Activision Blizzard, the Lawsuit, and the Q2 2021 Financials

You don’t want to do that either. You think you do, but you don’t.

-J. Allen Brack, BlizzCon 2013

I am pretty sure that J. Allen Brack would be pretty happy just being known as the guy who arrogantly pissed all over, and probably helped delay, the huge money maker that WoW Classic turned out to be.

I am pretty sure both he and the company wish that statement was worst thing to come out of BlizzCon 2013.

But yesterday saw him step down as President Blizzard… a polite way to say he was the first big sacrifice in the wake of the California Department of Fair Employment and Housing hostile workplace lawsuit.  He was joined by the SVP of HR, Jesse Meschuk

Not that he didn’t deserve it.  Sure, a lot of the most egregious behavior happened on Morhaime’s watch, but Brack was still in the thick of things, still a leader in the company during that time as well.

Brack was replaced by new Blizzard “co-leaders” Jen Oneal and Mike Ybarra, both of whom have roots outside of Blizzard.

For those of you who like the “Bobby Kotick is cementing his dominion over Blizzard” narrative, it has been noted that Morhaime was CEO of Blizzard, Brack was President of Blizzard when he replaced Morhaime, and Oneal and YBarra are co-leaders now, whatever that means.

And the Brack announcement went out in advance of the Activision Blizzard Q2 2021 financial results announcement, no doubt following the theory that you get bad news out of the way before and hope that you have good news during and after.  So was it a good thing that Kotaku pointed out that the company is losing T-Mobile as a sponsor of their Call of Duty and Overwatch esports league before the call as well?  And then there was the expected shareholder lawsuit.

Which brings us to the report.  You can find the detailed financials, the presentation, and the recording of the call over at the investor relations page.

The presentation opened right up with five actions the company is taking in light of the lawsuit and the protests both from outside and within the company.  They are:

1. We have asked Jennifer Oneal and Mike Ybarra to assume responsibility for development and operational accountability for Blizzard.
2. We will continue to investigate each and every claim and complaint that we receive. When we learn of shortcomings, we will take decisive action. To strengthen our capabilities in this area we will be adding additional staff and resources.
3. We will terminate any manager or leader found to have impeded the integrity of our processes for evaluating claims and imposing appropriate consequences.
4. We will be adding resources to ensure and enhance our consideration of diverse candidate slates for all open positions.
5. We have heard the input from employee and player communities that some of our in-game content is inappropriate. We will be actively reviewing that content and removing it, as appropriate.

Again, this is a change from the stubborn defiance that was the hallmark of the initial response from the company, but is unlikely to be enough in itself to soothe anybody.  The employee organizers are still not buying the company’s new tack.

When it came to the numbers, all three pieces of the company saw a decline in revenue from Q1 2021, though that is not unexpected given the roll back in pandemic restrictions we saw midway through the quarter.  People went outside and did things, a trend that will no doubt continue into Q3 if the price of airline tickets and rental cars are any indication.

Activision Blizzard Q2 2021 Financial Results Presentation – Slide 11

Blizzard alone was down $50 million in revenue when compared to Q1, which was a direct hit to margins.

When it came to singing Blizzard’s praises, the song remained the same, a tale of Azeroth making the money while other franchises languish.

Activision Blizzard Q2 2021 Financial Results Presentation – Slide 7

WoW bookings doubled year over year, with much of the credit going to the launch of Burning Crusade Classic.  A lot of people bought that pack with the lizard mount.

Hearthstone kept on rolling as well, cranking out yet more expansions.

And while Diablo II Resurrected holds promise for the company, Diablo IV is still on the distant horizon and Diablo Immortal has been pushed back again, this time to the first half of 2022.  We could see a four year gap between when it was announced at BlizzCon 2018 with a playable demo and when it finally ships.

Meanwhile over at Massively OP, where they have been keeping score, the running tally of monthly active users for Blizzard continued its downward trend, with the company shedding another million users.  We don’t know where they came from or where they went, but they aren’t hanging out in Blizzard games anymore.

After being down in revenue and players in Q2, we have yet to reckon with Q3 and the iceberg that is the California lawsuit.  The only thing Blizz has in the near future is Diablo II Resurrected and some likely misguided hope about “stronger engagement” with the Shadowlands expansion.  But people were already leaving retail WoW for FFXIV before the shit hit the fan.

I appreciate that Activision Blizzard seems to have finally decided that they need to clean house, though the cut off for responsibility is clearly enforced before you get to the C-level suite, but the company clearly needs to step things up a couple notches or the Q3 results will be a bloodbath.

Blizzard Still Depends on WoW but is Pinning Some Hope on Diablo II

It was time for the Activision Blizzard Q1 2021 fiscal reports, so we can once again see what the company is hyping and what they are mysteriously failing to mentions.  You can find everything I reference on the Activision Blizzard investor relations site.

As usual, it is nice I guess that Activision is doing well with yet another spin of the Call of Duty wheel and that a bazillion people still play Candy Crush Saga, but my interest resides in Blizzard camp where they continue to talk up World of Warcraft and WoW Classic.

Overall revenue was down from Q4 2020, but that was also when Blizzard launched the Shadowlands expansion, which is usually a peak item in their financials.

