Blizzard has finally announced their mass layoff plans for 2012. It was done through both an official News Release and as a message on the Battle.net forums.
According to their release, Blizzard's savings from the layoffs were identified in their Feb 9, 2012 (Q4 2011) financial outlook, but the exact details of the workforce reduction were not considered material or important for the shareholders call. :)
Blizzard did not identify when the business review was conducted, only that it would benefit their 2012 financials and that they are currently involved in the global reduction of their workforce which will eventually result in a total of approximately 600 employees being laid off.
90% of the 600 are those in support function, finance, maintenance, recruiting, training, and other non-development related positions. The other 10% are gaming development related and we already know the names of some of those employees.
If you weren't already aware, I do still continuously update older posts and I was monitoring those Mass Layoff "rumors" up until late January.
Many of the employees from my original suspicion list were eventually confirmed and in the end, there were probably about 40-50 layoffs in late 2011 to early 2012. Most of them were Customer Support staff from both in and outside of their call centers.
I guess we finally have an answer as to why Blizzard was so ambiguous, but not exactly denying, those mass lay off rumors a few months ago.
Zarhym: The vast majority named in that article are at work today. FB profiles can't be used to confirm anything, especially a mass trend!Layoffs of this magnitude have happened with Activision Blizzard many times in the past, and they typically happen around January/February (announced before the shareholders call.)
Bashiok: Hey guys, out of respect for their privacy, we don’t discuss individual employees, but the speculation circulating about ‘massive layoffs at Blizzard’ is just a rumor.
So, it shouldn't be much of a shock if you see this happen again next February (probably a smaller size though, and more on the Activision side.) The staff they're cutting are just redundant positions (mostly customer support), so these changes won't effect the development times of their games and it just means more savings for the company and happier investors.
Another blacklisting story that you're probably already aware of.
Basically, Gameblog.fr was a "preferred fansite" by Activision Blizzard. They published a story that A/B didn't like, A/B asked them to remove it "as a favor", they asked again "as a favor", then they said to remove it or consider "all of the consequences this could lead to." Then, A/B threatened again that it would seriously deteriorate their professional relationship, Gameblog wasn't fully aware of the consequences, and that they had already contacted their Ad Agency to remove advertising from the site.
They were cut off from Activision Blizzard titles, uninvited from media events, exclusive information, etc. The exact same thing that they did to Incgamers.
Today, though, Activision Blizzard claims that it was just "a misunderstanding." Their PR firm has stated that "Activision doesn't blacklist journalists. We believe this was a misunderstanding and are working towards a resolution."
EU Beta Invites have gone out and they're STILL blacklisted even though they're one of the largest Blizzard fansites (far bigger than even Diablofans.)
I think they really need to practice what they preach, and I hope that Incgamers contacts all of the news organizations involved with this story and let them know the "misunderstanding" that they've also have been experiencing for the past few years. There's even proof of the blacklisting on the official Blizzard forums too, if that helps.
So, a news alert just went out 15 minutes ago that apparently Thomas Tippl (COO & CFO of Activision Blizzard) will be presenting at the Goldman Sachs 2012 Technology and Internet Conference today at 10:20AM PST.
A very last minute invite.. it's possible they weren't even sure if he was going to be presenting today or not.
If you're interested in this sort of stuff, you can join the webcast here.
During the course of the presentation, Activision Blizzard may make forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that these statements are only predictions and actual events or results may differ materially.This is a pretty typical warning for any speeches regarding finances, so don't get your hopes up.
It's too soon for a release date announcement, plus Mike Morhaime said that it would be in the "weeks ahead." (Not "within the week ahead.") If any kind of release date announcement is made, it would be the announcement of another delay. :)
* UPDATE:
It was pretty much information we already knew. They have 2 releases in the pipeline, but they still might bring 3 (at the VGA, Mike had said 3 releases this year.)
Thomas did mention what I was talking about before. They're not afraid of cannibalization and they want WOW players introduced to the Diablo franchise so that they eventually play both (great way to extend the longevity of WOW in the absence of regular content additions.) By encouraging customers to play Diablo, they will use the RMAH to pay for their subscriptions and other games.
He was hesitant to talk about the revenue model for their Next Gen MMO, but I got the feeling that it won't be subscription based. "It works well for World of Warcraft, but not others." Makes me wonder if Titan will be much smaller in size and scope than WOW.
Notes taken from the Activision Blizzard Analyst Day [Source]:
* Introductory music for Kotick was hilarious. "PLEASE WELCOME.. *intense energizing action music*.. BOB-BY KOOOO-TICK!!!!"
* Kotick used the term "game changer" which was a pun that wasn't supposed to be a pun. I am disappoint.
