Around a year ago I wrote about the Activision stock: https://evancarthey.com/if-you-are-a-gamer-then-you-need-to-buy-activisions-stock-atvi/
When I wrote the article the price of the Activision stock was around $51 and today it is now $54 (Nice! A $3 gain in a year! Haha big money!)
It was after they reported some less than stellar numbers and the stock has sold off. Fast forward to almost a year later and Blizzard (a company owned by Activision) re-released the most dominate MMORPG (massively-multiplayer online role-playing game) to ever exist, World of Warcraft Classic.
What was released was the 1st edition of World of Warcraft. There have been numerous expansions since the original release of World of Warcraft which I will go over how those impacted their subscription numbers but many people consider the original World of Warcraft to be the best out of any of the further expansions.
Since Blizzard is owned by Activision their number one goal is to try and make as much money as possible for the Activision stock (ATVI is a publicly-traded company). Nothing wrong with that.
But as the years went on it was clear their objective to make as much money as possible was watering down WoW and providing a worse overall player experience.
Here is their subscription numbers chart from 2004 – 2015:
You can see how the player count peaked at just under 12.5 million subscriptions during the Wrath of the Lich King expansion! Since then it had been a steady decline lower.
In 2015 Blizzard quit giving out their subscription numbers (Hmmmmmmm….I wonder why?????). They were quick to give them out when the player count was rising but when the downtrend was well underway they quit giving them out.
In their defense here was Blizzard’s reasoning that can be found in this article: https://www.wowhead.com/news=295273/classic-triples-wow-subscription-revenue-in-august
It is important to note, however, that one of the reasons Blizzard gave when stopped disclosing direct information on subscriptions was that subscriptions weren’t a good picture of how healthy WoW playerbase was, with retail WoW having many different sources of income for the company. Another factor is that many retail players are likely subscribed in longer subscription plans that overall earn Blizzard less, while part of Classic players probably subscribed for only a month to try the game. Even so, the increase in revenue is still an outstanding feat that shows the potential revenue present in Classic.
There have been several videos where people have estimated how many current subscriptions WoW has. Here is one of the best in my opinion:
According to the video above, there are around 1.3 – 2 million active subscriptions during the latest expansion, Battle for Azeroth. This is for the US and Europe. This does not include China and Korea. So as you can see, the numbers are much lower than they were back in 2009 – 2011.
The Decline of WoW Subscriptions and Blizzard’s Issues
World of Warcraft is held to a higher standard than any other MMORPG. It is the king and has been for the past 15+ years.
Here are just a very small sample of MMORPG games over the years who were hyped to be the “WoW killer:”
- Age of Conan
- Rift
- Warhammer
- Aion
- Lord of the Rings Online
- Guild Wars 2
- The Elder Scrolls Online
- Final Fantasy XIV
- Black Desert Online
- ArcheRage
- Star Wars: The Old Republic
- Tera
- Wildstar
Some of these are excellent MMORPG games and are doing very well. But none of them come close to the magnitude of WoW and no one has come close to overtaking it during this time. Most MMORPG games would be ecstatic to have a monthly subscription of around $12 – $15 for over 5 million players to their game.
But for WoW this was considered a failure due to the fact that at one time they had close to 12.5 million.
So what led to the decline of the subscriptions to World of Warcraft?
You can see from the chart above that from WoW Vanilla until Wrath of the Lich King the trend was constant growth. Cataclysm was though to make the growth even higher but as you can see it had the opposite impact. That is when the subscription numbers began to decline and have been going the wrong way.
This article from a year ago shows another metric that people look for in the popularity of a game, Twitch streaming: https://www.influencerupdate.biz/news/67664/top-10-streamed-games-of-the-week-fortnite-is-finally-knocked-off-the-top-spot/
In the article, WoW came in at 8th and had been clearly passed by other games such as Fortnite and League of Legends. WoW is a different type of game than those two but it was clear that it wasn’t the king that it used to be.
The main reason why WoW subscriptions and active player base declined is that Blizzard tried to appeal too much to everyone. There are numerous reasons and theories as to WoW declined but that is the overall theme.
