Thursday, February 9, 2012

10% of WoW Subscribers Are Annual Pass Customers

Headlines about today's earnings call by Blizzard have focused on the top number for World of Warcraft - the game lost "only" 100K subscribers, for a total of 1.8 million over 2011, ending the year at 10.2 million.  The figure that I find more interesting is the annual pass statistic.  "More than one million" annual passes have been sold "in the west". 

That's 10% of the overall subscriber base, and a larger portion of the Western market.  If, to put a completely made-up number next to a real one, half of WoW players are in Asia, the "over 1 million" could be 20+% of the Western playerbase.  This fake number happens to be just about the result I saw when I polled my readers to examine how polarizing the Blizzcon announcements were - 32% though Blizzard was jumping the shark, while 21% (including myself) had signed up for the annual pass.  

A few implications:
  • Us bloggers have referred to 2011 as a bad year for World of Warcraft.  The reality is that there is maybe a single MMO in the world right now that has more month-to-month subscribers than Blizzard has ANNUAL subscribers, to say nothing of the other 80%.
  • It's easy to be cynical and write that this whole thing was a trap to make sure that people are "paying, even if they weren't playing".  Perhaps some of the same people who pay hundred dollar price tags for free to play lottery boxes literally snapped this thing up as an impulse buy for the bonuses.  Even so, we're likely looking at hundreds of thousands of players who picked this thing up because they thought they would be in WoW for the long haul.  I'd be very curious whether other games have anywhere near 10% of their players signing on to even six-month commitments.  
  • With the promotion, possibly one million accounts will never purchase the $60 DIII box.  (I say possibly because you can in principle purchase separate annual passes for multiple WoW accounts attached to the same account.)  Blizzard may come out ahead on that deal in the long run, but I'm definitely curious whether it will put a dent in the game's launch sales/revenue.  
  • With the same caveat as above, possibly one million accounts will be invited to the Pandaria beta.  Thanks to SWTOR, a million beta players isn't entirely unprecedented, and not all may go to the trouble of participating, but I'm curious how the logistics (e.g. number of servers) will work. 
In the long run, the real implication may be that large numbers of players are experiencing the game as something that they don't really pay for by the month anymore.  My experience has been that the game is actually more fun if you play it when you feel like playing it, instead of trying to cram all the grind into as few monthly fees as possible.  Blizzard's increased focus on weekly, monthly, and annual holiday events over daily requirements seems to support that approach as well. 

The question, then, is how many annual passes there will be this time next year.   Will players grow accustomed to this model and stay subscribed?  Will Blizzard not be able to find a carrot as enticing as Diablo III to get players to sign up for another year, and then have trouble retaining them on the old, pricey month-to-month basis?  Will the proportion of players on long-term plans increase as more casual players and those who disagree with the game's direction wander off and the die-hards remain?  Whatever happens, I'm going to be much more interested in the annual number than the monthly number in the year ahead. 


  1. I am surprised at how high the proportion of annual pass holders is. Mostly it makes me wonder how many more they would have sold if they'd reduced the price.

  2. Regarding D3 boxes, in the earnings call, Blizzard has already discounted their revenue stream by 10% to account for that. Specifically:

    Douglas Creutz - Cowen and Company, LLC, Research Division

    Another question on Warcraft. It looks like your subscription revenues, your revenues for the game, not just subscriptions, were down about 10% sequentially. And given that the subs were relatively flat, I was wondering if you can give some color around why, I guess, the ARPU was down so much.

    Thomas Tippl

    Yes. One of the factors that impact that is our Annual Pass promotion where we effectively, for the combination of products, gave a certain discount through the free delivery of Diablo and amount. So we're applying that discount on a pro rata basis across all of those products. So we've been recognizing on both Annual Pass subscribers lower market subscription run rates...

  3. Annual passes (if sufficiently discounted) are a fantastic deal if A. you're sure the game (and company) will survive a year and B. you're fairly certain you'll play it "enough" over the next year.

    Of course, defining "enough" is the hard part ;^)

  4. For myself, I got the Annual Pass specifically because I wanted to get into the MoP beta. I do not anticipate I will be playing WoW in a year from now, but I will be playing until MoP releases for sure. if MoP releases in September, I will have been on the annual pass for 10 months, will have had my beta invite and will have used that time to decide whether or not I want to play yet another expansion.

    I'll also have gotten D3 for free.

    So paying ~$30 for two months of WoW that I'm not actually using isn't so bad, considering what else I'll have gotten. But it would take huge changes in MoP for me to change my mind at the moment about continuing to pay at all, much less for another annual pass.

  5. It also makes me wonder what sort of sales they would see out of a "lifetime" sub option.

  6. Tesh: Huge I'd think, and they could price it quite high.


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