. Mindlessly undercutting low priced gems.

I used to love it when people did this in Cata, because it gave me a cheap source for red gems, which I knew would sell well. With the variety of gems desired in MoP, however, I haven’t tried this strategy, as I fear I might get a stockpile of gems I can’t sell.

What happens here is that a volume gem seller, someone who really should know better, lists ten or so gems at a token amount lower than a gem listed by someone who undercut the market by fifty percent or more.  This effectively establishes the new price as absurdly low until all of those gems sell, effectively preventing everyone from making a profit off of that gem.

The combination of two and three above leads to a tactic of mine that I might take up again, especially now that there seems to be an aggressive volume undercutter who I’ll call R.  I would bait that person by listing a gem at an absurdly low amount (e.g., 40 gold), and then when that person undercuts me robotically, buy all their gems out and list for a new price.  Since I have a whole bank tab ready for storage, I might try this as an alternative to ghost iron ore to restock my gems.  But it’s a risky strategy.

4. Failing to clear the market when the opportunity arises.

Over the past few days, I’ve noticed several gems where one person had listed several gems for a token amount below one other gem, and that those were the only gems on the market. These gems were listed for a low but reasonable price (e.g., 90g).  At that point, I don’t think there’s any excuse for a volume seller (who probably has scads of these gems lying around) to not simply buy the one gem other than theirs and reset the price to something ridiculously profitable.  I do this myself most of the time - and I sell one gem at a time.

5. Selling a gem for less than its vendor price.

This actually amuses me more than it bugs me because it really only happens with gems that I don’t sell because there’s no market for them.   But it boggles my mind that people would list Subtle Sun’s Radiances for 3g90 when they could go to the vendor and sell them without a listing fee for 4g.  (In fact, any price below 4g60 doesn’t make much sense to me because of the listing fee, although really any price below 20g doesn’t make much sense to me either.)  Of course, why anyone would cut a Subtle Sun’s Radiance boggles my mind as well, but that’s because I know from research that nobody wants them.

There may be more.  But those are the things that anger and befuddle me.  They cost me gold, and also cost the person doing them gold as well. The latter is really the thing that makes me shake my head; I don’t know why some people - who are obviously experienced with gem selling - throw away as much gold as they do.

Jana Goes Wtfpwn.

Monday night our raid team went into Throne of Thunder with the intention of finally beating the Council of Elders fight, the third fight in the instance.

Council of Elders is an interesting fight with lots of different things to keep track of.  It has four “bosses”, one from each of the major tribes. I’m not going to run down the fight here other than to say that the mechanics of the fight require you to switch targets from time to time, generally when they become “empowered”.  As of the start of the raid we did not have all too much luck with this boss, although we had started to progress.

I was looking forward to this raid week because I had gotten some new equipment.  I had gotten my 2 piece tier 15 bonus out of LFR, and I had gotten a new trinket (Wushoolay’s Final Choice) that was supposedly much better than the trinket I had before, despite losing 2 item levels.

The first part of the raid on Sunday passed without incident.  I did well, I suppose, but not extraordinarily so.  My dps was still topped by our fury warrior, who I like to think of myself as competing with.

But the Council of Elders fight changed things a bit.  At the time I didn’t think much of it as far as a fire mage fight - there is some passive splash damage available when all of the bosses are alive and in a group, but between empowers and Loas there’s so much target switching I thought the plusses and minuses would cancel out.  Our first attempt seemed to bear this out, as a 1:45 wipe had me second but still behind our fury warrior.

It was in the second attempt Jana started to shine.  There, in a 2:30 wipe, Jana did 178k dps, a full 60k dps more than the first fight.  What was the difference?  I’m not really sure.  But I was happy with the attempt and was hopeful that I could sustain it.

Then came the third attempt.

Now, I remember long ago when living bomb would spread to eight targets that there were certain trash packs where I (and, I would hope, other fire mages) could do ridiculous damage.  Things like 140k in Firelands or the like.  These were always short fights that took advantage of Combustion hitting several targets and living bomb exploding and hitting multiple targets without its now imposed limitations.  They were fun, but they weren’t really meaningful.

Council of Elders is meaningful.  And on the third attempt, Jana did 277k dps.  Here’s the World of Logs parse.

Yes, the attempt only lasted eighty seconds.  Yes, we had heroism up for half of that. No, I wouldn’t have been able to sustain that over the rest of the fight.

But still.  It was a boss fight.  It lasted for longer than a minute.

One of the frustrating or lovable things about fire mages, depending on your view of things, is that their performance can be remarkably erratic. Run through a long series of non-crits just after combustion comes off cooldown?  No way you’re doing good dps then.

But when everything lines up… well.  Something like this happens.  It’s the sort of thing that makes me happy to play a fire mage.  It’s also the sort of thing that boosts my confidence and helps me on the subsequent fights.

We downed the boss ten tries later.  My dps then was a much more pedestrian 137k, spread over 6:45.  I didn’t have another attempt quite like the third attempt.  But that was okay.  You have to appreciate those moments when they come.