* Apparently, Battle.net only has "15 Million (+) Monthly Active Users". Doesn't anyone else find that very low? This includes all Diablo players, StarCraft 1 + 2 players, WoW Starter Accounts, and World of Warcraft (including WoW China) active players. The ones that have B.Net accounts anyways (which is required for SC2, WoW and Starter Accounts).. but 15 million? That's it? Based on their vanity figures, I had thought it would be closer to 25-30 million at least. Since Starcraft 2 has 4-5 million active B.Net accounts right now, that only leaves 10-11 million players for the rest of their franchises. Guess that confirms Daeity's previous estimates regarding REAL PLAYERS versus "Subscriptions". :)
In September of 2002, B.Net had 11 million active users. And in September of 2004, they had 12 million active users. [Source]
So, B.Net Monthly Active Users has only increased about 3 million in the past 7 years. Wow.
* Activision boldly claimed that COD has more players (30 million unique players) than any Facebook game, and higher engagement than all top Facebook games. Once again, these are vanity figures and don't reflect actual active players and could have just been registered users.
But they're wrong. As of Feb. 1, 2011 CityVille had ~98.5 million MAU and Farmville had ~53 million MAU. Those are ACTIVE USERS, not just registered users.
What statistics did they even compare to?
* Activision claimed that their preorders for COD: MW3 are significantly higher than previous games and all other competitors. This is old news though. Based on their statements, MW3 preorders should be at least 7 million.
* The Skylanders transmedia MMO is targeting the "37 million online and gaming households with children aged 6-12". They received this statistics from the "2011 Gamer Census Data" but I couldn't locate this anywhere online. Maybe an internally researched census?
Skylanders is basically Pokemon candy cigarettes intended to get children hooked before being introduced to "adult cigarettes".. that is, Call of Duty. Gotta get them when they're young.
* There are about 100 developers working on the new Halo MMO right now. They're also building their own gaming service portal for the game (a "Battle.net" for Halo).
* Mike Morhaime was up next. Mentioned that they have 4,500 employees across 10 global offices. 800 of those employees are developers. The rest, as you know, are Customer Service.
* Mike detailed some other Blizzard vanity figures:
Blizzcon 2010 had over 25,000 attendees and over 500,000 viewers paid for the virtual ticket. Their Facebook page has over 1 million users following it.
* They're working on "Blizzard DOTA" and still working on the Marketplace for B.Net.
* Made some very interesting remarks about "nonlinear subscriber growth" and "erosion of player base." Nonlinear growth meaning negative growth but stated in a positive light. He mentioned that subscriber numbers are impacted by seasonality and new content, but that they're working on increasing retention initiatives and new regions to expand their service. It just sort of came out of the blue too, he didn't talk about subscription changes. These comments worried a lot of the attendees.. it's like he's preparing them for low subscriber counts at their next quarterly meeting.
* Continuing with the low subscriber number, he mentioned that NetEase is working on penetrating their Tier 2 and Tier 3 cities in China. But there's risk involved, and their computer systems and IGR (Internet Game Rooms) are built for less performance heavy games like WoW. :)
* They've seen a 60% increase in new account creation due to the new World of Warcraft Starter Edition. Can't wait to see if they modify their "Subscriber" definition.
* The Diablo 3 Beta will be going into beta later this month. It will be starting during the last week or so, with beta invites going out at least 1-2 weeks in advance. So, Mid-Sept beta invites..
* Rob Pardo said that "Loot = BIG PART OF DIABLO". WOW has an "Achiever Economy" where players need to work for their items or have the best skill, whereas Diablo has a "Merchant Item Economy". The gameplay focus on items concerns me; I hope it doesn't sacrifice other important aspects of the game.
* Blizzard is expecting users to be able to sell items for $5, $10, and $50 on the Cash Auction House. The Gold Auction House will be for normal sales and most common items. The Cash Auction House will be for the best items and hardest to get.
* They seem to be aware that there's a clear segregation between the Gold AH and Cash AH in that the Gold AH will be used for low level items and the Cash AH will be used for high level items. For those who are complaining about the Cash AH, supporters will say "The real money auction house is optional." Well.. yes, optional for cheap items. All of the best items will be sold for cash and they'll also cycle through the system. Rob Pardo said that the "really powerful items will be bought and sold all the time."
* Rob Pardo is hoping people will use the Battle.net Account Balance (RMAH) to support their World of Warcraft subscription, buy B.Net games, and virtual items.
* The 3rd party payment provider partner has still not been announced yet because they don't technically have one yet. What concerns me is that they haven't finalized any deals yet, but that they're "getting close to a deal right now." The beta is starting soon, but they still haven't finalized the Cash Auction and Player Banking systems. Without a partner, what kind of shape is the technology and infrastructure? This can seriously push back the retail release date of the game and should have been finalized a long time ago. It sounds very last minute.
