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More Gold for Warcraft
Blizzard/Vivendi's multiplayer game continues to rake it in
Anyone who isn't convinced that video games are big business ought to look at the latest financial results from Vivendi. For the first half of 2007, the media conglomerate showed a 6.4 percent increase in revenues, but its Vivendi Games unit had a 68.9 percent gain – 80.4 percent on a constant currency basis. The results sound even more striking when you consider that almost all of the revenue in that unit comes from one game: World of Warcraft.
Made by Blizzard, an independent company that Vivendi acquired, World of Warcraft is a massively multiplayer game, in which players cooperate and compete with other characters controlled by other people from around the globe. You could call it a virtual world. Or you could call it a high-tech cross between a chat room and a traditional game.
To the casual viewer, Warcraft looks like a graphically intense version of Dungeons & Dragons, where players appear like characters out of Lord of the Rings. If this sounds marginal, consider that the game has 9 million subscribers.
To the media business, it must look like the future. World of Warcraft makes most of its money charging monthly subscription fees – about $15 in most of the world. On the surface, this is an executive's dream. The money comes in every month, just as it does in cable television. Only instead of paying independent companies for programming, Blizzard creates all the content itself. This costs more than you'd think: The company's server load is astounding, quality customer service is expensive, and programmers constantly add "incremental" content when they're not working on "expansion packs" that are sold in stores. Still, I'd be surprised if the game's operating margin were less than 40 percent. That's impressive for the software business – and unheard of for media.
Made by Blizzard, an independent company that Vivendi acquired, World of Warcraft is a massively multiplayer game, in which players cooperate and compete with other characters controlled by other people from around the globe. You could call it a virtual world. Or you could call it a high-tech cross between a chat room and a traditional game.
To the casual viewer, Warcraft looks like a graphically intense version of Dungeons & Dragons, where players appear like characters out of Lord of the Rings. If this sounds marginal, consider that the game has 9 million subscribers.
To the media business, it must look like the future. World of Warcraft makes most of its money charging monthly subscription fees – about $15 in most of the world. On the surface, this is an executive's dream. The money comes in every month, just as it does in cable television. Only instead of paying independent companies for programming, Blizzard creates all the content itself. This costs more than you'd think: The company's server load is astounding, quality customer service is expensive, and programmers constantly add "incremental" content when they're not working on "expansion packs" that are sold in stores. Still, I'd be surprised if the game's operating margin were less than 40 percent. That's impressive for the software business – and unheard of for media.
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10:05 EDT, 07.Sep.07