Blizzard Working on a Super Secret MMO and the Fall of World of Wacraft: Cataclysm

Bad Reviews for Cataclysm

Tons of reviews by professionals and fans alike have been pouring into the web. I have yet to see one that is positive. Couple that with fan comments on the reviews and you have a staggering situation where Blizzard / Activision might lose money on the expansion. What is shocking is that Blizzard is proud of their changes and see no reason to reconsider them.

Below is some of what a blue posted on the WOW forums.

Single Character Lockout [good only for casual gamers]

The first of the refinements being made is that we’re combining all raid sizes and difficulties into a single lockout. Unlike today, 10- and 25-player modes of a single raid will share the same lockout. You can defeat each raid boss once per week per character. In other words, if you wanted to do both a 10- and 25-person raid in a single week, you’d need to do so on two different characters. Normal versus Heroic mode will be chosen on a per-boss basis in Cataclysm raids, the same way it works in Icecrown Citadel. Obviously the raid lockout change doesn’t apply in pure Icecrown terms though, as this change goes hand-in-hand with a few other changes to raid progression in Cataclysm.

10 and 25 mans are the same

We’re designing and balancing raids so that the difficulty between 10- and 25-player versions of each difficulty will be as close as possible to each other as we can achieve. That closeness in difficulty also means that we’ll have bosses dropping the same items in 10- and 25-player raids of each difficulty. They’ll have the same name and same stats; they are in fact the exact same items.

Heroic 10 and 25 mans are the same

Choosing Heroic mode will drop a scaled-up version of those items. Our hope is that players will be able to associate bosses with their loot tables and even associate specific artwork with specific item names to a far greater extent than today.

Dungeon Difficulty and Rewards

10- and 25-player (normal difficulty) — Very similar to one another in difficulty; drop the exact same items as each other.
10- and 25-player (Heroic difficulty) — Very similar to one another in difficulty; drop more powerful versions of the normal-difficulty items.

What does all of this mean?

Casual gamers are sought after. Even to the destruction of the entire original idea of the game. So the casual gamer can log in once a week, and be in exact same spot that someone that plays 80hours in a week. They will have the same equipment. They will have the same amount of emblems. They will have everything you have and only have to log in once a week.

I could go on and on about how the casual gamer is now the focal point of the business model, but why bother.

Will People Not Buy the Expansion

After seeing all of the massive outcry and bad reviews, it is a very safe bet to say that their expansion sales expectations are going to be shattered. Yes! I do not think the core gamers will buy the expansion. People are already eyeing Star Wars Old Republic Online. I’m not! Looks awful to me.

A lot of the wow-fanboys are going crazy trying to hush up the bad reviews. They’re calling them names and saying they are whiners. But, take a step back. Professional reviewers are giving it the thumbs down? Are they whining too? Open your eyes. The expansion is horrible. Granted the company has the right to change their mind about the lore of the story, as if WOW is based on a story at all. Maybe the RPers just don’t rate high in Blizzard’s book. They have literally emasculated the lore. Fanboy answer?: it’s their story they can do whatever they want. How about a little consistency, at least.

Many fans originally played WOW because of the very nice story that Warcraft involved. It was detailed and very 3 dimensional. You felt for the characters in the story. It shocked, amazed and saddened you. It was better than a movie.

So, I’m expecting a bad show for the new expansion. Don’t hate me for saying that. I just have a very strong feeling everyone is going to be shocked.

Maybe Blizzard Doesn’t Care

It might be that Blizzard is concentrating on other projects, which are now WOW related [GASP] and hence don’t really care about their current franchise. Why would i say that?