With Vanilla and then the Burning Crusades expansion the game of World of Warcraft was a tough and time-consuming game to progress (compared to today’s standards). It did not hold your hand and force you to interact with the players in your environment. This was one of WoW’s greatest strengths.
When you accomplished something in the game you actually felt like you had done something meaningful.
Since Blizzard decided they wanted to appeal to a greater audience so they made the game easier and with that cut out many of the aspects that made it so popular. Then Vivendi Games who is the parent company of Blizzard merged with Activision. This coincided during the Wrath of the Lich King expansion which was an all-time high for active WoW subscriptions.
Once that happened you can see from the graph above that bad decisions were made over and over that cost the company millions of dollars due to the direction they were taking World of Warcraft. In the next section, I am linking a video that goes into great detail the history of WoW and how WoW classic came into existence.
Look at the player score numbers from MetaCritic for the reviews of WoW’s expansions over the years:
- Classic – 7.4
- Burning Crusades – 8.0
- Wrath of the Lich King – 7.7
- Cataclysm -5.6
- Mists of Pandaria – 5.0
- Warlords of Draenor – 5.9
- Legion – 7.3
- Battle for Azeroth – 3.0
Legion was the only expansion after Wrath of the Lich King the players rated above a 7 (out of 10). Previously before Activision purchased Blizzard the lowest rating they had was a 7.4. Since then it has been a different story.
The Launch of World of Warcraft Classic, the Savior?
For years there had been rumblings from the players who had played Vanilla WoW that they wanted it to return. Private servers began popping up.
This led to the infamous quote from World of Warcraft’s executive producer, J. Allen Brack: “You think you do but you don’t.” Here is the interaction:
A private server is not a Blizzard server. It is where a specific expansion is used and it is “Blizz-Like.” What that means is the game is not officially from Blizzard but is extremely similar. The biggest one was Nostalrius that had over 15,000 active players at one point. Over 1 million subscribers and thousands of people in the queue.
These numbers are massive! This was a project that fans of WoW undertook to create their own private server just so they could play Classic WoW since Blizzard refused to give their customers what they wanted.
There was no advertising or marketing campaign for it. It grew by word of mouth.
With that smug answer, it showed just how out of touch Blizzard had become with their customers.
Instead of giving their customers a product they already had they chose to talk down to them like the peons they think of them to be. Never mind the fact there was a private server with 15,000+ active players. Never mind the declining subscription numbers year over year and horrible reviews to most of the new expansions since Wrath of the Lich King.
They were dug in and you were going to buy and play the expansions they gave you whether you liked it or not. How dare you give them suggestions on games or themes you would enjoy playing. It is not about your enjoyment, it is about what they feel is best for you. (Sounds kind of like some country that has been in the news lately that Blizzard has bowed to)
Here is a video that goes into much greater history regarding how WoW Classic came into fruition:
How Did the Activision Stock Play a Role?
The only thing Activision cares about is money. As they should. But with most of the top people of Blizzard so out of touch with the WoW community, it was obvious their plans were costing Activision millions of dollars in revenue.
The video of above about the history of WoW goes into this in very good detail but the overall theme as to why Activision allowed WoW Classic to return is they saw how much money they could make from the launch.
Not just that but if you keep some of those returning or new players to keep laying the retail version of WoW (whatever the latest expansion is of WoW is considered the “retail” version) then you’ve increased your profit even more.
Especially since the product everyone wanted was one Blizzard already had on file. They just needed to dust it off and make a couple of tweaks since it was going on 15 years old.
So as Gordon Gecko famously said, “Greed is good.” It fit perfectly with the Activision stock and how they needed a boost to increase their share price that had been lagging.
Without Activision finally realizing how much money they were missing out on by not providing Classic Wow, it might not have ever happened if left to Blizzard’s development team.
There were some other failures in Blizzard’s games but for this article, we are focusing on World of Warcraft.