* Rob Pardo reiterated that the Cash Auction House is in place because players wanted it. "Why? PLAYERS WANT IT!" He also said, "Players really want this, and if we don't do it, someone else will."
* Thomas Tippl mentioned that the following investments will be out within the next 2-3 years: Diablo 3, D3 Expansion Pack, StarCraft X2 and X3, World of Warcraft X4 and X5. Titan MMO will incorporate mobile and social elements and will not be out in 2-3 years (i.e. 2014).
* Thomas Tippl said that the Map Marketplace will launch at the same time as the first SC2 Expansion Pack.
* Other than the World of Warcraft expansion packs, Blizzard also has new "Value Added Services" in the pipeline to enhance player experience.
* The Bungie MMO will be multiplatform. Since it trailed Skylanders information, it seemed to be that Thomas was indicating the Bungie MMO would be multiplatform like Skylanders. So, all consoles, plus PC, plus a "Web World" (or a web based method to access your account and possibly play elements of the game.)
* During the QA Period, the "nonlinear growth" question came up again. Mike Morhaime stated that the 12M to 11.1M drop was across the board but that "We don't break down regionally." They have done so in the past though.
* Regarding "continuing content", there will be a major update coming later this year. Meaning the X4 announcement at Blizzcon.
And, that's all folks. Some interesting stuff though.. especially that B.Net figure.
* Hot on the trail of the recent Minor Rockstar Update and the "Max Payne 3 is getting close?" posts, Rockstar has just announced that Max Payne 3 is getting closer to completion and that we're going to be getting a lot of news within the next few months.
* Also, hot on the trail of that Diablo Clone post (in which Diablo was once compared to a clone of Gauntlet, but now users just call new games clones of old Blizzard games), just 2 weeks later a wonderfully confirming forum post was made by an average MMO-Champion user.
* Activision Blizzards Analyst Day is coming up this Thursday, so expect some new announcements this week. During past Analyst Days, there have been new game announcements (COD6) or confirmations as well as zany Activision quotes about the current state of console, gaming, and their vision of their future.
* You've probably already heard about the massive Copyright theft by "Chad Love", if that's his real name, of ART4LOVE.COM. When I first heard about it over a week back, I immediately thought about that "Everyone Is A Pirate" post. There were potentially thousands of people who purchased pirated art from this very professional looking website, and they were even provided a Certificate of Authenticity with the art. This is just one small operation out of thousands of other fraudulent (but professional looking) websites out there selling pirated goods to unsuspecting consumers.
* I have a bad feeling about the game length of Diablo 3. It looks like leveling in the game is too quick (e.g. Lvl 30 by Act 2), and each of the Acts will be much shorter than Diablo 2. It's almost as if the difficulty levels were created to extend the length of the game rather than for re playability purposes like in D2. I really hope we won't be seeing too many "this game is too short" reviews. I may have to look into this a bit more to see if Blizzard has made any recent comments about the game length.
* Did some researching and found out that each Act is about 2 hours long. So, that's 8 hours for a full playthrough of the game and then you can go back and do it again and again on different difficulty levels. According to Blizzard, you will be able to complete the difficulty levels faster as you progress too, so Nightmare and Hell will take less than 8 hours. That sounds rather disappointing and I hope it's not accurate. Each play through should be at least 25-30 hours in length (not 8), and then shorter periods for each followup difficulty excluding Inferno. It really worries me that the game is going to be too short now and will rely on Auction House metagames and simply replaying the exact same game again but with NPC palette swaps..
On a related note, the reason why they only need players to test such a small section of Diablo 3 in the beta is because D3 is much easier to manage, test, and QA than WOW. D3 has a very small fraction of thousands of WOW quests and gameplay mechanics. A small QA team can easily spellcheck and test everything in the game over a short period of time. The only testing that's really needed from us is for load, server, and technical reasons.
Paraphrased of course. :)
Activision (Source):
Game publishers really shouldn't throw insults around at their competitors. Whoever does this is mean and unprofessional. Looking at you EA.
Earlier..
Activision (Source):
I've only seen Battlefied 3 on a PC. It's just a PC title, a very small audience, and not on console where most business is.
Activision (Source):
There’s not a studio at this company that will tell you: 'Activision is forcing us to get the game out.' Our people have personalities, are autonomous, responsible, creative, serious, and they want to make great games. EA is the exact opposite.
Activision (Source):
Indie developers suck ass. Bungie is "probably the last remaining high quality independent developer. It's very hard to... that has sort of has institutional skills and capabilities. And they're a real company."