“I wanted to take a moment to let the community know that I’ve switched roles here at Blizzard to work on our upcoming, unannounced MMO. World of Warcraft has been such a central part of my life these past six and a half years, and it’s success would not have been possible without the tremendous community around it, so I wanted to say thank you to all our players who’ve shared this amazing experience with us so far,” Kaplan said. – 2/12/09

That’s right folks, from the mouth of Jeff “Tigole” Kaplan, one of the lead designers of WOW and one of the original guildmate of head Designer Rob Pardo. That’s right folks, he is working on an unnamed MMO. Maybe, the fans that keep abreast of news like this, who then sees Cataclysm’s utter failure, see the writing on the wall. Maybe Blizzard is concentrating on their new MMO. Man cannot serve two masters.

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Recession Proof Markets: Video Games

Are People Trading Down

In the downturn of the economy, one market is still going strong. The video gaming industry.

There is a notion that consumers are trading down for their entertainment, but it just makes more economic sense to pay nearly the same price of a movie for a video game instead, which provides far more hours of entertainment.

The video game industry isn’t predicated upon the economic cycle nor the Austrian business cycle but by the video game cycle as dictated by hardware innovations.

The Video Game cycle

The top pic for console is the Nintendo WII, which has done gangbusters on their marketing, attracting grandmothers to purchase the console and play WII Fit for themselves.

Activision Blizzard is the upcoming stock to watch: they have 3 strong franchises – World of Warcraft [WoW], Guitar Hero and Call of Duty. In the next quarter they are releasing the decade long awaited heavily anticipated Starcraft II. Next year they are releasing another of their stellar franchise sequels, DIABLO III.

Let’s talk about the wars between consoles vs p.c. gaming, for a second. It mirrors the wars between investment banking vs local banking. Where investment banking did not have mass appeal like local banks, they played underhanded and moved from investment banker status, to commercial banker status and got in with the in crowd of the federal reserve. Once that happened, they then could gobble up local banks and squeeze them out of the financial market. The same is true for consoles. There wasn’t mass appeal for consoles, and consoles competed amongst themselves at first. meanwhile the p.c. had years of unchallenged gaming, with innovations driving the industry into higher directions and consumer expectations. console developers then made game designer sign exclusivity agreements to keep p.c. out of it, knowing they could not compete with p.c. technology.

The Top Player

Luckily Activision / Blizzard platform does not lend itself to console and their Warcraft franchise spanned nearly 2 decades on the p.c., once MMORPGS’s [massive multi-player online role playing game] became mainstream on the p.c. the rest is history, with the company doing $1billion monthly in revenue. In the U.S. alone they have 2.6 million monthly subscribers to WOW. Single handedly they are maintaining the p.c. still in the gaming industry. Microsoft games are releasing their console and p.c. games simultaneously, however they have yet to scratch the surface of popularity that Activision Blizzard games enjoy currently. Also, and this is just my pure opinion, Microsoft tends to shell out games with lackluster quality control nor innovation, of course greed is involved.

Unfortunately Activision / Blizzard does not pay stock dividends, nor do they offer a DRIP program [dividend reinvestment program]. You’ll have to purchase their stock either from your broker or from their Transfer Officer. There is a silver lining though. From 2001 – 2005 the stock split six times. Who knows, you might end up with 10% of the company one day.

[ I am not a stock broker, nor does anything in this article suggests that I am giving you any financial advice. Always check with a financial professional and be aware of the risks when investing. ]

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Activision to Pull Their Titles from PS3

Kotick Threatens

Bobby Kotick and a partner bought the once-struggling Activision for $440,000 in 1991, at a time when it was losing $30 million on $10 million in revenues. Now the world’s biggest independent computer games company, it has a market value of $16 billion (£10 billion) and operating profits of $179 million in the first quarter on sales of $981 million.

Activision overtook Electronic Arts last July when it was in effect taken over by Vivendi of France in a deal where Vivendi injected World of Warcraft into the company for a 56 per cent stake.

