Systems of Curse and ZAM

The World of Warcraft ecosystem saw the final “big fansite” acquisition this week, with MMO-Champion bought by Curse Inc. Big meaning something that attracts millions of users each month. Curse have been using some of their $11 million of venture capital to buy up a variety of gaming fansites, including many popular WoW sites. But MMO-Champion is significant for 3 other reasons:

  • Corporate deal, not the “founder buy-out” traditionally commonplace among gaming fansites. MMO-Champion was previously owned by Major League Gaming, already a multi-million dollar enterprise (by comparison, $46 million funding).
  • Completes a duopoly (2 dominant businesses) in the core World of Warcraft “fansite” market – Curse and ZAM. While there are other large businesses and specialist niches on the fringe, none of those appear to be growing into the core WoW market.
  • Exposes an intriguing driver of this market structure: Systems costs – the underlying technology and support costs. Intriguing because these were crucial in determining the market structure of far more traditional sectors of the economy, like groceries.

This article analyses the latest acquisitions and discusses the unseen importance of systems costs. Continue reading “Systems of Curse and ZAM”

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A Strange Game

Deathwing. So it happened again. The player client software for the latest World of Warcraft expansion, Cataclysm, leaked into the public arena long before it was intended to become public. Again, because this also happened with the previous 2 expansions. A third leak is beginning to look careless.

WoW.com’s (unofficial) explanation of this “failure of secrecy” ironically fails to explain most of reasons behind the Cataclysm leak. Perhaps because the politics are rather too Machiavellian?

This article discusses the relationship between the game developer and its “fansites”. It uses the Cataclysm leaks to try and explain the underlying politics. The article questions why Non-Disclosure Agreements continue to be used, when they are worse than useless. Finally, it ponders the risks of such apparently one-sided relationships.

I’ve tried to present a fair and balanced analysis, which raises some important issues that aren’t getting discussed, and should be. Obviously, I can’t know everything. Continue reading “A Strange Game”

Animal Farm

Pandaren Monk We finally have some reliable figures for the commercial value of “minipet” micro-transactions in the game, World of Warcraft. Specifically, the sales of just 1 item: In November and December 2009, at least $2.2 million worth of Pandaren Monk pets were sold. 220,000 at $10 each. We know this because “50% of the purchasing price” was donated to charity, and “more than $1.1 million” was donated (via WoW.com).

Over 220,000 sales to a market of about 4-5 million potential customers (only active WoW players can use the minipet, and the pet does not appear to have been sold in China or Taiwan). Roughly 5% of potential customers spent $10 on an ostensibly useless vanity item: A small pet that follows you around, looking cute.

Like most virtual goods, the cost of making and selling this pet is marginal: Primarily some additional art and marketing time, all built on the back of existing systems (store, staff, world). The first 2 months of Pandaren Monk sales will have made contributions to Blizzard’s profits of about $1 million. That’s only around 1% of the business’s turnover in that 2-month period. But that 1% is “free money”. Blizzard (-Activision) would be doing a dis-service to its investors if it did anything other than continue to milk this virtual cash cow.

Apply a healthy bit of European cynicism, and it is easy to conclude a scam. Tobold‘s:

“Send me $10, and I promise to send $5 of it to charity.”

Of course, Europeans fundamentally don’t understand US philanthropic culture: The idea that it’s fine to exploit your fellow human and make outrageous amounts of money, so long as you give some of it away in the end. Some philanthropy is able to take a somewhat rational, balanced view of what is good for the world. But there is a tendency to support visually appealing issues, such as charities servicing the needs of children.

The purpose of this article is not to argue that a European, government-centric re-distribution of wealth is preferable to an approach lead by personal responsibility. (I’m not sure it is.) The problem emerging here is more fundamental: That virtual goods are replacing trade-able value with non-trade-able value. Non-trade-able value that, by definition, can not offset inequality in (game) society. Donating part of the price of sales to charity is pure irony. In true Orwellian style, we’re sleep-walking into a potentially broken social structure with the best of intentions.

This article started as a box during my Adventures in the Invisible Tent, but has been expanded here in much greater detail. This article describes what a minipet is, highlights the role of money to balance inequality in society, and explains the problem with virtual goods. Continue reading “Animal Farm”

Nation of Adoration

World of Warcraft’s seasonal holiday events temporarily reduce player interest in fishing. It’s always been the case, but the decline in fishing seems to be becoming more extreme over time:

Decline in Fishing Activity due to Holiday Events

The graph’s y-axis is the percentage decline in page views at El’s Extreme Anglin’ from the 7 days before each event, to the first 7 days of the event. Pageviews are a good proxy for overall angler interest. El generates hundreds of thousands of page views each week, so even small changes are significant. The x-axis orders events by date, from January 2008. The axis isn’t scaled correctly to show time, but holidays are fairly evenly distributed throughout the year. Events are shown by green dots, with a shortened date (month and year) and the name of the event.