Activision Blizzard Q1 2021 Financial Results Presentation – Slide 9

Margins are very good, but the only title they mention is WoW, while pointing towards “product timing” as a drag on the overall numbers.  Somebody else isn’t pulling their weight.

Details from the quarter again rely heavily on WoW.

Activision Blizzard Q1 2021 Financial Results Presentation – Slide 7

Shadowlands and the coming of Burning Crusade Classic are up top, followed by another Hearthstone expansion.  But there is always another Hearthstone expansion, isn’t there?  They’ve had so many they’ve got Hearthstone Classic option in the game now.

The only “hope for the future” item on the list that isn’t invested in Azeroth is Diablo II Resurrected, which I will admit I am a bit hyped for myself.  And then there is Diablo Immortal, which continues to take its sweet time getting to a point where it can launch.

After that we have Overwatch League and nothing else.  We heard last report that Overwatch 2 and Diablo IV are not slated for this year.

Meanwhile, the reported MAUs, monthly active users, for Q1 was 27 million which, according to Massively OP, which has been keeping track, down 29% from the Q1 2018 peak of 38 million.  If WoW is still booming… and carrying the company… that means 10 million fewer people are engaged with other Blizz properties.  For those interested, slide 13 defines MAUs as:

Monthly Active Users (“MAUs”) We monitor MAUs as a key measure of the overall size of our user base. MAUs are the number of individuals who accessed a particular game in a given month. We calculate average MAUs in a period by adding the total number of MAUs in each of the months in a given period and dividing that total by the number of months in the period.

An individual who accesses two of our games would be counted as two users. In addition, due to technical limitations, for Activision and King, an individual who accesses the same game on two platforms or devices in the relevant period would be counted as two users. For Blizzard, an individual who accesses the same game on two platforms or devices in the relevant period would generally be counted as a single user. In certain instances, we rely on third parties to publish our games. In these instances, MAU data is based on information provided to us by those third parties, or, if final data is not available, reasonable estimates of MAUs for these third-party published games

Since I played WoW and WoW Classic a bit each month over the last quarter I guess I count as two users, which seems to imply that Azeroth is possibly propping up the MAU count even more than I might have suspected.

Massively OP also has some notes from the investor calls including some inconsistencies from the company.

Anyway, that is what we have from Activision Blizzard for Q1 2021.

WoW Carrying Blizzard Again in Q4 2020 Results

On Thursday afternoon Activision Blizzard held their investor relations presentation for their Q4 2020 and 2020 overall financial results.  You can find the presentation, financial results, and the recording of the inventor call on their investor relations site.

There was considerable good news for the combined company.  The Activision side of the house did especially well with their Call of Duty releases in 2020.  While that is always their big title, 2020 saw revenues for the franchise doubled, giving the Activision team a very merry Christmas indeed.

Activision Blizzard Q4 2020 Financial Results Presentation – Slide 12

Kind was up a bit, though they seem pretty consistent from quarter to quarter.

And then there was Blizzard, which did very well with World of Warcraft and the Shadowlands launch, but which was down somewhat year over year, which they blame on there being no BlizzCon and a decline across other titles.

The BlizzCon aspect probably shouldn’t be a surprise.  While I doubt it adds much in the way of net profit… it costs a lot to setup, leaving aside the amount of lost productivity it no doubt causes within Blizzard… selling 40K tickets at $250 a pop, plus however many $50 virtual tickets is still a lot of cash flowing into the company.

Meanwhile, the other titles statement seems to confirm what I was going on about in Q3, which is that we seem to have come full circle and are now back to a Blizzard where there is World of Warcraft and then there is every thing else.  WoW has been on an uptick since WoW Classic launched and Blizz is saying Shadowlands hasn’t started tanking yet, so that is where the money is.  WoW pays the bills.

And it looks like it will be that way for a while as the presentation doesn’t have a much of anything else in the forecast for Blizzard.

Activision Blizzard Q4 2020 Financial Results Presentation – Slide 7

The promise of Diablo Immortal is still out there.  I’ve read a report from somebody in the regional testing that was pretty favorable about the title, it being basically Diablo on your phone.  But it really has to ship to make some money and we’ve been wondering when that is going to happen since BlizzCon 2018.

And then there is BlizzConline coming up.  Unlike BlizzCon, this is free to watch, so no direct revenue boost is expected, though they will no doubt hype up the gear store and such.  The big deal is the future plans.  Where are the non-WoW franchises going and are we going to see anything new?

Otherwise, there isn’t even a Hearthstone expansion on the list.  Maybe they are holding that for BlizzConline.  They said on the call that we wouldn’t be seeing Diablo IV or Overwatch 2 in 2021.  In summing up BlizzCon 2019 I thought I was being a bit caustic suggesting that Diablo IV wouldn’t arrive until 2022, but there it is.

And how is Overwatch 2 not out yet?

I don’t follow Overwatch that closely, but back at BlizzCon 2019 they were talking about it like it was almost ready.  It is mostly a PvE campaign, right?  But then I guess Diablo freakin’ Immortal isn’t out yet either and that looked ready to go at BlizzCon 2018, so clearly we need to allow a lot of lead time for announcements involving anything besides WoW and Hearthstone.