Sad to see Destructoid defending Activision (first link) and calling EA's responses "petty antics." Both of these companies have been firing shots at each other for years, and no one should be taking any sides in the matter. This is just what competitors have been doing for thousands of years, and they both put themselves on high pedestals (which is also tiring and cliche). War never changes.
Hmmm.. saw an interesting new domain registration just yesterday.
Here's the link, check it out:
http://www.activisioncommercialsummit.com
It's an Activision / Blizzard streaming webpage apparently for an upcoming conference (called the "Activision Commercial Summit") on 03/23/2011. Seems like they're cutting it awfully short and I have no idea what this is.
The domain was registered by CUBIC COMUNICACION AUDIOVISUAL (in Barcelona) who will be providing the streaming services of the event. There's no streaming video available at the moment, it's locked. (There's a chat channel attached to the video stream too, usually something like this is reserved for business conferences.)
I'll search around, and see if I can dig up more information about this summit. There are some educational gaming conferences taking place this month. Or, maybe this is just testing (or a sales pitch) for an event they'll be potentially hosting in the future.
Have you guys heard anything about this? Anything that Activision is supposed to be announcing in Barcelona on March 23rd?
* UPDATE (03/21/2011):
The webpage has been updated with the following news item:
"The Activision EU Commercial Summit stream will commence at 10am GMT+1"
And there's a countdown clock now too.
An interesting read on 1UP following those most recent Take Two announcements.
Oh! A while back, Pachter also predicted GTA 5 would be released in 2010. =]
Here were some of his other past predictions/comments:
1. Mafia II unlikely to be profitable and would not recoup the cost of game development. (Source)
Take Two still has DLC development underway for Mafia II this year. On Steam, it was in the Top 10 of best selling games for 2010 (even though Mafia II came out just 4 months before the end of the year.)
2. Starcraft 2 would sell 6 million units on opening day, however it ended up being 1.5 million instead. (By the end of the first month, they sold 3 million units worldwide and by end of February they sold 4.5 million units.)
After first day sales were released by Blizzard, he adjusted his prediction and made it 5 million total copies within 2-3 months. However, it took 7 months before it reached 4.5 million units. =]
I didn't think it was really fair though, making such a big change after seeing all of the sales details. Not that it helped either though..
3. He was highly skeptical of Red Dead Redemption, and stated that it was not blockbuster material.
4. On a related note, he's predicting that LA Noire will be comparable in sales and just as successful as Red Dead Redemption (after he apologized for underestimating RDR in the first place.)
Personally, I have my doubts about LA Noire though.. it looks like a great game, but it's like releasing a natural disaster movie in the middle of vampire film/TV season. I've been watching Google/Twitter trends and monitoring other various patterns, but there's very little interest in LA Noire so far (especially in comparison to other big name releases coming out during the same period).
I'm worried that the game might end up being too linear or storyline driven, with most of the game taking place with cut scenes and NPC interaction (after all, they spent a lot of time and money on voice acting and facial imaging). If there are too many NPC conversations and detective mini-games that are impossible to lose, it takes away from the freedom and excitement of exploring in RDR and GTA. What if there's little in the way of side quests (errr... "investigations") and everything in the game is based on one single storyline or one investigation after the other? Then it just becomes an interactive visual novel.
The other thing that worries me is that people are mostly talking about how "great it looks", but very little about the actual gameplay, story, characters or music. I still think first month's hypetastic sales will be very good mind you (I'm predicting ~2.5 million worldwide for the first month), but I don't think they will be as high as RDR in the long run. I also think Michael Pachter will be left disappointed with his own sales predictions. =] Hopefully, Team Bondi is developing a very stable game too.. this game is going to make or break them.
5. He thought that Ubisoft DRM was a good idea.
6. He said Borderlands would fail badly.
7. He's predicting that the Activision-Bungie game will sell 10-15 million on opening day. I'll have to come back to this one at a much later date.
His predictions, of course, have a lot of IF's and BUT's. IF it's as popular as Halo, IF it's released on multiple platforms, IF they have a good sales day.. blah blah blah. Come on, where's the hard science and figures?
From what I've seen online, he wasn't too bad going back 5-7+ years ago but things have gone very bad for him since late 2008. So, it's probably a good idea for him to leave his predictions more open ended like he did with the Activision/Bungie unannounced game.
Some mildly interesting stuff:
- Cataclysm sales were supposed to push them over $600 million in revenue (for Cataclysm sales alone, excluding new subs and older WoW game purchases), but they earned $544 million instead. GAAP Revenue was $340 million for this most recent quarter, but they're deferring $204 million to next quarter. Nice way to show a constant revenue growth each quarter. =]
- Earnings basically showed those 4.7 million Cataclysm sales over 3 months as detailed earlier. Since they were expecting to earn about $320 million (if Cataclysm never launched) for the quarter, and that $544 million included all new WoW/TBC/WOTLK sales as well, there doesn't appear to be much of an increase in new subscriptions at all. Cataclysm was supposed to be the expansion pack to bring back all of the old players, but the impact has been minimal.
