World of Warcraft (WOW) subscriptions have been falling for around a year. However, recent moves by Blizzard as well as greater trends in the industry seem to indicate that these will fall further. Lets look at the moves Blizzard has made in the last 6+ months to see what we might be able to deduce.
Presumably feeling the heat from Free-to-Play MMOs and other games, Blizzard changes from a 14-day free trial to F2P until level 20. While this move does not indicate they are losing subscribers, this indicates that they were not adding new subscribers at an acceptable level. Therefore, go F2P until 20 to fill up their new player funnel and try to get them to convert to paying subscribers.
Blizzard offers a deal for players to subscribe to WOW for one year and receive Diablo 3 (when it is released) for free as well as some other benefits. So why did they do this? WOW's subscriber base started dropping soon after Cataclysm was released. In addition, Diablo 3 keeps getting delayed. This move allowed them to retain their subscriber numbers a bit longer. It has been recognized by Blizzard itself in various post mortems (here, here and here) that the success of Cataclysm was in the 1 - 60 level revamp and that a number of things went wrong with the end game content. Well, the end game content is mostly what keeps your player base from leaving. I believe the Annual Pass was implemented to prevent losing core customers (those who play WOW and Diablo) and give them more time to get both the next WOW expansion (Mists of Pandaria) and Diablo 3 released.
This is where the rubber meets the road. You do not lay off more than 10% of your staff if nothing is wrong. Now since the vast majority of the staff layed off are not related to game development, that suggests support positions. I have heard theories that they may be outsourcing support or that more efficient technology has led to redundant staff. However, I want to offer another hypothesis. Maybe WOW logins are dropping. Maybe less people are logging in to WOW and it is only a matter of time before they cancel their subscriptions. Therefore, they don't need these support positions now because less players need less support (particularly if they end up canceling their subscription). I have no idea if I am right. However, if I am, we could see further reductions in WOW's subscription base.
Blizzard recently upgraded their Scroll of Resurrection promo which enables you to invite your friends (basically lapsed subscriptions) back to WOW for rewards. The upgraded rewards for those invited back are:
- Character boost to level 80
- Free Upgrade to Cataclysm
- 7 Free days of game time
- Free realm and character move
If the friend subscribes for 30 days, the inviter gets a special mount. This move is all about boosting subscribers, and it seems a bit desperate. It seems they are short circuiting the 1 - 60 revamp they did for Cataclysm. For me, the journey from 1 - 80 or 85 is part of the experience. Needless to say, this is another indication that not all is well with WOW.
Many have theorized why their subscriptions are falling. It ranges from Rift to SWTOR to the issues with the Cataclysm expansion. While all of these clearly had an impact, I think the biggest impact has to be from onslaught of F2P MMOs. In the past year or so, here are some of the MMOs that are or are going F2P: Everquest, Everquest II, Star Trek Online, DC Universe Online, Champions Online, City of Heroes, Aion, Lord of the Rings Online, Dungeons & Dragons Online and Age of Conan. In addition, here are some of the big MMOs (not all F2P though) that are about to be released: The Secret World, Planetside 2, Tera, Guild Wars 2, and Firefall. This onslaught of new titles and old titles going F2P is probably the primary reason for subscriber loss. Blizzard seems to be doing everything it can to sustain its subscriber base. The interesting question is, if their subscriber base keeps falling, at what point will they transition to another model like F2P?