Other Coverage:

• Massively OP – Includes notes from the call
• VentureBeat

 

Blizzard Hangs On During a Quiet Q3

We got the 2020 Q2 financial results for Activision Blizzard yesterday, and it confirmed that the video game market is still doing pretty well.

Overall the combined company had a very good Q3 2020, well up over last year, though much of the good news came from the Activision side of the house, where they were still riding the Q2 Call of Duty launch for all it was worth.  The company is even talking about hiring 2,000 more people to keep up with demand.  That is a long way from the 2018 results when they were cutting staff.

Activision Blizzard Q3 2020 Financial Results Presentation – Slide 9

The Activision team was up almost 3x over their Q3 2019 net revenue.

Blizzard, while up, was only up a small amount over Q3 2020.  However, Q3 2020 was the start of the Blizzard revival where, after two quarters in the doldrums, WoW Classic launched and revived their fortunes.

Meanwhile, Q3 2020 was in something of limbo state as the Shadowlands expansion was slated for a Q4 launch.  There was little new to entice people players back.  There wasn’t even the expansion pre-patch to raise some excitement.

But the slide deck rightly looks for Q4 2020 to be a big deal.

Activision Blizzard Q3 2020 Financial Results Presentation – Slide 7

Blizzard got the Shadowlands pre-patch out earlier this month, unveiling the big level squish for all to see and experience.  And now we have a date for the start of the expansion pre-launch events, November 10th, and the launch of the expansion itself, November 23rd.  Blizzard will be able to recognize revenue on all those pre-orders the day it launches.   The is usually a pretty big ka-ching moment.

However, outside of World of Warcraft there isn’t a lot of big news.  Hearthstone carries on, with a new expansion on the way.

Overwatch remains popular, though a year after the Overwatch 2 announcement it doesn’t feel like much has changed.  I flagged Overwatch 2 as one of the “big four” announcements at BlizzCon 2019, but I don’t pay enough attention to the game to know what has gone on since then, except for the fact I haven’t seen any headlines about it lately.

Diablo IV remains somewhere in the distant future.  I think I said 2022 last year when it was finally announced, and I might have been optimistic with that call.

And then there is Diablo Immortal, perpetually in some new stage of testing, but never quite ready to launch.  It can’t fail it they never release it I guess.

So Q4 is almost guaranteed to be big for Blizz, but unless Shadowlands gets more traction than Battle for Azeroth did, there isn’t a lot else to depend on after that.  For all the other franchises, it is still WoW that carries the load.

You can, as always, find all the numbers over at the Activision Blizzard investor relations page.

Blizzard Continues Its Pandemic Profit Roll in Q2

We got the 2020 Q2 financial results for Activision Blizzard earlier this week and it confirmed what many had probably already guessed; people staying home play (and pay for) more video games.

So, not really a surprise that they did well, though I am sure senior execs from Bobby Kotick on down will claim that their leadership was the magic ingredient.  It is always their work that causes anything good and unavoidable market conditions that cause anything bad.  So the execs get huge bonuses and the employees… well… and it isn’t just people on the Activision side of the house.

Anyway, as the presentation shows, revenue was up year over year.

Activision Blizzard Q2 2020 Financial Results Presentation – Slide 10

Of course, things were looking pretty meager a year ago, with the 2019 Q1 results showing people had fallen away from Battle for Azeroth with Q2 reviving slightly… margins up from 16% to 20%… on anticipation of WoW Classic and the Rise of Azshara update which unlocked flying in the expansion.

It wasn’t until the Q3 results that included the launch of WoW Classic that things began to look better.  And then, of course, the national disaster of the pandemic hit and kept everybody home.

So things are looking up for the company.  Surprising to me is the lack of depth in the portfolio at Blizzard and across the company.  The only thing new in Q2 was the Call of Duty: Warzone battle royale addon to the Call of Duty franchise and the promise of the Shadowlands expansion for WoW some time this year.

Activision Blizzard Q2 2020 Financial Results Presentation – Slide 7

Of course, maybe that shouldn’t surprise me.  Activision is mostly Call of Duty these days, and Blizzard has some other titles, but WoW is still the revenue juggernaut and when it sags there isn’t anything to take up the slack.  A new card pack for Hearthstone isn’t going to make a huge impact at this point and Diablo: Immortal still seems to be far from going live.

So I expect things will remain upbeat so long as we’re all encouraged to stay home as much as possible, and there no doubt be a spike when the Shadowlands expansion launches in Q4.  But the company remains the same.  It is WoW and everything else.

For those interested, the financial data, presentation, and audio of the conference call, can be found on the Activision Blizzard investor relations page.

The Restoration of Blizzard Margins and the Resurgence of WoW

What a difference a year can make.  Back in May 2019 I was writing about the sorry state of margins for the Blizzard portion of the Activision-Blizzard-King combo.

The numbers for Q1 2019 were somewhat grim for Blizzard.  While they brought in $344 million in revenue, the operating income… the profit… was only $55 million, giving them a 16% margin, which is horrible for a software/service company.  They were lagging behind King, which made more money and had a higher margin, and Activision, which made less money but still ended up with a higher operating income and thus a higher margin.