- That's actually good news for their next expansion pack really. Since the shattering experiment failed, they'll need to do something really big for the next expansion pack to get player's interest back: tons of new dungeons, a couple new professions, and at least two new hero classes would be nice. Maybe a third faction? =] It's going to have to be something very impressive to bring back the masses.
- The new "Project Beachhead" digital platform for Call of Duty.. paid services, communication, online community, exclusive content, digital downloads, and such. It'll basically be Battle.net for the CoD franchise - remember how they eventually wanted to bring everything together as one gigantic "Battle.net"?
- They're discontinuing Guitar Hero and disbanding associated business units (e.g. laying people off, closing studios). They're also killing off True Crime: Hong Kong.
- Activision Blizzard will be announcing an "innovative new universe with broad appeal that will be revealed at Toy Fair later this week and will bring the world of toys, video games and the Internet together in an unprecedented way." This is the first time Activision will be exhibiting at Toy Fair and this isn't for Blizzard related games, so I'm not really interested. It will probably be about their LEGO series or Zhu Zhu Pets or something.. meh.
- Outlook not so good for Blizzard titles in 2011, but they promised at least 2 major releases in 2012. Those would most likely be Diablo 3 and their next SC2 Expansion Pack (Heart of the Swarm) though. Their next-gen MMO is still years away.
- NetEase will be doing their Starcraft 2 launch in China. I wonder how it's going to be received in China..
- Heart of the Swarm will have more details (e.g. release date?) in the "coming months". Diablo 3 beta will be starting soon too (they're playing it cool with Diablo 3, as usual, they don't want to make any announcements yet and want to make sure the game is perfected before release).
The call is over now.. I was hoping for more, but not surprised at all.
FYI.. their stock is falling rapidly as a result of this call too. Mostly because of their statement on low revenue/guidance this year. 2011's going to really suck for both Activision and their customers. =[
* UPDATE:
Confirmation regarding lay-offs. Both Vicarious Visions and Freestyle Games have been hit with notices shortly after the meeting. According to Activision Blizzard's 8-K, they'll be getting rid of approx. 500 employees. The decision was made Feb. 3, and will be taking place on March 31 for the staff.
This same time last year, they laid off approx. 200 people. Apparently, February is the time of month when the non-performing studios need to start worrying.
Take-Two's Quarterly Earnings call is today at 1:30PM PST. And Activision Blizzard's call is tomorrow at 1:30PM PST as well.
The reason you've been seeing a bunch of new game announcements and release dates over the past couple weeks is because we're in the middle of various shareholders meetings and it's the beginning of a new year for gamers.
In the past, Mike Morhaime has used this call for official announcements like release dates, new games, and new services. Take-Two has also announced new games or release dates during this time.
Would be nice if Activision Blizzard were to announce the Diablo 3 release date tomorrow, rather than fans having to wait until BlizzCon 2011. They usually have one big announcement they want to make at BlizzCon.. so that's why I'm hoping the release date is announced much sooner.
* UPDATE:
Looks like the Take Two call was pretty disappointing and simply reiterating what everyone already knew. Their future lineup is looking pretty thin, and I think they're putting all of their bets on MLB2K11, Top Spin 4, DNF, LA Noire and BioShock Infinite. It's nice to see more of a PC lineup for 2011 and 2012 though (e.g. The Darkness 2, X-COM, Bioshock Infinite, and Spec Ops: The Line). At least we'll see X-COM this year but I was hoping for something new, oh well.. hope Activision Blizzard has some good news tomorrow.
I'm starting to get a bad feeling about DNF too.. the game is starting to look very linear and just like DOOM 3 (incl. the dated graphics.) I think there are going to be a lot of disappointed fans when the game comes out with very poor reviews and sales. So if you own stocks in TTWO, I would recommend waiting until the official release date announcement and sell off shares about 1 month before the release date. Then, just buy back shares (at a much reduced price) after the TTWO stock tumbles. =]
First QA question was about Max Payne 3. No updates today, "still being worked on" is what they said last.
He also asked about other versions (platforms and/or DLC) of Red Dead Redemption, but they don't have any announcements about it yet: "nothing to say about future iterations."
With everything Blizzard has been bragging about over the past several months (e.g. successful WOTLK China launch, largest ever "12 million subscribers", huge number of people returning to WoW in anticipation of Cataclysm, etc.) you would expect this quarter's World of Warcraft earnings to be highly successful.
I think you'll be shocked by the results:
World of Warcraft revenues were $289 million for the 3rd quarter.
