Dubious Practices in MMO Marketing: How Numbers Can Be Misleading

by Wolfshead on August 5, 2009

For the past few years, I’ve been suspicious of Blizzard’s grandiose claims of millions of subscribers for their World of Warcraft MMO. Those numbers have never struck me as being entirely honest. Via Tesh, this week it was revealed by Gamasutra that although Asia accounts for a paltry 6% of the total revenue from WoW, it makes up 50% of their global users.

Combine this with the report that Blizzard earns $1 billion in revenues from WoW each year and you can arrive at some interesting deductions about how MMOs are marketed and promoted if you look hard enough.

All Subscribers Are Not Equal

Blizzard’s current claim that they have 11.5 million total subscribers while technically accurate is misleading because not all subscribers are paying the same to play WoW. Some of us already familiar with the Asian pay per play scheme for MMOs but I highly doubt the average WoW gamer in the U.S. and Europe would be aware of this.

For every dollar a non-Asian WoW subscriber pays for WoW an Asian subscriber pays 6 cents. The reality is that all WoW subscribers are not equal; they do not have equal representative value for purposes of comparison. Yet for purposes of marketing and to the untrained eye: a subscriber is a subscriber.

Korean Internet Cafe

If there are 5.75 million WoW subscribers in Asia only bringing in 6% of the total worldwide WoW revenue then I have calculated that in terms of “real” subscribers the Asian market is the equivalent of approximately 370, 000 U.S. and European subscribers who pay to play by the month. Combine this with the actual numbers of U.S. and European subscribers and you’d have an adjusted total of approximately 6.12 million subscribers playing WoW — not the 11.5 subscribers that they claimed in their last press release.

The resulting 6.12 million subscribers is a bit more than half the number that they claim that WoW actually has. Suddenly WoW doesn’t look like a social and cultural juggernaut.

Are Westerners Subsidizing Asian MMO Gamers?

Given the puny amount of revenue that Blizzard is generating from WoW in Asia, why aren’t they charging Asians more and the rest of us less? Fair is fair.

Another issue worth bringing up is because of the millions of Asian gamers with access to WoW we now have the scourge of gold farmers with ties to organized crime syndicates. Player accounts are hacked, stolen and used to farm gold. They also disrupt gameplay within WoW with their spam. Blizzard spends a considerable amount of time and resources dealing with compromised accounts.

Given all of these problems and inequities, why are western subscribers still subsidizing Asian gamers?

I agree with Tesh, we are being soaked by Blizzard:

…the $15/month bears little relation to the real costs of making the game function. It’s likely an order of magnitude larger than necessary to even be profitable.

What’s adds insult to injury, is that precious little of the $1 billion in revenues goes back into the WoW.

Millions of Elvis Fans Can’t Be Wrong

Claiming that millions and millions of people are playing WoW has been always a big part of Blizzard’s marketing and promotion strategy. Blizzard never seems to miss an opportunity to release self-congratulatory press releases claiming even more millions of people are playing their MMO. It’s often been argued that they are the McDonald’s of the MMO world in more ways than one.

I remember growing up as a kid and seeing that kind of Madison Avenue spin used on one of Elvis Presley’s records entitled “50 Million Elvis Fans Can’t Be Wrong”. Even fast food giant MacDonald’s has used this motto for years with their “billions served” plastered on their brightly colored signs.

50 Million Elvis Fans Can't Be Wrong

This kind of marketing strategy plays on the tendency of most people to follow popular trends. It’s an appeal to consensus where we put aside our own feelings about something and instead trust in the judgment and wisdom of the “group”. Ergo, if something is popular and has mass acceptance then it must be worthwhile. This is exactly the part of the human psyche that the Blizzard marketeers are tapping into.

I remember seeing an interview with a lady in the former Soviet Union many years ago. On her way home from work she saw a big line forming. She didn’t know what they were lining up for but figured it must be something important and took her place at the end of the line. It turned out there were lining up for cabbage.

The Wall Street Connection

Another reason why Blizzard may be combining subscribers from both markets is to look good to investors in the stock market. Good performance for traded stocks is predicated on favorable news. I doubt the typical Wall Street investor understands the subtleties of the Asian MMO pricing model versus the U.S. and European pricing model.

The Downside of Dubious Marketing Practices

Comparing Asian subscribers to US and European subscribers is comparing apples to oranges. The problem here is that all things are not equal. At first it may seem like clever marketing on the part of Blizzard to lump them all together to make their numbers look good but one wonders about some of the possible negative ramifications of this practice:

  • It reflects poorly on Blizzard that they must resort to mixing subscribers from different pricing models and different cultures in order to create good copy for their press releases and marketing campaigns
  • How many people didn’t bother to play other MMOs and instead chose to follow everyone else and play WoW because this particular marketing sleight of hand?
  • How many good and unique MMOs didn’t get enough subscribers and lost precious potential revenues because of the pervasiveness of WoW in the public consciousness?
  • I worry about the future development of MMOs when one company who has 62.2% of the worldwide MMO market share puts very little of those profits back into their MMO

Conclusion

The Gamasutra article has revealed some eye opening facts regarding Blizzard and their involvement in the Asian market. There are certain inequities such as the subsidization of Asian gamers that are troubling. As to why they are doing this I can only speculate that they are using WoW as a beachhead to establish future profitability there in the future and using Western gamers to fund it.

I don’t fault Blizzard for their unparalleled success with WoW. They should be commended for taking a fringe demographic of the video game market and propelled it to new levels of popularity via innovation and polish. What I object to is their insatiable need to dominate the market even further by using this questionable millions served marketing approach to convince people on the sidelines to subscribe to their MMO.

We’re all proud of what Blizzard has accomplished but could we please see a little less avarice? Having 5.75 million non-Asian subscribers is very respectable — there’s no need to inflate those numbers with Asian subscribers who happen sit down for a one hour session of WoW in an Internet cafe.

They also need to stop issuing those bravado laden press releases. You’ve made your point Blizzard. We get it. And after all, they have an excellent product that doesn’t require this kind of dubious hype. Instead of using misleading numbers, they should let WoW stand on its own merits and be content with its undisputed market dominance.

-Wolfshead

Update: I just came upon the following WoW add on Google today…

WoW Google Ad

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