What was going on at Blizzard?  We had the meager offerings of the 2018 BlizzCon still fresh, with Diablo: Immortal being the centerpiece announcement.  StarCraft and Heroes of the Storm were on the outs.  Overwatch was slipping.  And the jewel in the Blizzard crown, World of Warcraft, was having a tough time holding on to people due to the myriad annoyance of the Battle for Azeroth expansion.  It was a bad time for the company.

Things began to turn around for Blizzard when WoW Classic hit late in 2019.  But it took the events of Q1 2020 to really boost Blizzard’s fortunes.

I feel like I should quote an exchange early in the movie Schindler’s List, where he talks about this missing ingredient that had kept him from business success in the past.  For him it was war, for Blizzard it was COVID-19.  Winter was keeping some people at home already, but worries about the virus and stay at home orders in many parts of the world helped fuel Blizzard’s quarter.

It was visible on the WoW servers, where things felt more crowded, and on the WoW Classic servers, where login queues and free server transfers appeared again.  As they laid it out on slide 8 of the presentation:

• After doubling in the second half of 2019, World of Warcraft’s active player community increased further in Q1, as the team continued to deliver more content between expansions than ever before
• Reach and engagement were particularly strong as regions introduced shelter-at-home measures through the quarter, with momentum increasing further in April
• Increased engagement in modern WoW drove accelerating pre-sales for the upcoming Shadowlandsexpansion, slated for the second half of this year

While they had some modest praise for Hearthstone and Overwatch,

• Hearthstone engagement improved sequentially, driven by the new Battlegrounds mode launched in November, and strong execution in live operations
• Overwatch engagement increased meaningfully in March as its latest seasonal event coincided with stay-at-home effects

The words “sequentially” and “meaningfully” are pretty soft.  And then there was a mention of Diablo: Immortal, which may ship some day.

• Diablo Immortal , developed for mobile in partnership with NetEase, remains on track to begin regional testing in the middle of the year

Given that, WoW was clearly the shining star this quarter, which led to the following revenue numbers.

Activision Blizzard Q1 2020 Financial Results Presentation – Slide 10

Blizzard is actually in third place for overall revenue out of the three company units, but that revenue was up by $108 million over last year and the increase was all profit, so that on the actual income line Blizzard was ahead of its two stable mates with a huge jump in operating margin.

Of particular note to me was the measure of Monthly Active Users, MAUs, between Q1 2019 and Q1 2020.  They were both the same, ringing in at 32 million active users.

For me, that seals the deal on my assertion that MAUs are a bullshit metric… or would have sealed the deal if I wasn’t already of that mind.  Any metric that stays flat as when revenue is up nearly 25% and margins have nearly tripled clearly isn’t measuring anything worthwhile in the case of a company like Blizzard.  The company ought to be embarrassed by the need to explain how detached their favored metric is.

And the future seems fairly bright for Blizzard in Q2.  As they noted, momentum was increasing in April, with people still at home and Blizz keeping some incentives, like the 100% xp boots, like to tempt people to work on just one more alt.

And beyond that… well, the Shadowlands expansion is coming, and any WoW expansion delivers a boost to revenue no matter how bad it is viewed after the fact.  They did say on the call that the target for Shadowlands is currently Q4 2020, so no August/September release this time around.  (Quote here) But unless they totally drop the ball with the expansion, Blizz looks like they are pretty well positioned for 2020 and into 2021.

The information, financial reports, presentation, and recording of the investors call can all be found over on the Activision Blizzard investor relations page if you wish to scope it out yourself.

Why Fan Expectations for Blizzard are Hopeless

Fallout from BlizzCon and the Diablo Immortal announcement continues and some fans who feel betrayed by it are now looking at every Blizzard word and action trying to find new reasons to be angry at the company.

Time for the daily minute of hate

There was that whole statement made, then retracted, about Blizzard having planned to show a trailer for Diablo IV at BlizzCon.  Blizzard keeps coyly stating that they have “multiple” Diablo project ongoing, but their refusal to give us a hint as to what is really in the bag just gets more frustrating every time they repeat it.  It is feeling less like a reassurance and more like a taunt every time they say it.

And then there was Allen Adham’s statement at a press conference:

Many of us over the last few years have shifted from playing primarily desktop to playing many hours on mobile, and we have many of our best developers now working on new mobile titles across all of our IPs. Some of them are with external partners like Diablo Immortal. Many of them are being developed internally only, and we’ll have information to share on those in the future.

That practically the hair of enraged on fire.

The statement was quickly interpreted and repeated as Blizzard moving on to only doing mobile titles, with all their good developers are working exclusively on mobile, and that Blizzard is essentially abandoning PC and console games to whatever interns happen to be handy to take over the reigns.

This panicked point of view both accepts and ignores the long history of Blizzard.  Ben Kuchera did an excellent article over at Polygon about how Diablo Immortal broke the “rules” of Blizzard.  The essence is that Blizzard only ever makes games that are improvements of existing titles, trotting out the evidence with which many of us are already familiar, summed up in this list:

• World of Warcraft: Blizzard does Everquest!
• Warcraft: Blizzard does Dune!
• Overwatch: Blizzard does Team Fortress 2!
• Hearthstone: Blizzard does Magic: The Gathering!
• Heroes of the Storm: Blizzard does Dota 2!