That's the exact same amount of revenue as their previous quarter.
In 2009 during the same quarter, they made $306 million (even though they have much larger subscription base in 2010).
During the 2nd Quarter (Ending June 30 2010), they released the Celestial Steed, the RAF Flying Mount, and introduced the Remote/Mobile Auction House service at the end of the quarter (so revenues for that new service actually carried over to the 3rd quarter.)
To help put things into perspective: even with ALL OF THAT FANFARE, the China launch, the "huge climb" of subscriptions, and Cataclysm coming soon, they still only made the same amount of revenue that they did during a quarter when absolutely NOTHING happened.
This is bad news indeed.
It gets much worse though. According to ActiBlizzion, they raked in $745 million in revenue with only $51 million in actual profit. That's a huge amount of expenses that cut deep into their revenue. (Although, they put a very positive spin on their Q3 results.)
World of Warcraft generated $289 million in revenue but their own expenses (staff costs, server operating costs, etc. according to Blizzard) were only about $13 million for that quarter.
So, WoW generated over $270 million in profit - but the Activision side of the family laid a gigantic smackdown on their overall profit, They must have some pretty insane expenses and I wonder what the investors feel about this? Look at it this way: if there was no "Activision", that $51 million profit would have been over $270 million instead.
World of Warcraft, by the way, is ActiBlizzion's flagship product and amounts to almost 40% of the entire company's revenue stream. You can see that Vivendi is incredibly dependent on Blizzard, but without WoW there would be a massive deficit. (See "What Vivendi Fears Most".)
* Addendum: Back in March 2010, Kotaku had an interesting article.. Activision's reports pointed out that World of Warcraft amounted to 98% of Blizzard's revenue which was up from the previous two years (97%). WoW also accounted for ~70% of Activision's net revenue. 'nuff said.
During the Q3 earnings presentation, Activision also kept bringing up Starcraft 2 and how successful the launch was. They mentioned everything else I said they would, but I was surprised they kept talking about Starcraft 2. Details had already been announced during the previous quarter and was talked about at great length at the time. But, I didn't think they were desperate enough to bring it up again ("SC2 launch! SC2 launch everybody!".. you know, even though the information was released already last quarter.)
Starcraft 2 sales figures were also very disappointing. They only sold 3 million units to date. By comparison, Red Dead Redemption (a more recent release) sold 5 million units in less than a month and it was considered a moderate success. Using that same time frame as a basis of comparison, the original Starcraft sold almost 2.5 million units (SC1 launched in 1998 plus BW units which launched 8 months later during that same year). Tiberian Sun (1999) sold 3 million units by year end, and Red Alert (1996) sold 1.5 million in under 4 weeks - and another million more over the next few months.
Keep in mind that those sales were from over a decade ago, and they're comparable to Starcraft 2 sales as they are now!
Worldwide, the video game industry revenues in 2007 were about $41.9 billion, in 2004 they were $25.4 billion, and in 1994 they were $7 billion. So, since 2001 video game revenues have almost tripled in size (2.7x actually), and even with that explosive growth, SC2 still only sold the same amount as Tiberian Sun from over 10 years ago (within the same timeframe, the only difference is that SC2 sold more on opening day).
"Professional Analysts" had initially predicated that SC2 sales would be significantly higher: 7 million sales within the first 5 months, 4 million within 3 months, 6.5 million within 5 months, 5 million in 5 months, and finally 6 million in 5 months. Apparently, Cataclysm is also supposed to sell 6 million copies on the first day, according to one of the analysts.
Keep in mind that these "professional analysts" are the best and brightest in this field. Man, were they off.
So anyhow.. overall the Q3 conference turned out just as depressing as Blizzcon 2010 - no news, no major announcements, just very boring and disappointing. If I was a major investor in the company, I would be very angry and asking a lot of questions.
* Quick Update:
One of the readers didn't understand the comparison of Blizzard's "3 million in the first month", compared to analyst predictions of "7 million sales within 5 months", etc. If you read back over past posts, this makes more sense as I've talked trends and sales figures.
What happens is that the largest amount of sales occur on the first day. And then the numbers steadily drop each follow day. SC2 for example sold 1.5M on the first day, on the next day they sold half that amount, and then 50% of that figure, and so on.
Almost all game releases follow the same trend, here's an example:
5 million during the first week (largest amount on the opening day)
800,000 during the second week
600,000 during the third week
400,000 during the fourth week
200,000 during the fifth week
150,000 during the sixth week
100,000.. 70,000.. 50,000 etc.
As of right now (4 months after release), Starcraft 2 is at about 3 million units sold. With only 1 month to go, there's a very unlikely chance that SC2 will suddenly sell 4 million units within the next few weeks. I hope that clarifies.