In an interview with the London Times, Activision / Blizzard CEO Bobby Kotick has some strong advice for Sony and threatened to pull its support for the console. “I’m getting concerned about Sony; the PlayStation 3 is losing a bit of momentum and they don’t make it easy for me to support the platform. It’s expensive to develop for the console, and the Wii and the Xbox are just selling better. Games generate a better return on invested capital on the Xbox than on the PlayStation,” he says. “They have to cut the price, because if they don’t, the attach rates (the number of games each console owner buys) are likely to slow,” Kotick said. “If we are being realistic, we might have to stop supporting Sony.” As for the timing on that, he adds: “When we look at 2010 and 2011, we might want to consider if we support the console–and the PSP (portable) too.”

For its part, Sony, which is mired in third place behind Nintendo and Microsoft in the next-gen game-console wars, keeps saying it won’t be pressured into trimming the price of the PS3.

Sony Dismisses Activision

Sony Corp. CEO Sir Howard Stringer responded directly–and dismissively–to Kotick’s comments. “He likes to make a lot of noise,” the Welsh-born executive told Reuters at a tech conference in Sun Valley, Idaho, which Kotick is also attending. “He’s putting pressure on me, and I’m putting pressure on him. That’s the nature of business. … [But] I lose money on every PlayStation I make–how’s that for logic?”

Speaking of the PS3, Sony Computer Entertainment America CEO Jack Tretton deflected questions that a widely rumored reduction in the console’s cost could come as early as next month. “We feel that we’re sacrificing the short term to pay dividends in the long term,” he told Silicon Valley magazine Fast Company. “People are having short-term thinking–the platform is not even three years old…. It costs a lot to invest in rolling out new technology, and if the consumer walks away before the life cycle is over–you can talk about the install base of hardware, but how many of those machines are still active, how many people are still playing them?”

“In 2008, we had a 38 percent increase in sales and we hit our 10-million-units-worldwide goal for PS3 sales,” he explained. “We had $6.4 billion in revenue in US alone on the PlayStation brand, and a 116 percent increase in software sales. At the worst possible time, if you’re hitting numbers and delivering success… my hope is that as our production efficiencies improve and more great games come to market, the horizon has got to be better for 2009 and 2010.”

Bioware Wants Attention

Now, Bioware co-founder Greg Zeschuk, has talked about the statement war, “I don’t think it’s really fair to poke fun at Sony,” Zeschuk says. “Certainly the Wii’s been a massive success and Sony’s probably not going as fast as they thought it would be but I think that they’re starting to make the right moves and the software’s coming along. I think it’s silly to be saying you’re not going to support Sony. The brand itself is still huge and there are millions of users out there.” Keep in mind bioware scared Sony witless when they threatened to not bring their title Mass Effect to the PS3. Also bioware is not in the number #1 spot for 3rd party developers as the giant Activision is.

My Take on the Situation

First of all Activision is right. Sony has priced probably 50% of the gaming market right out. The Nintendo Wii can be found for $126. The XBOX 360 can be found for $183. There is no way that at a price point of $400.00 can a PS3 even compete. For all those nay sayers, saying Activision is goofy or some other stupidity, follow the money.

Secondly developing for the platform is expensive. Again, follow the money, if the platform is far more expensive to develop for and it’s in 3rd place behind two consoles that are A) selling more and B) cheaper to develop for… It’s a no brainer.

Lastly the “too big to fail”, doesn’t apply in real business, unlike banks. People are saying that Activision would be giving up a huge platform if they didn’t support PS3 any longer. “More bang for your buck”! Ever heard of that? If they drop PS3 and target exclusively XBOX and Wii, and they get a much higher return for every development dollar? Who cares how large PS3 is, they are going to go where the money is.

I think Sony introd the market at a whopping $799.99 price point simply because their name is Playstation and they thought people would buy it regardless of the price. It is ridiculous. You could buy a car for that much, and get yourself a job delivering pizza. And, it would make you money, unlike the PS3.

I vote Activision follow through with the threat. Who’s to stop them? For all this sabre rattling, no one is taking them seriously.

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