Unfortunately, he missed a key aspect of the Blizzard story.

While it is absolutely true that Blizzard does this, they also only do this whole improvement cycle for games they are actively playing.

I was just reading David Craddock’s Stay Awhile and Listen Vol. I, received as part of my Kickstarter pledge for Vol. II, which details the early days of both Blizzard and Condor.  Blizzard’s first big title was the original Warcraft, which was, as note above, an improvement over the game Dune, which the team had played and loved.  Condor, which was purchased and became Blizzard North, was working on the original Diablo, which was a graphical version of Rogue, incorporating the random levels and monsters and loot ideas from the text game, which the key people at Condor had played to death in college.

Ben Kuchura, while mentioning David Brevik and his plans for an action RPG in his article, missed the whole Rogue angle.  It should be on that bullet point list above as “Blizzard does Rogue-like RPGs!”

So Blizzard doesn’t just improve games that are already out there, they improve games they actively playing and enjoy.  So you can see from the list above not just what they did, but the games they were playing and passionate about that got them on track to make the Blizzard versions.

And we’ve had ample evidence of this, up to and including not only tales of the Blizzard dev team recruiting from their EverQuest guild but a full on homage to EverQuest as their inspiration for WoW as part of the keynote of a past BlizzCon.

So you can see the problem here.  Blizzard devs play a game, love it, then make their own improved version.  And what happens after that?

Sure, sometimes they play their own game and realize they can do better.  Warcraft begat Warcraft II which begat Warcraft III as the tech and the team capabilities improved.  Likewise, Diablo led to Diablo II.

But when the game is good and the devs aren’t inspired to improve it because they like it as it is or have moved on, where do you go?

You get things like StarCraft II.

StarCraft II isn’t a bad game.  But the design is so close to StarCraft in so many ways that is feels like it was made just to get the original on a better engine rather than evolve the franchise in any significant way.

Likewise Diablo III, also a decent game, started off with some bad ideas likely because it was made by people who didn’t get the core of Diablo II.  When your core fans are complaining about the game being too light and colorful and that the itemization sucks… and that the cash money auction house is killing the game and looks like a cash grab… it might be better to pay attention rather than dismiss them.

But Blizzard rarely pays attention to fans.  They make the games they want to make because those are versions of the games they already play.  Clearly there wasn’t a big Diablo contingent left at Blizzard when Blizzard North left the building over a dispute with how Vivendi was pushing them towards things they didn’t want to do.

And we see it with World of Warcraft with every expansion.  In 2004 they launched something based off of the EverQuest template.  Since they they have fumbled about looking for ways to improve things.  When you’re making a product, you have free reign over ideas.  But when you have a product in production you suddenly have to listen to the customer support team and the GMs and IT team and whoever else has to keep things going every day.  You stop being as focused on innovation and start solving complaints to keep people from tying up the support line.

World of Warcraft was an improvement for MMOs the way the mini-van was for family transportation, replacing EverQuest the way the mini-van replaced the station wagon.   But after that you just refine.  The Blizzard team is adding cup holders and such.  And it isn’t because of the live team, B-list developer rumor perpetuated by angry fans.  It is because Blizzard mostly got what they wanted on the first pass, but the game made, and continues to make, so much money they felt they had to keep extending it.  You don’t walk away from a billion dollar a year game.

And so it goes.  Blizzard is never going to make another MMORPG because what would they copy?  They are never going to make another RTS because what would they copy?  It isn’t even a matter of competing against themselves as, say, another collectable card game would inevitably do.  It is simply that once you’ve made the game you really want and refined it a bit, you’re done.  After that you just fiddle and add some content or features to generate some more revenue.

So what does Blizzard do now?

They find a new game to copy and refine.  In this case, as Allen Adham stated above, the senior developers have been playing a lot of mobile games.  What does Blizzard do historically?  They copy and improve the games they are currently playing.  So this statement is a clear indicator where Blizzard is going.

The odd bit is the deal with NetEase.  That is not something Blizzard does.  So my guess on that front is that Diablo Immortal is a move more to sate the board of directors and the large investor groups than what they really want to do.  Blizzard is part of a publicly held corporation and has to bow to the whims of the shareholders, and we know rule by the masses rarely leads anywhere fruitful.  The only mistake was thinking Diablo fans would give a shit about it.

I suspect that, at best, this is Blizzard setting their mobile baseline and learning the ropes from NetEase while they work on the mobile game they really want to make… and grab some of the China market along the way, since the Chinese government is no longer approving foreign video games for domestic consumption.  But the end result, given what Allen Adham said, is that the next real Blizzard title… not Diablo Immortal, but whatever it is they are actually working on down in Irvine… will be a mobile title.

It isn’t a cash grab or a betrayal, it is just the way Blizzard works.  It is how they harness their passion for what they do best.  It is following the same system that made them the company they are today.  You can’t put a gun to their heads and force them to be passionate about WoW or Diablo again.  It just isn’t possible.  The moment has passed.

