Time and the bottom line

Activision Blizzard conducted its public Q1 2017 Earnings Call yesterday. For those of you unfamiliar with this quarterly ritual, it is a conference call conducted to inform ATVI stockholders of the company’s financial status. The company being traded publicly, the transcript of the call is published for anyone when cares to read it, and in fact if you really are into masochism, you can register with ATVI in advance and sign up to be on the call (in theory, that is — I have never tried this, can’t imagine why I would actually). This conference call accompanies the public release of the financial report for the quarter. I am not even going to give links to these things — you can easily find them if you search, and honestly they are very dry and dull. There is, however, a quick and dirty summary on MMO-C if you care to read it.

There was not much in the latest report/call that had to do with WoW. In fact, there hasn’t been much for a few quarters now, usually only a brief mention of a new expansion or some comment about Monthly Active Users or Daily Active Users. That in itself is sometimes eye-opening to WoW players, because it underscores the undeniable fact that WoW is no longer the flagship it once was, it really is a minor part of the growing ATVI empire. In the big corporate picture, you definitely get the impression that WoW is a bit of a dinosaur — it is still a revenue producer, but it is does not seem to be part of ATVI’s vision for the future of gaming.

There were one or two points that I picked up on in the report, though. The first was the opening statement by Bobby Kotick, CEO of ATVI. You can sum it up in one word: esports. A partial quote:

One of our big priorities is to unlock the full potential of professional esports by opening the sale of teams and media rights of our leagues. Over the years, we’ve become a leader in creating world class competitive experiences, sustainable franchises that engage hundreds of millions of people around the world, through gameplay competition and connecting players and communities. This success is driven by our ability to tap into the timeless power of communities, anchored through organized competition.

The esports audience includes some of the hardest to reach and most sought-after demographics for marketers and advertisers, with the share of millennials two to three times higher than any of the big four U.S. sports.

We’re also going to combine delivery of our spectator content with unique advertising opportunities that includes the ability for advertisers to have better targeting and analytics, much more so than what you would see in traditional forms of broadcast advertising today. And with over 400 million MAUs and extremely high levels of engagement, our potential to generate meaningful advertising revenue is substantial.

Of course, it is not news that ATVI is betting heavily on esports. And no one should be surprised that the WoW franchise plays only a tiny part in that expansion — it is really focused on ATVI’s other, newer, games. What did strike me, though, is the very strong implication that ATVI is more than willing to use its entire stable of games — along with the very considerable and detailed data it collects on player activities and preferences — to “generate meaningful advertising revenue.” I confess I do not really know what that means, but it does tend to give me an itchy feeling between my shoulder blades now if I decide to click on the in-game Blizzard shop, or if I routinely check the Mac technical forum on the Blizz web site. Nothing illegal or even necessarily immoral about this, and it certainly is a widespread practice any time you use the Internet, it’s just that I had previously not considered it as part of WoW. Yeah, I know that is naive, but still Kotick’s comment got my attention. Are we on the path to becoming less valuable as customers and more valuable as ATVI mass data products?

The other major point I took from the report were a couple of related comments.

This, from ATVI COO Thomas Tippi:

Blizzard continues to see strong engagement from its players with time spent increasing by a double digit percentage year-over-year to a new Q1 record.

Blizzard’s strategy to release content and feature updates more regularly in World of Warcraft has been paying off with time spent up year-over-year, and with overall performance ahead of the prior expansion.

And this, from Blizzard CEO Michael Morhaime:

So, yeah, this year for Blizzard represents a new type of pipeline, one that’s not necessarily based on full game launches, but instead on delivering new content updates for our games. This quarter, we have meaningful new content for every franchise in our portfolio. In fact, a few weeks ago we set a new DAU record on the back of these new content updates. This reflects the evolution of our business from focusing primarily on full game releases to also providing a consistent stream of content for our players. Even without any full game launches this year, we’re continuing to add to the depths of our games to serve a very highly engaged community with more content across our portfolio than we ever have before.

Anyone who thinks the grindy aspects of Legion is just an expansion peculiarity needs to think again. It is, in fact the plan for the foreseeable future. We can expect the next expansion to stretch out professions, leveling, gearing up, achievements — every activity in the game — even more than Legion does. Why? Because time spent in the game is the metric for game success in ATVI.

Is this tactic really “content”? Who knows? The fact is that whatever it is, it has succeeded — at least so far — in evening out WoW player engagement. Whether you like or hate Legion or are somewhere in between, it seems to have kept more players  logging in further into the expansion than previously. Legion’s strategy seems to be a financial success, as measured by MAU/DAU. It is hard to argue with that. And while it can seem grindy — hell, it is grindy —  it is also fun, certainly to those of us actively playing.

Still, there is this stubborn, contrary part of me that feels manipulated and used. It’s the same feeling you get when you suddenly realize someone is taking advantage of you. I feel like Blizz is pushing my loyalty to the game so as to get better quarterly numbers. Yeah, I know that is why they are in business, but this feels different somehow.

