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Blizzard tests late cycle World of Warcraft customer acquisition strategies

June 29, 2011

Blizzard, creator and operator of the most successful MMORPG of all time, World of Warcraft, has recently adopted new strategies to drive customer acquisition. Blizzard recently dropped the price of the World of Warcraft client to £5 (€5 in Europe) for limited periods, usually around a week, and today announced a change in the terms of the free trial: instead of expiring after ten days players may now continue until their character has reached level 20 in the game with no time limit at all. In addition Blizzard are also bundling the first major content expansion, Burning Crusade, with the vanilla game client (at release World of Warcraft expansions are priced at similar levels to the game client) and owners of the vanilla client who have not purchased Burning Crusade yet may download the expansion for free. Trial users are however restricted from using a numbre of features available to subscribers including voice chat, item trading and joining guilds. IHS Screen Digest believes World of Warcraft enjoyed 11.4m paying players in March 2011.

Blizzard has turned its attention to the pricing of the client required to play World of Warcraft and the trial period in order to maintain the MMORPGs market leading performance. World of Warcraft's undisputed position as the MMOG archetype has enabled it to continue charging for the client for much longer than other subscription-oriented MMORPGs of a similar age, most of which are given away free as the game matures. The company has also stated that it intends to increase the frequency of content updates for the games, as subscribers are consuming new expansions considerably quicker than in the past. The latest expansion for the game saw subscriber numbers increase for less than six months before dropping again to pre-expansion levels.

Other MMORPGs have driven revenue growth by adding freemium charging models to existing subscription models as performance fell below expectations. Lord of the Rings Online, Dungeons and Dragons Online, LEGO Universe and Age of Conan have added freemium models to existing subscription models. However Blizzard is far from comparable given World of Warcraft's enduring, market leading position and is likely to continue with the existing model of charging for the client and a monthly subscription (in NA and Western Europe) for the forseeable future.

There is a shift towards the freemium charging model in Western markets as the Asian model becomes increasingly popular and games makers start to embrace the dynamics of a distinct but potentially lucrative charging strategy. The MMOG sector has prioneered this approach but it has been adopted by other segments, notably social network games. Zynga's recent pre-IPO filing and strong revenue performance will drive on legitimisation of this monetisation approach. However for games which are not built with the freemium model in mind there are likely to be integration costs as content must be tailored for the model to work: players must be shown enough of a game to drive interest but not so much that the free experience is so satisfying that there is no impetus to start spending in order to deepen the experience. While Chinese and Korean games creators are familiar with the dynamics necessary to succeed, Western games makers continue to master the necessary game building skills but are catching up quickly.

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