The actual cash grab is the stuff that likely interests fans more.  StarCraft Remastered.  Warcraft III Reforged.  World of Warcraft Classic.  Those are milking the fans by attempting to relive past glories.   Remastering an old title to stoke nostalgia is an excellent way to get money from your installed base.

I am not saying Blizzard doesn’t love those titles, that there isn’t a ton of affection for the days when WoW or WC3 were fresh and new.  You could see that passion at BlizzCon, when the devs on those projects… often devs who started at Blizz working on those titles… were talking about them.  But there isn’t a long and successful and lucrative tradition where Blizzard remakes one of their own titles fifteen years later.

So we will eventually get a “real” Blizzard mobile game… because, again, Diablo Immortal isn’t it… that might make people rethink mobile games.  And we will get the remakes and remasters, which will make the old school happy.

And maybe we’ll get a Diablo IV.  But it won’t be anything new.  At best it will be a good refinement based on lessons learned from Diablo III, the same way all the other games Blizzard has essentially “finished” keep going.  At least that is the way it looks to me.

BlizzCon Yawns 2018

Well, BlizzCon has come and gone and some of it was pretty tepid.

BlizzCon 2018

My rough draft title was just “BlizzYawn 2018,” but it wasn’t all that bad.

As I have said in the past, the problem with BlizzCon is in part because it was effectively WoWCon for a number of years, so if you were a WoW fan you had a lot of people catering to your needs and whims during that time.

Now with six franchises sharing the spotlight, if you are only interested in one of the titles, and they split the coverage evenly, 83% of the show is not of interest to you.  Nobody is getting all the attention, or even most of the attention anymore.  And if your title doesn’t even get equal time… like Diablo last year and StarCraft almost every year… or if what Blizz shows isn’t anything you’re interested in… like Diablo for a lot of fans this year… then you’re not off base to feel left out.

Anyway, I spent a bunch of time watching with the Virtual Ticket and I still found a lot interesting, even if a lot more wasn’t for me.

Opening

Mike Morhaime came out to open the show and greet everybody as he does every year. However, this time it was a farewell tour. He introduce J. Allen Brack, new CEO of Blizzard, got a handshake, and was sent off stage left for likely the final time on stage at BlizzCon.

I am still not sure how I feel about the change of leadership.  The leader gets blamed for all bad things and praised for all good ones, but in many companies is more likely riding the wave of events rather than shaping them.  So maybe the change won’t matter.  Blizz is old enough to have a culture set in concrete, and there is nothing so difficult as trying to change corporate culture.

And, of course, J. Allen Brack is this guy.

World of Warcraft

With J. Allen Brack now at the top of the pyramid they had to have the new chief of WoW come out and speak. While not an impressive figure, John Hight isn’t nearly as tall as his predecessor for instance, he did show more charisma on stage than the unemotive J. Allen Brack.  I mean, he was no Chirs Metzen, but who is? (Except for that guy in line at the WoW Q&A.)  Still, he seemed excited and invested and glad to be there.

When we got to the actual “What’s Next” presentation for WoW Ion Hazzikostas took the stage to actually get into the details as to what is coming with the Tides of Vengeance update, which is coming on December 11.  Basically, they are trying to follow the successful path they went down in Legion while improving on some of the things, like azerite armor and such.

He was followed up by Ryan Shwayder, formerly of SOE, the 38 Studios fiasco, and the Nerfbat blog, who spoke of new allied races coming with the 8.1.5 update, changes to Darkmoon Faire, holiday updates, Warsong Gulch and Arathi Basin remaster, and portal rooms in Stormwind and Orgrimmar.

Basically, lots of things are coming and, while I am not totally invested in WoW at the moment, there were things on the list for me.  Blizzard is still trying to tend to its biggest money maker, not that I doubted they would.  They haven’t addressed every little concern, but clearly there is still a lot going on.

WoW Classic

This was the interesting bit of BlizzCon for me.

First, the big news.  We got a ship date… well, a ship season anyway… for WoW Classic.  It is slated to launch in Summer of 2019, so at some point before September 23.  Going back and looking at what I have said in the past, I was clearly betting on 2020.  But the timing of Summer 2019 seems about perfect as that would put it a year after the Battle for Azeroth launch, about the point when many expansions start shedding players in large numbers.  It will also be pretty close when all those “six months for a mount” subscriptions start to come due.  It is like they planned that.

The other item is that WoW Classic access will be part of your WoW subscription, something I fully expected.  No conspiracy there to my mind.  You want to make it easy for customers to give you money.

And then there was the “Restoring History: Creating WoW Classic” presentation.  I wish they would put this up on YouTube, because it was great to watch. They spoke about how they managed to unearth all of the WoW 1.12 data from a backup of a backup and how, to solve the problem of making it run, merged it into the current WoW cand Battle.net framework.   With just some adjustment to data formatting they were able to get a prototype running.  This solved a lot of infrastructure problems for them and gave them a solid platform that works with their current systems.

Now there is a matter of paring back some of the things that come with that framework which led to a segment about their design philosophy.

Overall design philosophy

The last bit means if something is working the way it was back in 1.12, that is the way it should work.  There were some easy choices to make.