Activision-Blizzard's Third Quarter Investor conference call will be taking place next week (Nov 4.) I'm excited.
Sure, it sounds boring to you - but these are the calls where they review the company's current situation (I look forwards to the raw data to get a better insight into the company) and discuss future strategic plans or growth for the following quarter that will generate even more profit for their investors. Sometimes the results of these calls won't be made public for a few weeks following, but some information will typically leak out.
BlizzCon is reserved for all of the big Blizzard announcements, but this upcoming investor meeting might describe a plan for some future Activision/Blizzard interaction. There's a strong possibility, for example, that Activision may announce full integration of their own software line (complete with digital downloads, social interaction, match-making, etc.) on Blizzard's Battle.net service.
Activision will give the typical speech to bolster customer and investor confidence (ie, Blizzcon was a big success, WOTLK launch in China was a big success, upcoming Cataclysm release will be a big success, blah blah blah) especially since they performed so poorly last quarter.
But I'm hoping that there will be a hint at more "console development", but not actually point their finger's in Blizzard's direction. Or maybe they will. =]
Back in August, I made a post about how Diablo 3 looked like it was designed (with purpose) for console platforms. It had the perfect GUI, interface, and gameplay. WOW & SC2 are no where near close, but D3 is ready for the transition. It would be fitting for Diablo to be back on consoles too.. third time's a charm, right?
The reason I'm mentioning this now, is because just recently Blizzard has been hinting at D3 development for consoles and the information is being picked up by various gaming news sites.
In other news, I was anticipating a Red Dead Redemption PC port announcement this November as their quarterly announcements were supposed to happen next month. There aren't any gaming conventions occurring during the next quarter, so most of their big announcements would have been taking place next month. I'm was really hoping for a RDR PC announcement too, but it will probably be about GTA 5 (a new GTA release wouldn't be the only reason for moving their Fiscal Year by the way - that would just be silly).
HOWEVER, they just MOVED their Fiscal Quarter! (Yes, this is legal with special approval.)
That's actually big news in itself. =]
There are only a few reasons why a company would be moving it's Fiscal Year-End. Sometimes it's done by companies who want to match their own Fiscal Year with that of their parent company, sometimes it's for minimizing taxes (meaning that they're hurting financially), sometimes it's due to the termination of a partnership (hmmm...), sometimes they do it because there are indications of (seasonally) low revenue, or sometimes it's if they will be giving up control of their corporation (EA has been interested in Take-Two for a while now).
Most likely though is that they have some MAJOR re-structuring planned for the next few months and their revenue isn't as high as they were expecting. There are two things that can happen: they need to reduce costs or they need to increase profits by pumping out more releases and at a faster pace. =]
On a related note (ie, "re-structuring" in the future), Rockstar Toronto has been hiring a lot more people recently. Game Programmers, Designers, and Support Staff.. and they all seem to be replacements due to attrition. Maybe the Rockstar remote sites know something we don't?
With this recent announcement though, it's safe to say that there's something big coming down the pipe. I'm predicting lay-offs, as it's always the easier way out and the path taken by most companies these days (ie, when they need to cut expenses to increase profit, rather than using money to make more money.)
Update (10/29/10):
Take-Two just made a new announcement, so yeah - there's definitely some major re-organization taking place. Their CEO is stepping down. =]
This is a good indication that they might be giving up control of the corporation (ie, being acquired by Electronic Arts), hence one of the reasons for moving their Fiscal Year. There are some other companies that were interested as well (including Activision), but EA is the front runner.
I still think there's more lay-offs on the way. Many people will say that Take-Two has been doing really well. Sure, they have been doing well but not "well enough" and investors want them to do better. Besides this upcoming reorganization, it will also give Take-Two more time to develop their various (ongoing) technologies and work on their big name games. Should be interesting.. I'm looking forwards to their next game announcements. It'll most likely be sequels though, and no new IPs. =[
Another Update:
Apparently this post caught the attention of many employees from Take Two and Rockstar. =]
The visitor log has been showing a lot of visits from the internal offices of Take Two. Apparently, they must not have a very strict policy for internet usage. =] There are multiple hits from a few external facing IP addresses: Take-Two Interactive Software (69.10.95.2), Rockstar Games (69.10.69.2), Rockstar Toronto (63.145.31.10), Rockstargames Ltd (212.46.144.57), etc.
(On a related note, I still get visited by Blizzard employees a lot too. They haven't been posting any new comments though since that last guy.)
So anyways, it appears that because of Take-Two's latest announcement there's a stock trader "feeding frenzy" going on and they're looking for as much information as possible. It's pretty funny watching all of the guess work going on.
