Elitist Attitudes part 2: You Can’t Go “Home” Again

April 25, 2011 at 2:11 am (QQ, Raiding, Real Life)

Previously, I discussed the recent complaints by the elite crowd that raiding had become too accessible for the “causal” player and that only the best should be raiding.  I’m presuming that they’re referring to the days of The Burning Crusade, as the raid content was so difficult in Vanilla that only the top 1% of raiding guilds ever reached Naxxramas.  Most, in fact, were stuck in Molten Core.  BC raiding required the huge time investment, but the gear drops allowed more advancement.  The biggest problem in BC raiding, and the one that seems to have fostered the elite attitude, was that it was nearly impossible to join a guild that was progressing past the initial steps.  As a new 70, you needed to be in a guild that was starting heroic dungeons – without a dungeon finder getting a group together to run heroics that required an attunement process was astronomically difficult.  And, once the gear had progressed past the heroic dungeons, the grind virtually guaranteed that folks wouldn’t be going back.  This held true as groups began to gear up through each tier of raiding.  So, if you couldn’t find a group that was starting when you were, your odds of getting to raid were slim indeed.

Wrath of the Litch King made things much, much easier.  And the bitching began anew, this time from the “hardcore” element who were apparently insulted by the concept that players hitting 80 would not be forced to fight through two levels of outdated content to enter ICC.  However, subscriber numbers soared.  Blizzard made money, and the shareholders were happy.  The happiness of the shareholders, and the nature of life, is what will make it impossible to return to extremely limited raiding.  In order to demonstrate, let’s take a flight of fancy, and give into the demands that the game be catered to, say, the top 5% of players.  So, the population will drop by 90%, some will always remain due to friends, etc – but most will disappear into the twisted nether.  So, from a current subscriber base of 11.5 million, you are now down to 1.15 million subscribers, each at $15 a month ($17.25m/month or $207m/year).  Not a bad income, right?

Now, lets look at the other side of the balance sheet starting with salaries.  Blizzard employs approximately 2700 people.  Salaries range from $40-65k/year for Artists and Designers, $50-90k/year for Programmers and Lead Artists, while lead programmers pull $70-100k/year.  Now, I know that not everyone makes these salaries, so for simplicity’s sake let’s average a flat $50,000/year per employee.  So, from your $207m yearly expense, drop a cool $135 million dollars.  That’s a hefty figure, but a nice $72 million remains for Blizzard’s coffers, right?  Not exactly.  We forgot to pay for the servers.  Currently, the best figure I can find for Blizzard’s server costs are $70 million/year.  But, we’re going to need fewer servers, so let’s drop that down to $25 million (going to need upgrades, service, and still need to pay for the server physical locations across the globe, and the price of electricity is rising daily.)

And, sure as characters die in WoW, we forgot the tax man.  US Corporate taxes are around 35%, but let’s assume the fiscal wizards we’re employing manage to get the effective rate down to 30%, then add the State of California’s 8.54% taxes.  That’s $62.1m and $17.7m respectively.  Now we’re in a field of tauren-pies! We’re in the red and we haven’t even begun to think about things like advertising, physical property (rent/purchase and upkeep on office space), Blizzcon, and murloc food.  Once the news of this hits out, you can expect there to be some sure things: the stockowners will hear of this and vote out the Board of Directors – and rest assured the first thing the new ones will do is to terminate the World of Warcraft.  No company, even of Activision Blizzard’s size, can endure a game operating at a loss for long.

And before you complain that I don’t know what I’m talking about, that Blizzard has other games that generate income, think about this for a minute.  I’m only discussing a cash flow situation here – the reason Activision bought Blizzard in the first place.  Blizzard does make other games, but the income is strictly one-shot material.  Revenues from these are in a state of constant flux (fast sales quickly dropping off), and a public company generates stock price growth with a steady income.  Drops in stock price are not conductive to current management remaining in place.  Also, remember that the numbers above are a low-balling of the expenses of Blizzard.  So, in order to keep the levels of income generating, insuring corporate management keeps World of Warcraft around, the elitist argument would require them to pay something on the order of $100 a month.  So, I ask you, oh End-Game-God: Is the game worth $1,200 a year to you, or would you rather be the sole owner of the Sword of A Thousand Truths for 6 months, and be on the next level of content when the casuals get into Firelands?

Like the post?  Feel free to spread the word – blogs, podcasts, etc.  On this, and any other topic, I’d really like your comments!

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