The easy stuff to eliminate

Other things were less obvious items, such as the debuff limit.  In 1.12 you could only have 16 debuffs on a boss.  That was a technical restriction, not a design choice, that they managed to get past later, so the number is now 255.  But since it was 16 back then it will be 16 in WoW Classic because to change it might change the raid and dungeon meta.  Other things they might let in, but only after close scrutiny.  You will likely be able to shift-click on in-game mail to collect attachments, but in-game mail will take an hour to be delivered.

Also, because WoW didn’t spring on us fully formed certain things will be introduced over time in waves.  The time frames are not set yet, but this is what they are considering, including the appropriate in-game events to go with them.

Raid progression

This opens the question as to whether or not they will be starting new servers over time as well, because maybe you want to run the Onyxia era raiding, but the server has already progressed to AQ.  We shall see.

And then there was the WoW Classic demo, which let you run around either Westfall or The Barrens in a character boosted and geared to the right level.  On the first day there were so many people that Westfall was effectively scourged of NPCs, even on a low population server (there were 20 servers up), but I was able to run around a bit.

Later in the evening, when the BlizzCon people stopped playing, things got more manageable and I was able to hunt the Defias and such.  While I didn’t go in with a strong mind as to how things ought to be, every time I touched the UI I was reminded of how things had changed and remember what it was like back in the day.  For example, remember how “B” used to just open up your first bag by default?  There were lots of those revelations.

Blizz has done a really good job so far, though there is clearly some work left to do.  Some random screenshots:

I am actually really impressed with how serious the WoW development team seems about WoW Classic.  This feels like Blizzard getting serious about a project and being determined to do it right, a welcome change and pretty much a complete about face from the “it can’t be done” and “you think you want this” messages of the past.

Candy Crush Diablo

This was the surprise disappointment part of BlizzCon for me.

Here is where Blizzard learned that if your user base is mostly PC gamers, with a smattering of console fans in the mix, announcing a new mobile title might not be the best BlizzCon plan.

Diablo Immortal, the NetEase created game set to bring the Diablo franchise to mobile platforms, was the only thing Blizzard had for the franchise, and did not sit well with fans in the Diablo hall at BlizzCon. Blizz had their most dedicated fans in the audience that day and managed to disappoint them en masse.

This seemed to be one of those polarizing moments. It you were an outsider or a member of the gaming press, you were likely fast to criticize the reaction of the fans. More entitled toxic gamer hate.  This is why we can’t have nice things.  Do you guys not have phones?

On the other hand, imagine if you were a fan and saw the primacy of place given to the “What’s Next for Diablo” presentation on the schedule, something that sets expectations even when Blizz tries to cool down the anticipation. The IP with the biggest announcement is always up first after the keynote. You have spent money on the Virtual Ticket or, worse, spent a lot of money getting to Anaheim for BlizzCon, and the announcement Blizzard has about the Diablo Franchise is essentially not for you. You might rightfully feel more than a bit betrayed if the only news you got was for somebody else, somebody not even at BlizzCon.

Blizzard had their core audience right there and was talking past them to some potential future fans who weren’t even watching.  I mean, they literally said that Diablo Immortal was for a market segment that doesn’t play Diablo.  So the complete lack of cheering or any enthusiasm in the crowd was a big red flag at an event where cheering is the norm. You have to have made a pretty serious con mistake to get there.

Guess what? Platform matters. Blizzard makes games for the PC platform with some titles available on console, and I am honestly surprised the PC and console players get along as well as they do. Yes, Hearthstone is available on mobile, but given that it only ever cracks into the top ten on the PC charts, my guess is that the PC demographic dominates. And Hearthstone fans were not sitting in the Diablo room.

Nor were Hearthstone fans or other mobile players at BlizzCon interested in the demo it seems. Pictures  from the demo area for Diablo Immortal showed sparse interest in the title from all BlizzCon participants who lined up to play all the other demos.

And the response from fans was entirely predictable.  We have seen it before.  We watch Disney kill Club Penguin with its mobile plan, ignoring the loud complaints of its installed base.  We saw a quite a tepid response to EVE Echoes, the mobile EVE Online game also being made by NetEase, just two weeks ago.  The saving grace at EVE Vegas was that we knew a mobile game was in the works and CCP had the good sense not to make the EVE Online keynote all about an outsourced mobile game.  Blizzard totally missed the expectations of their fans andis paying the price.  The Diablo Immortal videos on YouTube are getting a huge amount of down votes, so much so that they have removed and re-posted them in hopes of clearing the down vote tally.

You know what could have alleviated the pain of Diablo fans? Literally any news about something new for the franchise on PC.

A teaser for Diablo IV would have been oil on turbulent waters.  A mention that they were working on a remastered version of Diablo II, something we’ve suspected for three years now, would have dissipated most of the outrage.  But the only other new to announces was that Diablo III for the Switch was now available, but Nintendo had been bombarding us with that for weeks already.  Good for Switch owners, not all that interesting to the core Diablo fanbase.

I might hope we have a lesson learned here, but probably not.  Blizzard is certainly trying to walk this back without blaming the fans.  They love to stoke up that fan passion when it is going their way, so they have to eat it when it gets out of their control.  It is at least good that they get that.

