Is Warcraft Dying?

UPDATE (6/30/2011): Also visit my follow up article on the state of Warcraft.

This is a question that gets batted around now and again and the answer usually ends up being “no”; though it might be time to change that to “Maybe” if not “Yes”. Why is this? I’m not sure of the answer, though here are some possibilities that in sum might be the cause.

Competition, Population & Fatigue
There have been several purported “WoW killers” that have come out the past few years. The reality is that they have not had success in dethroning WoW. Some may survive as niche games; others just die off and disappear. The problem might simply be that Warcraft has hit the ceiling for potential subscribers. It’s reasonable to assume that only people in developed countries will play WoW. Of those the most likely players are going to be in a particular demographic and of those in that demographic only so many are interested in MMOs at all.

I’m not sure what that exact number is, but given WoW’s growth I imagine it’s possible that Blizzard has saturated the market. The problem is with such explosive growth and a limited market is that as people leave the game there is a very small pool of new players to start paying for WoW. So long as the turnover is slow the level of subscribers can be maintained with a slow matriculation of new players. Blizzard has clearly hit this plateau because WoW subscriptions have been around 11 million for a few years now. The upcoming Cataclysm expansion will likely bump the numbers briefly but I don’t think it will last. It’s likely that after the brief renewal of interest in WoW following the next expansion the original problem of fatigue will occur. Even though the game will be updated and new things added it is still WoW. The fatigue for the game will only be temporarily suppressed and inevitably some people will move on to something new. Depending on what competitors are offering it’s possible that at the end of the Catalysm cycle WoW’s numbers maybe be below 11 or even 10 million.

Money Does the Talking
Blizzard is aware of the plateau and decline problem, and they know that a drop in subscription numbers could threaten a revenue stream that has essentially minted them gold. Even if WoW subscription numbers go in decline unless a true WoW killer steps forward it’s likely to take years before WoW’s market share drops to levels in line with its smaller competitors. The problem remains a drop of revenue though and as such Blizzard needs to make up the difference as it is a business and profits matter.

Bring in the Blizzard store. If growth in subscriptions is no longer possible Blizzard turns back towards its current customers. In the past year Blizzard has offered more products and services than it ever has in the first 5 years of WoW: Faction Change, Character Re-customization, Vanity Pets, Mounts, and now a paid Armory app for the iPhone. It’s likely this is only the beginning. Blizzard is hedging against a drop in subscription numbers by providing perks to current players who are willing to pay. The introduction of the Celestial Mount is particularly interesting because it is a purchasable item that confers a very narrow benefit to characters in game (namely that it’s a free epic ground/flying mount to all characters on that account).

What’s the End Game?
I don’t know, but given all the in game items and services Blizzard is offering it’s clear they are seeing the writing on the wall, even if it’s far away. It’s not because Blizzard doesn’t have enough of our money (though I’m sure they wouldn’t mind more), but they know that current subscription levels are not sustainable forever and that eventually they will begin to drop. WoW will likely see several more expansions before it is ever brought down, but that doesn’t mean Blizzard doesn’t have a bottom line to look after. So to return to the original question, “is WoW dying”? I think it’s time to say maybe. Not because of any exterior force, but of internal and inevitable factors.