The data is expressed as a percentage of the previous week, because while interest in fishing “waxes and wains” from year-to-year, changes week-to-week are normally minor.

All the events included last at least 7 days. Where one holiday runs concurrently with another event (for example, the “Lunar Festival” and “Love is in the Air” often clash), only the first event in the sequence is included. Interest in fishing also changes dramatically in the month new content is added, so events that clash with major fishing patches have been excluded (Noblegarden 2008 with patch 2.4, Hallow’s End 2008 with patch 3.0.2, and Noblegarden/Children’s Week 2009 with patch 3.1). Winter Veil is also excluded: The period leading to Christmas is particularly unusual – first students stop studying and have a lot of time to play, and then many players stop playing to spend time with family. This causes large changes in activity from week-to-week, which makes it hard to isolate Winter Veil in the data.

Only 12 separate sets of data can be compared. There is one out-lier – Midsummer 2008 – perhaps the early stages of Wrath of the Lich King testing may have caused a small traffic spike in the week before? The pattern shown on the graph is not certain. But I’m growing confident that events are increasingly impacting on fishing activity.

But why? Continue reading “Nation of Adoration”

Do You Fish in Real Life?

This article analyses the transfer of fishing activity between the physical and virtual worlds.

Do You Fish IRL? In Real Life. I dislike the phrase, because it implies that everything else is unreal. Yet many virtual environments trigger the same human emotions as the physical world. Very real indeed.

Google US search for 'fishing guide'. If you search US Google for the term “fishing guide“, the first result may surprise you. It doesn’t help to catch any of the 30,000 species of fish found on planet earth. And its author has bright pink hair.

This isn’t just a neat party trick. Nor an indication that I should write a real fishing guide. Nor a failing of Google’s search index: Google is directing such a generic search to a game-specific website because the search engine thinks that the majority of people searching for a “fishing guide” are looking for a World of Warcraft fishing guide. (The box below provides evidence.)

Perhaps, within the online sphere, virtual fishing is as important as conventional fishing? The caveat, “within the online sphere”, is crucial: Physical world anglers generally aren’t sat in front of a computer screen, while World of Warcraft anglers are. However, the internet is still widely used to find information about offline pursuits: The US Angler Survey found that 42% of those surveyed primarily learn about fishing from websites – more popular than print media. (The survey is presumably biased, because anglers that use the internet are more likely to complete an online survey – but still indicates the internet is a fairly important source of information for physical world anglers.) Of course far more people search for generic terms like “fishing” than anything WoW or guide-related. So game-related search does not dominate as much as it may first seem.

Searches for “fishing guide” are not the only way online anglin’ is merging with offline.

As the remainder of this article demonstrates, World of Warcraft anglers are up to 3 times more likely to fish in the physical world than the wider population: If you enjoy fishing “for real”, you are more likely to fish virtually than other players. This implies that the fishing activity transfers directly between the physical and virtual worlds. Continue reading “Do You Fish in Real Life?”

De-Analysing Blizzard’s Starcraft 2 Marketplace

Rob Pardo Earlier in 2009, Blizzard announced a non-commercial World of Warcraft add-on policy, which caused much discussion. Today at BlizzCon, Rob Pardo (illustrated) introduced the Starcraft 2 Marketplace: A future (after the game’s launch) system that would allow independent development teams to create custom “premium maps” for the game, and make money from them. That’s precisely what World of Warcraft add-on developers cannot do. So what’s changed?

Why Create a Starcraft 2 Marketplace?

Pardo stated:

“If you create a really cool map, with all original content, that’s awesome, you can put it up onto the service [Battle.net], and actually make money on your map.”

Blizzard is prepared to share a “portion” of the revenue if you create your own Intellectual Property, and don’t simply re-use their property. Seems reasonable.

The SC2 Marketplace is intended to allow parts of the mod‘ community to evolve from amateurs to professionals. “Fan made” maps were acknowledged as an important way to keep Starcraft alive – over time, players shifted from Blizzard-made maps to fan-made maps. But maps (Pardo used Warcraft 3 as an example) still tend to use Blizzard’s game assets (such as art textures), because creating original content takes a lot of effort. And passion alone does not pay the bills. By allowing map authors to earn money from popular maps, those people would be able to fund the creation of their own, original game assets.