Unfortunately, all of their visits were very specific as many were only looking at the one page and ignoring previous posts from months ago when I was mentioning Rockstar Toronto activities. I followed Rockstar Toronto specifically since I was primarily interested in the Red Dead Redemption PC port and they're the team most likely to produce it. Guess we'll find out soon enough.
Update (01/27/11):
I was right. =]
Now, management at Rockstar London and Lincoln have also been given their pink slips. These are just the big names though that were made public, but there have been many other exits as well within Take Two over the past few months.
There are also rumors of more impending layoffs at the Rockstar London facility.
It seems like just yesterday when Take Two was denying studio layoffs, and claimed that there were no impending layoffs, or an intention to lay off 20% of it's workforce in an attempt to "restructure and improve it's financial standing." Some of the rumors confirmed apparently.
Something very interesting just happened to me. And coincidentally enough, this also fits in with the ongoing Blizzard Series.
Back in 2006, I created a highly unusual and unique Gmail account that was used strictly for one of my WoW accounts (I own many). I didn't want any spam sent to the account, hence the reason for it's length and unique name.
Think something like: kaba23.blaaey.sphlnxtoo.blzzmain@gmail.com (This isn't the actual email address.)
The only place the email account name was ever "shared" was on my WoW Account. That was the entire purpose for the email address actually, for WoW only. The email address is not public, never used, and highly unique.
I should note that it's been 4 years now and I have never received even a single spam message on the Gmail account.
So here's what happened:
- I requested an automated password change from Battle.net (couldn't remember the WoW Login password).
- I logged into the Gmail account to reset the BNet password.
- I reactivated the old WoW account (which hasn't been active in 2.5 years mind you).
- Although I haven't received any spam messages in 4 years, I suddenly received one from a WoW Spammer approximately 3 hours after activating my WoW Account. I was shocked.
- This was all done from a very secure (and virtualized) PC and this is actually the very first WoW Spam message I've ever received on any of my Gmail accounts.
How on earth did they find me?
Is it possible that my email address was leaked by Blizzard (well, someone from Blizzard)? And why did I receive a spam message so quickly? Did I happen to request a password change at just the right time when transactions were being monitored?
One of the primary defenses that Blizzard supporters use (when questioned about internal account theft) is that GM/CS Forum Reps/etc do not ask for passwords, and that they do not have access to passwords and can only reset them.
I always get a chuckle whenever they use this defense.. mostly because their only exposure is to GMs/Support and they have no idea what goes on behind the curtain. GMs may not have access to passwords through their ugly-homegrown-support-interface, but they sure can see your email addresses or ask for them. Targeted WoW Account Phishing sure is a lot easier when you have a database of actual WoW users!
Sure, there are "security measures in place" for GMs/Support Users, but that same policy does not apply to the IT team, administrators, the policy creators, the CEO, and database admins who have raw access to account and billing information.
Are passwords actually encrypted at the database end? Consider this: the more complicated the encryption and security measures, the more time it takes to approve your password/account and login. How quickly can you login on a slow day? Also, certain email traffic isn't encrypted.. so it would be quite easy for an internal employee to sniff SMTP traffic for email addresses or intercept password reset URLs. Packet sniffing is monitored internally by the way, but there are always ways to avoid detection or at least capture. Some interesting things to think about.
On a related note, while digging through old Blizzard communications I came across some old work related to encryption that may interest you. A work colleague and I used to frequently discuss this topic and strategize new security methodologies. Right now he's doing some neat stuff that you should check out. Back around 2004-2005, I was on the hunt for a talented PHP coder to construct a web app built around a reputation system, where users could earn points much like Reddit. But, I wanted the points system to act as currency so that the users could trade or exchange the digital currency for merchandise. Security of the data was really important, and the site would need to reach a critical mass of users before ever being feasible however. Long story short, because it had to be decentralized, there was no way we would be able to do it through a website. We would need to potentially encrypt data amongst thousands of users so that records would be set in stone and ensure security of the points. Trust was paramount. I never ended up building the site, but a few months ago, he starting making some progress on the app thanks to some new stuff in peer-to-peer tech. He hacked some code together and has been working on an idea that we always wanted to do. It's like a P2P cash application and he explained in more detail here (it's only a few pages, and not a long read). If this interests you, you can download the latest 0.20 version here. Please note that this is still very early in development and buggy. But it's very cool to see this old idea some to fruition.
It's also interesting to note (while I'm on the subject of encryption and passwords) is that the reason GMs and Customer Support make a point that they'll "never ask for your account password" is because they already have FULL access to your account without your knowledge or permission. (As if your permission really matters though.)
It's actually quite common for a GM to login to your account to test issues, see if mods are interfering with your gameplay, or to fix problems while you're offline. So, if someone from Blizzard ever tells you that their employees don't have access to your account, that's completely untrue. They can login to and access it whenever they want.
