WoW Update

In June 2005, I wrote about World of Warcraft (WoW):

Conservatively, there was a one-time revenue stream of just under $100 million dollars, and an on-going monthly revenue of just under $26 million (just under $312 million annually). They are opening the game up in China soon, where there are 500,000 players in the open beta period. It’s not hard to imagine cumulative revenues of over a billion dollars, or perhaps two.

Today’s NY Times brings news that indeed, they are on track for a billion dollars this year:

Less than two years after its introduction, World of Warcraft, made by Blizzard Entertainment, based in Irvine, Calif., is on pace to generate more than $1 billion in revenue this year with almost seven million paying subscribers, who can log into the game and interact with other players. That makes it one of the most lucrative entertainment media properties of any kind. Almost every other subscription online game, including EverQuest II and Star Wars: Galaxies, measures its customers in hundreds of thousands or even just tens of thousands.

The Times also addresses the employee head-count, which I had guessed at 350 a year ago:

Since the game’s introduction in November 2004 the company has expanded to more than 1,800 employees from around 400. Almost all of the additions have been customer-service representatives to handle World of Warcraft players, helping them with both technical advice and billing concerns.

That’s $555,555 of recurring annual revenue per employee, for the business modelers out there.
And why do people play this game? First, it’s easy for beginners to get started, but it also has a lot to engage long-term players. But the most important aspect can be gleaned from an interview with this 3,000-hour player:

“Think about it: I’m a 33-year-old guy with a 9-to-5 job, a wife and a baby on the way,” Mr. Pinsky said. “I can’t be going out all the time. So what opportunities do I have to not only meet people and make new friends but actually spend time with them on a nightly basis? In WOW I’ve made, like, 50 new friends, some of whom I’ve hung out with in person, and they are of all ages and from all over the place. You don’t get that sitting on the couch watching TV every night like most people.”

People want to be engaged—some might say entertained—and they want to extend their networks. Yochai Benkler might call it social production.
Please make a note of it.