Spencesite

How WoW is wow’ing the market

// January 3rd, 2008 // Emerging Tech

In an earlier post, I discussed how the gaming industry was impacting the software industry. Here we take a look at a concrete example of one game that has caught the attention of big business…

The most popular MMO, World of Warcraft, most often referred to as “WoW” by its community, recently announced that it had reached a benchmark of over 8 million subscribers, 3.5 million in the US and Europe, with another 3.5 million in China. Doing the math, and accounting just for US and European subscribers who pay the full $15 per  US month subscription, that will eventually equate to some $49M in monthly revenue for Blizzard Entertainment,, the company which created WoW.  And that’s just subscriber income. WoW periodically releases expansion packs which cost an average of $40 US per  unit. Blizzard  sold over 2.4M copies of its latest expansion pack in one day. For those counting, that’s $96M US in revenue in a single day of sales. To to add it up: if Blizzard  maintains just  its current player base, and if we only count US and European subscribers (Chinese subscribers pay either 1/3 of their Western counterparts, or by the hour, so it’s difficult to calculate the actual revenue figures from there), you end up with to-date sales figures of:

Unit Sales Revenue:
Base Game Unit Sales:  $175M
Expansion Pack Sales:  $96M
Total One-Time Sales:  $271M

Recurring Revenue:
Subscriptions (US/Europe):  $52.5M per month ($630M annually)

A new study by Screen Digest suggests that to date, Blizzard has realized revenues of $471M on WoW.

Now, consider this: in 2005, the gaming industry was estimated to have revenues of $32.6B. That revenue is expected to double by 2011 to $65.9B. For some perspective, that would be more revenue than the cinema, video, DVD, and television rights, combined, for all of 2005.