It’s like this: What if movie theaters suddenly changed their business plan to measure success by how long movie patron cars remained in the parking lot? So once you got to the theater, there were deliberate setups that ensured long lines for tickets, for popcorn, for the bathrooms, to get to your seat. They added a gift shop you had to pass through in order to get to the seating area. They tripled or quadrupled all the pre-movie ads and trailers and trivia games. They added several intermissions to every movie. They gave you a coupon of some sort if you stayed after the movie was over to complete a customer feedback survey. And so forth. How would you feel about your movie experience? Chances are, if you really wanted to see the movie in a theater, you would still go, but you would not consider most of the experience to be happy. Some would undoubtedly love all the new “content”, but many others would remember when they used to be able to do the movie experience in 3 hours, but now it took 5 or 6, and they would not be pleased about it.

I don’t have any grand conclusions about all this. It was, after all, just a financial report. Still, it did give us a couple of insights into what the future may hold.

Speaking of which, my future includes a weekend. Weather weenies tell us it will be cool and rainy in my part of Virginia — perfect for staying warm and dry inside and playing WoW or watching a movie.

Set your sights lower

We are approaching the 2-month mark for Legion, and I think by now most of us have gotten a good feel for the expansion’s general mechanics and layout. For me, there is one overwhelming impression, and it is this:

Whatever your game goals and play style for all previous expansions, it is no longer possible to achieve them without significantly — by a factor of 2 or 3 — increasing your playing time. If you cannot or choose not to extend your play time, then you have no choice but to set your goals much lower.

I don’t know about you, but for me this is not an inspiring choice. I am currently playing about 30 hours a week, which is more than my standard 20 hours I have been doing for some years now. In that 30 hours, all I can manage to do is raid (8 hours), do WQs every day (and not all of them, either, just the emissaries, Nightfallen, and a couple of profession ones), work on the seemingly-infinite achievements for Legion Pathfinder, gather a few mats for raid food, carry out some Class Hall mission quests, and run some Mythic and Mythic+ dungeons with guildies.

And even with this, I am falling further and further behind in terms of gear. I have not had even a glimpse of a legendary, crappy or otherwise. (I guess this means I am having great fun, according to that great fun authority Ion Hazzikostas.) For at least a month, I have not won the lottery to get any significant upgrades to looted gear. Falling further behind in gear means it is more difficult to be invited to the higher level Mythic+ runs (perfectly understandable), which in turn means I have a diminished chance at better gear, which means I have less utility for higher level Mythic+ runs, etc. A downward spiral.

During the weeks when I played even more than 30 hours I managed to level one alt, a Balance Druid with herbalism/alchemy professions. But that alt remains at a an extremely basic level with only a couple of artifact talents, only two followers, and a gear level that has yet to hit 800. As to professions, she has not yet finished the extensive quest lines necessary to get to even Level 1 of the flasks I need to for my main.

I just do not have the time to devote on an alt to gather class hall resources and Artifact Power to advance beyond this point. I will likely make the time to finish the initial profession quests, but I do not expect to ever get beyond profession Level 2 for alchemy, because I will not have the necessary gear to go into the dungeons I need in order to have a “fun” RNG chance at Level 3’s.

Thus, my Druid will be relegated to being an herb gatherer and flask maker. Ironically, this is exactly the alt role that Ion Hazzikostas has decried, instructing us that the only acceptable reason to have alts is to play them in the same way as mains, that in fact having them solely to support a main is very naughty and will no longer be tolerated. Short of abandoning my main, I do not foresee me leveling any other alts in this expansion, or if I do they will reach 110 and that is it.

Honestly, I feel kind of betrayed by this turn of events in Legion. My goals for the last several expansions have been quite modest:

  • Level my main and gear her sufficiently to be a respectable raider with a semi-casual team.
  • Level my 7 alts, max their professions, and gear them sufficiently to be able to do LFR.
  • Further gear a couple of the alts to be able to participate in guild alt raids later in the expansion.
  • Play my alts a bit each week, so as to keep a minimum proficiency with them.

That’s it. Those are very modest goals, in my opinion, and they are goals I have always been able to meet by playing about 20 hours a week. But they are goals no longer possible in Legion. I don’t know of any endeavor where forced diminished expectations is an inspiring message. I can’t imagine, for example, a real stump-stomping speech where people would be rallied by a politician exclaiming,”And if I am elected, I can promise you that your future will be one of harder work and longer hours for fewer rewards!!!”

It doesn’t work for politicians, and it doesn’t work for online games. Anyone who has played this game for more than a couple of years has a pretty well-established set of expectations for personal progression each expansion. For many players, Legion has demolished those expectations. For me it is becoming a long, hard slog, an expansion where I will no longer be able to reach even my modest goals, an expansion that has a lot of content but few meaningful rewards. In typical fashion, Blizz has in my opinion once again severely overcorrected the problems they perceived in the previous expansion. The game continues to lurch from one set of extremes to another, never really seeming to find a decent balance.

And now (nothing to do with lurching, I assure you),  I believe it is time to start my weekend and have a beer.