Raph's Website » Vivendi’s investor presentation

Vivendi’s investor presentation

September 1st, 2006 (Visited 3323 times) Tags:

Vivendi filed a investor slideshow with the SEC that gives some data on WoW and also their new Sierra Online Games division, which they recently pulled together. Things that pop out:

WoW’s East/West customer breakdown.
I surmise that the North American
population is likely under 1.5m,
given an even split with Europe?

WoW has 6.5m as of June 2006
Product investment per title is over 50m Euros. Another data point on the “how much did WoW cost?” debate. At today’s exchange rates, that’s over $64,160,177.07.
Their business model slide lists subscription and transaction for everything, including their MMORPGs. Microtransactions and upsells coming to WoW or future titles?
Over 1300 game masters.
Virtual worlds always grow based on a typical curve. It “scallops” slightly with major publicity events such as expansion releases and Christmas, but other than that, it’s really a function of velocity. Given that curve, we can see that WoW likely has not yet stopped growing. It has a tremendous amount of headroom in Asia, and maybe another couple of quarters worth of growth in the West. It looks to me like WoW will crest around 3.5m in the West. Asia is anyone’s guess; the curve can be severely “kinked” by the appearance of a major competitor, and Asia is more likely to create one of those than the West, in my estimation. But if the curve remains as it has, there’s every reason to believe that we will see WoW crest over 12m worldwide.
The picture on revenue per head is also much clearer, because of a slide that breaks it down by territory. A month of play in Korea is closer to $20 but it’s only $13.50 in Taiwan, and 60 hours of play (probably less than a month of playtime, given an average of 20 hrs per week) costs only $3.72 in China.
Trial editions, downloadable versions, pack-ins in other titles, and OEM versions seem to be in the plan. So do new territories, languages, and TV ads. And of course, there’s a slide pointing out that other Blizzard properties could move to MMO.

Meanwhile, Sierra Online is intended to become a major player in the casual online games space. The segment is broken into “mid-length session” and “short session,” with games like FreeStyle (a rather nice online street basketball game) falling in the mid-length part of that. Looks like they plan to leverage Vivendi IP such as Crash Bandicoot too.

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Faith wrote on September 1st, 2006 at 12:18 pm:

[...] Comments [...]

The Cesspit - WoW:WoW still growing? - Haven WoW Guild wrote on September 3rd, 2006 at 4:52 am:

[...] Raph does SirBruce and found another investor presentation from Vivendi. [...]

Zharalim.com :: Voir le sujet - WoW: Le mammouth wrote on September 5th, 2006 at 2:18 am:

[...] http://www.raphkoster.com/2006/09/01/vivendis-investor-presentation/ Une pr�sentation financi�re pr�sent�e � la SEC (organisme de r�gulation am�ricain) donne quelques infos sur WoW. - Cout du dev: 64M de dollars ($64,160,177.07 pour �tre exact) - 1300 game masters - 9000 serveurs_________________AC1 SC / AC2 FF: � la retraite CoH/CoV : @Quickette sur Freedom WoW FR : Sargeras - Deos (Hunter) - Cancelled [...]

WoW | The Cesspit. wrote on December 26th, 2006 at 5:23 pm:

[...] WoW still growing? Submitted by Innsmouth on September 2, 2006 - 13:47. Raph does SirBruce and found another investor presentation from Vivendi. [...]

Vanguard - State of the Game - Page 3 - Fires of Heaven Guild Message Board wrote on February 9th, 2007 at 12:34 pm:

[...] here. but anyway, no disrespect to you Kendrick. From Raph Koster’s blog, Septermber 1, 2006 Raph�s Website � Vivendi�s investor presentation [...]

Raph said on September 1st, 2006 at 9:38 am:

I promise, last WoW post in a while.

Solok said on September 1st, 2006 at 9:54 am:

Sir Bruce had an entry about this in June, looks like Bliz was trying to throw it’s weight around a little too, even though it’s public information.

http://www.mmorpgchart.com/ - story June 15

Solok said on September 1st, 2006 at 9:55 am:

“its” not “it’s”

Ryan said on September 1st, 2006 at 12:05 pm:

Keep the WoW posts up, they’re fascinating.

John said on September 1st, 2006 at 12:16 pm:

I was under the impression that WoW’s numbers were a total sum of players since launch, rather than current subscriptions.

Their language has always been ambiguous while stating numbers, which leads one to believe that is indeed the case. If it were true current subscriptions, why not just state that?

Raph said on September 1st, 2006 at 12:27 pm:

Their press releases have a very specific definition. What you’re describing is what usually gets called “registered users.” They use:

World of Warcraft’s Customer Definition
World of Warcraft customers include individuals who have paid a subscription fee or purchased a prepaid card to play World of Warcraft, as well as those who have purchased the installation box bundled with one free month access. Internet Game Room players that have accessed the game over the last seven days are also counted as customers. The above definition excludes all players under free promotional subscriptions, expired or cancelled subscriptions, and expired pre-paid cards. Customers in licensees’ territories are defined along the same rules.

