Blizzard's Diablo III Giveaway Designed to Protect World of Warcraft Revenue

At Blizzcon this weekend, Blizzard Entertainment dropped a bombshell—commit to signing up for a year of World of Warcraft, and you can have the upcoming, hotly-awaited Diablo III for free. For WoW subscribers, it's a great deal—Blizzard is giving the game to people in exchange for a promise to do what they were going to do anyway. The true genius of the offer is that it's also attractive to Diablo fans. Buy Diablo III for $59.99, and receive a year of World of Warcraft for just $9.99 a month.

It's a great offer either way—but it's also a sign that Blizzard is becoming concerned about the long-term staying power World of Warcraft. During Activision's Q2 conference call in early July, company president Michael Morhame noted that the game had 11.1 million subscribers as of June 30—down from over 12 million players in October. Morhame confirmed what we hypothesized a year ago, saying: "what we have seen is that subscribership tends to be seasonal and driven by content updates. So as we're heading further away from an expansion launch, it's normal to see some declines."

If early screenshots are accurate, Mists of Pandaria will feature more original art than any Blizzard expansion ever.

The pace of those declines, however, is increasing—something Morhame claims is driven by the rate at which players burn through content. As our players have become more experienced playing World of Warcraft over many years, they have become much better and much faster at consuming content," he said at the time. "And so I think with Cataclysm they were able to consume the content faster than with previous expansions, but that's why we're working on developing more content. We believe that this new in-game content will keep the game fresh for current players, and provide compelling reasons for lapsed players to come back."

Morhame's explanation may be true, but we're not convinced it's the only factor at work. There are two systemic challenges chipping away at World of Warcraft, and they're more significant than the pace at which players chew through content: First, there's the fact that WoW is, by any measure, a mature game.

That's not a bad thing—but it means that gamers hunting for the Next Big Thing aren't playing WoW. Blizzard has done a great deal to reinvigorate the game, including redesigning most of the core world in Cataclysm, but there are certain core design concepts the company can't change. Any attempt to do so would court disaster, as Sony aptly demonstrated when it overhauled Star Wars: Galaxies with the infamous New Game Enhancements.

The second issue is more subtle:  WoW isn't as challenging as it used to be. Few people mourn the days when only huge guilds with more than 40 raiders could attempt end game content, but Cataclysm made leveling absurdly easy—then yanked the difficulty meter too far in the opposite direction in the early dungeons.

Part of the reason dungeons felt so difficult, to be blunt, is that players had gotten lazy—by the end of Wrath of the Lich King, jumping into a random group and running a dungeon took ~20 minutes with no need for crowd control, tactics, or much in the way of forethought. Cataclysm combined 10 and 25-man raids, which helped make content accessible to everyone—but doing so cheapened the psychological reward of finishing the raids. If WoW began life as a banquet where only a handful of people got to eat the main course, it currently feels like an all-you-can-eat buffet of McDonalds food. Anyone can have as much as they want, but it doesn't taste as good.

Pandaria is an ancient land where the pursuit of harmony and balance matter more than one's factional allegiance.

Certain features of the just-announced Mists of Pandaria suggest Blizzard is fully aware of both issues. The 'Challenge Mode' dungeons Blizzard is introducing are likely meant to inject some difficulty back into the game without cutting people off from raid content, while the decision to create a new continent with an entirely different artistic style and a new class to go with it are both aimed at injecting fresh life into an established formula. It's also entirely possible that Blizzard created the Annual Pass offer because it's afraid of losing players to Diablo III, as opposed to a product from one of its competitors. Regardless of the reason, this is by far the most aggressive thing the company has ever done to protect its Wow-related revenue stream, and it speaks to the difficulty of keeping any game appealing after such a long time.