Blizzard Talks The Business of ‘World of Warcraft,’ Subscription Rate Not Changing

Is there any stopping the behemoth that is “World of Warcraft“?

Despite the success of competitors like EA’s “Warhammer Online,” the MMORPG doesn’t seem to be slowing down. The game recently reached 11 million subscribers worldwide and opened up servers in Russia and Latin America.

Last week, during the midnight launch of the “World of Warcraft” expansion “Wrath of the Lich King,” I spoke with Blizzard CEO Mike Morhaime. We talked about the business model of Blizzard and “World of Warcraft,” and what we can expect next.

MTV Multiplayer: What’s next for “World of Warcraft”? How many more expansions do you see for the game?

Blizzard CEO Mike Morhaime: Actually, the development team has started talking and brainstorming what kind of things they’d like to put in the next expansion. We’re not ready to talk about those things of course, but I think everybody’s starting to get excited about. But at the same time, right now we’re just 100 percent focused on “Wrath of the Lich King.” I think we will continue making expansions as long as we have players that want to play “World of Warcraft” — we want to keep them entertained.

MTV Multiplayer: So you’ll possibly be making expansions forever?

Morhaime: [laughs] Well, probably not forever. But for the forseeable future, we’d like to be doing regular expansions.

MTV Multiplayer: Blizzard has said in the past that the company would like to come out with expansions once a year, but is that realistic?

Morhaime: Yes, our goal that we’ve talked about is to put out an annual expansion, but we haven’t quite been able to do that. We had one early last year and now we’re sort of late this year, but we do want to decrease the amount of time in between expansions. Although we’ll probably never get it down to a year [between each one] because there’s just so much content. We do want each expansion to be considered a big value for players.

MTV Multiplayer: Activision has had success with franchises like “Call of Duty” and “Guitar Hero” by releasing games annually. Do you look at that business model at all and wonder if that would work for Blizzard? Do you think there’s more profit in hitting the annual mark? Or do you think players need the breathing room?

Morhaime: In terms of expansions, I think a little bit more frequently is probably good with sort of the goal to get closer to an annual expansion. But I think it really depends on what content you put in the expansion. I don’t think Blizzard will ever be able to do sequels of products like a “Diablo III” or “Diablo IV” on an annual basis, but we might be able to do expansions to those games close to annually.

“I don’t think Blizzard will ever be able to do sequels of products like a ’Diablo III’ or ’Diablo IV’ on an annual basis.”

Hmmm, is there more profit? In an ideal scenario, I think we’d probably do [expansions] a little bit more often than we’ve been able to do. But I agree — I think putting too many expansions out too frequently, you probably get to the point where people do need to start taking a little break.

MTV Multiplayer: Now let’s talk about the other way around. Recently Activision stated that they’re considering a subscription fee for “Guitar Hero”’s music service GHTunes. So is Blizzard’s business model influencing Activision? Have you had conversations about it?

Morhaime: You know, we talk about all sorts of things. [laughs] That particular one isn’t something that we’ve been talking about. We’ve got a lot of very avid “Guitar Hero” players at Blizzard, including myself, so we certainly want them to make the right choices for that game, and we’ll certainly be happy to talk to them about that.

MTV Multiplayer: Is the subscription model in general still valid? Has the monthly rate ever changed for “WoW” since it launched in 2004 and do you feel like it should change?

Morhaime: The monthly rate for “WoW” in the United States has not changed, and we’re not planning any changes to it.

MTV Multiplayer: But despite the ever-changing scope of the game, the increasing amount of content and the number of subscribers you’re supporting, you still don’t think it should?

Morhaime: No, I think we’re pretty happy with our pricing in the United States. I think it feels right to us and our players.

MTV Multiplayer: Do you think that the current state of the economy will affect “WoW subscribers?

“So far we haven’t really noticed a hit from the economy, and we’re optimistic that we’ll continue going strong.”

Morhaime: At 15 bucks a month, there really isn’t a better value you can get in entertainment. If you look at other choices that you can make — like going to a movie with a date — you’ve already over your 15 dollars for two hours. I think that players really see that in terms of value for their entertainment, that this the best value that they can find right now. So far we haven’t really noticed a hit from the economy, and we’re optimistic that we’ll continue going strong, especially with the launch of “Wrath of the Lich King.”

MTV Multiplayer: Let’s pretend we’re not standing in a Best Buy. How do you feel about digital downloads of games versus retail?

Morhaime: [laughs] I think that in the future, digital is going to become more and more important but right now we love retail. Not only for us, but I think a lot of players also like to be able to come buy the box, go home, install it and be able to save the time downloading a large amount of content. I think right now it’s handy to have the disc, and I think people like having the box and everything.

MTV Multiplayer: DRM isn’t an issue for Blizzard, but it’s been an issue for other PC games. What advice do you have for other publishers? Do you think about DRM?

Morhaime: We do think about it. Well, we’ve approached DRM in the past in multiple ways, but probably the primary copy protection that we have is providing value-added features that you can only get by Battlenet.

MTV Multiplayer: Iphones are popular and a considerable force in gaming. Has Blizzard thought about developing original games for the iPhone or extensions of its existing games for it?

Morhaime: We think the iPhone is a great device. We actually are looking at ways that we can use the devices like the iPhone to allow players to stay connected to the community and different aspects of the game, but we’re looking to see what would make the most sense. But we’re not really looking, at this stage, to develop independent standalone applications for the iPhone.

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