The fact that cancelled and expired subs are listed there means that they really ARE that large.

Allen Sligar said on September 1st, 2006 at 12:44 pm:

Hmmm you really think 12m? I guess my gut feeling about them having “peaked” is seriously flawed. I guess if they can keep adding new players, Im just not “feeling” it when people say they can retain MMO veterans over the long haul, its a great game, its just not compelling to veteran MMO gamers. Good information though.

Raph said on September 1st, 2006 at 12:58 pm:

Well, just look at the graph, and keep in mind that all MMOs on an open-big trajectory have exhibited a hyberbolic or parabolic curve. You can see that the West curve will rise to maybe a bit under 3.5m if it stays on this slope; given a bounce at Xmas and at the expansion, I estimate 3.5 as a target.

The Asian numbers, however, have just hit the point where the growth per quarter is less than the growth in the previous quarter. So they have several quarters of growth ahead of them before the curve flattens. I didn’t try actually modeling it, so this was an eyeball thing, but it sure looks like 10m at least should be achievable.

Keep in mind, though, an event such as a major competitor can severely affect the slope of the curve, which is driven by both acquisition and retention.

MikeRozak said on September 1st, 2006 at 2:18 pm:

Another number that I heard somewhere is that the “average” WoW player stays 6-9 months. From this, you can guestimate how many people have tried WoW in total…

Area under curve is about 6.5M x 1.5 yrs / 2 = 4.9 M-yrs. 4.9 M-yrs / 7.5 months = 7.84 M. But that’s only a rough guestimate; there are some flaws in my mathematical model which would make this number lower than the real value.

Another approach (also flawed) is to say that any player that was playing 7.5 months (or more) ago is no longer playing, and that those that started within the last 7.5 months are included in the 6.5M. 7.5 months ago is 4Q05 and before, with a peak 5.5M, +6.5M => 12.0 M people have played WoW.

12.0M is probably the high side, while 7.84M the low side.

MMORPGChart.com shows that there are 12.5M subscribers, which implies that just about everyone who plays MMORPGs has tried playing WoW. (I don’t necessarily think this assumption is correct, but I could easily believe that 50%-60% of all MMORPG players have played WoW.)

In the past, WoW has been able to draw players from (a) people that already played MMORPGs, and (b) players that have never played MMORPGs. I’d guess that (a) is already exhausted. To use a trendy term, is (b) past its “peak oil”?

MikeRozak said on September 1st, 2006 at 6:54 pm:

I just thought of a problem with my last post, regarding the total number of MMORPG players.

Acording to MMORPGChart there are 12.5 million active subcriptions now, and 10 million a year ago… which implies 2.5 million new players over the course of a year.

I made a mistake when I assumed that 12.5 million active subscribers meant 12.5 MMORPG players. I suspect (and people can tell me if I’m wrong) that many/most MMORPG players aren’t subscribed all year round, but (for the sake of simplicity) are only subscribed for 6 months out of the year (on average). The other 6 months are spent waiting for a potential MMORPG to come online. A new MMORPG player, for simplicity sake, subscribes for 12 months in a row, not necessarily the same MMORPG.

That means that there are approx. 10M old MMORPG players * 12 months / 6 months + 2.5M new players = 22.5M MMORPG players, which means that only 40% of MMORPG players have actually tried WoW, which would mean that WoW could still tap into some residual of (a) (from my previous post).

Of course, these assumptions could be wrong.

Darniaq said on September 2nd, 2006 at 3:51 am:

I think it’s hard to use MMOGcharts in the first place. Some games listed there define their reporting differently. Others don’t report as frequently. It’s always been an interesting project, but it’s more a footnote to me than anything else. It just doesn’t answer most of the questions I have

In any case, the WoW numbers and Raph’s breakdown support a hypothesis I’ve had that they could hit 10mil subscribers. It’s not them hitting that in general though. Rather, I think they’ll hit it this year when Burning Crusade launches and compels back so many ex players.

Abalieno said on September 2nd, 2006 at 4:17 am:

I surmise that the North American population is likely under 1m, given an even split with Europe?

Uhm, how?

If the graph shows 2.7m for western customers and you hypothesize an even split, that would be more like 1.3m each. Or not?

What am I missing?

Raph said on September 2nd, 2006 at 9:26 am:

I surmise that the North American population is likely under 1m, given an even split with Europe?

Uhm, how?

If the graph shows 2.7m for western customers and you hypothesize an even split, that would be more like 1.3m each. Or not?

Whoops. I was thinking 1.5m, I think, and wrote 1m.

Abalieno said on September 2nd, 2006 at 9:48 am:

Yeah, you made me work on that for HOURS before I figured out that there was something wrong. I didn’t even notice it was the same presentation we commented months ago.

I went and started to write how WoW reached “zero growth”, wrote a whole post about it and then I noticed that it was all wrong… ARGH!

Anyway, after my breakdown I guesstimated NA players at around 1.8M right now, as the European players seem to be slightly behind (1.3/1.4M).

But I’m also skeptical about some of the data.