There’s a real sense that Blizzard lost the chance to nurture and (commercially) gain from innovations within “their game engine”. Rob Pardo again:

“The Tower Defense maps came out of the Warcraft 3 community. And now you see Tower Defense in the PlayStation store…”

Earlier in the day Stompalina tweeted about the similarity between Battle.net (Blizzard’s community platform) and Steam (Valve‘s community platform). And she’s not wrong.

Both companies are unusual. They have both escaped from the traditional publisher-funded business model that underpins most major (non-casual/Flash) game development and distribution. Valve’s Steam originally gained popularity from games like Half Life, but has now become a method of distributing games written by others – everyone from small college/”garage” projects, to mainstream titles, like Total War.

Valve is already ahead of Blizzard in constructing a social-gaming platform, even though Blizzard was there first, and should understand the media better (from developing World of Warcraft). So perhaps opening up Starcraft as a semi-commercial platform for third parties is a new strategy in that race?

Why Not Create a Marketplace in Other Games?

SC2 Marketplace Illustration Competition with the wider gaming industry does not explain why Blizzard are so unwilling to adopt a similar approach within their other games. Some of us (and I include myself) would like to do this within World of Warcraft. I have previously demonstrated that WoW has a huge pool of talent among its players, and that pool of talent is increasingly reluctant to work within WoW because it has become afraid to make money. Something which we now all seem agree is required to support major (time-consuming) projects.

It is possible to create original IP within WoW. Technically this would be more difficult within a MMOG, because players that don’t buy your content, still need to interact with those that do. But there are creative methods of working round those limitations.

One possibility is that Starcraft 2 is a new product, which is politically (within Blizzard’s decision-making process) and technically (programmed to be supported from the outset) far easier to impose a new strategy on. And we might eventually see a more relaxed approach in Azeroth.

My fear is that World of Warcraft is being treated differently because its brand is to valuable at this stage in its life-cycle.

Shrewd observers will note that Blizzard have started “doing the Star Wars thing” with the WoW brand: The revenue directly from the game gradually becomes less important than all the merchandise and franchise opportunities. Soft drinks and Trading Card Games were just the beginning…

The problem for “fan-based” projects is:

  1. Franchise and license opportunities are not available to “the little guy”. They’re not the large businesses Blizzard look for.
  2. If you sell a license it has to be worth something. So a “fan project” cannot co-exist with a franchised project that it (often inadvertently) conflicts with.

There have been several examples over the last year where conflict has arisen. Unfortunately, I’m not able to publicly discuss all of them. Suffice to say the legal threats are very real: Suddenly one finds one’s self liable for lost earnings of the franchisee and Blizzard. That’s almost certainly more money than you have – few people are prepared to risk bankruptcy.

On the Road to Damascus

If Blizzard have had a change of heart, will anyone trust them? Sadly the answer is yes. Not least because individuals tend to confuse the company with its products. And the corpses of all those fallen add-on developers decay fast.

A marketplace doesn’t fit Blizzard’s culture – somewhat secretive, protective, and controlling of its work. But Blizzard seem very similar to Apple. And Apple have managed to sustain a very successful iPhone store, full of applications created by independant developers. If both parties benefit, these uncomfortable partnerships can thrive.

Perhaps there is hope after all?

Postscript

The following day, in an interview with DirectTV, Rob Pardo was asked this question directly: Why Blizzard are endorsing commercial SC2 mods, while they have just outlawed commercial WoW mods? His reply was:

“We’re not making money from the people that are doing third party things for WoW. It’s not really allowed to go out and make stuff around WoW without licensing it from us. It’s really us just protecting our Intellectual Property.”

Favorite Fishing Places

This article analyses the favourite fishing locations of World of Warcraft anglers. Both where and why.

The most popular single zone is the Grizzly Hills, with Azshara’s Bay of Storms and Wintergrasp in joint second place. Reasons are split into artistic (music, scenery), emotional (relaxation, memories), practical (fish caught, convenience), and social (companions, player interaction) themes. Overall, each theme has similar importance. The article discusses the apparent contardiction between desires for solitude, and to be surrounded by life.

This is the second of several topics that explore the reasons people fish in a virtual world, ultimately drawing parallels with fishing in the physical world. Continue reading “Favorite Fishing Places”