As for own feelings about Diablo Immortal, I am sure it will do well with some demographic, but that isn’t me.  I like slower games on my iPad and on my iPhone I only ever play Pokemon Go, mostly because I have a small iPhone, which I prefer, so I need to put on glasses to see tiny text on the screen.  And given that the gaming press, which was so quick to jump on Diablo fans, could barely string together three nice things to say about Diablo Immortal in their own write ups, it seems unlikely that I will bother to give it a look.  Oh, and it is always online, just like Diablo III.  No single player for you!  The hits just keep on coming.

Of course, while this grabbed so many headlines and hot takes, it was only a small part of BlizzCon overall.

Overwatch

Unlike Diablo fans, those there to see Overwatch seemed pretty happy.  They got a new character to play, Ashe, and a couple of cinematics.  I don’t play Overwatch, so it is difficult for me to gauge how much this meant.

They are also getting a kids cereal with loot box prizes inside.

Lucio Ohs

This is really a thing coming in December.  A free loot boost is now part of this complete breakfast.

Hearthstone

No surprise here, a new expansion was announced, Rastakhan’s Rumble, a troll and Stranglethorn Vale themed package.  Seemed to get all the cheers Blizz could ask for.

Heroes of the Storm

A new character to play, Orphea, who is free to all BlizzCon participants.  There was also some gameplay updates slated for 2019.  I’m really at sea when it comes to HotS, but fans seemed happy.  But since I hear so little about HotS outside of BlizzCon, my suspicion is that they are happy to be getting as much attention as they do.

StarCraft II

StarCraft II got Zeratul a new co-op commander.  Also coming are building skins and the ability to earn skins and such by watching SC2 esports events.  I keep thinking I will go run the single player campaign for this, since the base game is free now… but somehow I never do.

Warcraft III Reforged

The good BlizzCon surprise, even though I mentioned it as a possibility last Thursday, was Warcraft III Reforged.

The return of RTS again

This one interests me.  I’ve been back to play Warcraft III and blogged about it.  It was the last Warcraft RTS, was very popular, and a player mod for the game, Defense of the Ancients, essentially kicked off the MOBA idea and is largely responsible for what became League of Legends and DOTA 2.  But it also came along in 2002 and once World of Warcraft hit in 2004, Warcraft III fell into the background, like everything else at Blizzard, as the company tried to get hold of the overwhelming success of WoW.

It’s legacy is huge, but timing put it in the shadow of its younger sibling, so I wonder how the remaster will play out.  It is available for pre-order at $29.99, which includes the expansion The Frozen Throne.  Or, for ten dollars more you can get the Spoils of War Edition, which gives you items in other Blizzard games including a mount in WoW.  Given that $25 is the usual toll for a WoW mount, that might be a deal.

Also, now that we have this and StarCraft remastered, Blizz might finally get to Diablo II remastered.

Destiny 2

Activision continues to try to horn-in on the Blizzard launcher.  They already have Destiny 2 and Call of Duty: Black Ops 4 in their own little roped off section.  It was announced at the start of BlizzCon that the Destiny 2 base game was available free to download from the Battle.net launcher, and would remain so until November 18th.  So if you want to try it out and have about 80GB of drive space to spare, there it is.  Of course, they hope to get you hooked so you’ll buy the expansions.

Panels and Other Events

If the gaming press had really wanted to roast gamers, they might have spoken up about how sparse the crowd was for the “Play Nice; Play Fair” panel.  That was an empty hall.  But I am going to guess the gaming press didn’t bother going either given that Google didn’t show me a single result when I went looking for which gaming news site covered it.  The press isn’t as different from the fans as they would like to think I guess.

I have long since gone off the cos-play and dance competitions.  I’m just not into it enough to care after watching it for a few years.  There are too few fresh stand-outs for me.

There were also five channels at BlizzCon devoted to “esports,” which I am putting in quotes just to annoy people, and I didn’t watch a single minute.

Still, I watched and enjoyed quite a few of the panels.  There are still some I want to watch before the time runs out on the Virtual Ticket and they disappear forever.  I think I might have enjoyed “Build A Panel: World Creation in WoW” the most, as it combined my enjoyment of looking behind the scenes on how things are made with just enough silliness.

Overall I suspect that for the rare Blizzard fan who loves all of their games equally, this was a reasonably satisfying event.  Everybody got a little something… well, except for the core Diablo audience.  But it you love Blizzard uncritically, as some seem to be demanding we should, then Diablo Immortal was good for you too.

Of course, people have been complaining about BlizzCon since the second one, during that dream era when it was just WoWCon.  The long time complaint was always that Blizz shouldn’t bother unless they have a huge announcement.  The few times there has been a huge announcement do tend to set a high bar.

However, I am fine with a tepid BlizzCon when it comes down to it.  In the end there is always more going on than I am able to watch and sometimes the fine details are more interesting than the big announcements.  And I got to play WoW Classic, which got me back to playing some WoW, so op success for Blizz on this front I guess.  I might even hit level 120.

Others in the neighborhood talking about BlizzCon 2018:

• Blessing of Kings
• Bio Break
• Kaylriene