Finally, on August 27, 2019 World of Warcraft Classic was launched. Let’s see what the response has been:
https://gamerant.com/world-of-warcraft-classic-subscriptions-increase/
Regardless of World of Warcraft Classic‘s ability to sustain increased subscriptions, the spike in the game’s player base certainly suggests that the initial interest is there. Whether these subscriptions are coming from fans looking to relive old experience or those that want to be part of the phenomenon that was vanilla WoW for the very first time, WoW Classic is providing a special opportunity that many players will not want to miss.
https://www.wowhead.com/news=295273/classic-triples-wow-subscription-revenue-in-august
WoW revenue skyrocketed in August, attributed to massively increased subscription counts due to Classic WoW. Interestingly, their total revenue was still lower than that of last August, when Battle for Azeroth launched, which also had benefitted from a gigantic marketing campaign and expansion box sales, whereas Classic revenue comes from subscriptions only.
With this increase, WoW reached top 3 Top Grossing PC Title for August, behind only to League of Legends and Dungeon Fighter Online. In July, WoW was in 7th place, and didn’t make to the top 10 in June. Superdata also ranks Blizzard title gross revenue specifically based on Western markets, precluding a huge portion of their total global presence, presumably due to Eastern countries using different payment models. It would seem that other titles are based on their worldwide revenue, as “West” is only specifically mentioned for World of Warcraft and Hearthstone.
https://www.pcgamesn.com/world-of-warcraft/wow-classic-subscription
Superdata’s latest report suggests that subscription revenue from the game rose by “an estimated 223% in August compared to July.” That was enough to send the game flying up the analyst’s PC earnings chart, coming in at third place behind Dungeon Fighter Online and League of Legends. World of Warcraft was the seventh top-grossing game in July.
If you read any of the 3 articles I listed above you can see the result has been a tremendous success for the re-release of a product Blizzard already had on file. This isn’t some new expansion, this was an existing product Blizzard owned.
How did WoW Classic’s launch fare on Twitch?
https://www.gamespot.com/articles/wow-classic-launch-surpasses-fortnite-on-twitch-by/1100-6469398/
World of Warcraft is far and away the most popular game on Twitch for its launch day of August 26, and the release of WoW Classic undoubtedly played a major role in that. The game topped 1 million viewers on Twitch today, which is multiple times bigger than all other games. Shortly after servers went live, it reached 1.1 million streams, while the next closest game–Grand Theft Auto V–had fewer than 150,000.
Twitch’s public stats show that even later in the evening, at 10 PM ET, World of Warcraft had 593,000 viewers, which ws well ahead of the No. 2 game, Fortnite, which has 120,000 viewers.
Twitch has a streamer named Asmongold who primarily plays World of Warcraft. At one point during the release, he had over 300,000 people viewing him playing Classic WoW! How do I know this? Because I was watching his stream during the launch of Classic WoW.
World of Warcraft was finally on the top streaming spot on Twitch. It had knocked off Fortnite, League of Legends, CS: Go, and the other games that had surpassed it on Twitch. It was all thanks to WoW Classic.
Is this sustainable, not as far as the huge spike in numbers during the launch. But it has increased the overall viewership and player base to World of Warcraft as a whole which is where their subscriber numbers had been declining year over year.
I can’t think of anything other than to describe the release of World of Warcraft Classic as a massive overall success for the Activision stock.
Technical Analysis of the Activision Stock
In this 823.6% long setup, we are using the 1-hour chart for the time-frame for the Activision stock. The entry was at the 823.6% level at $62.39. The exit is the top of the blue box around $68.44.
But there is one more entry and exit move possible. If the price goes down and hits the 2,223.% level at $34.17 then you would move the exit to just below the 823.6% level around $62.00. Maybe even a little lower around $61.50 or $61 to be safe to make sure your exit gets filled before the hard exit of $62.39 is hit.
But if the 1st exit of $68.44 gets hit first then the move is over and time to look for another setup.
In the daily chart, we have a 78.6% long setup that is pretty close to being completed. When the price hit the 78.6% line at $44.52 then that made the exit at the 50% Fibonacci retracement level at $59.14. The price is currently at $55.26.
But if for some reason that exit doesn’t get hit and price moves all the way down to the 100% line at $33.57 then the exit would move to the 78.6% line at $44.52.
That would be the last time the exit would move. So even if the price continued to go lower the exit would not move again. It would just mean you could continue to scale in at an even better price.
The last long setup we have is another 78.6% long but it is on the 1-hour chart. For the picture, I am using a 4-hour chart in order to show all of the bars.
When the price hit the 78.6% line at $65.32 that initiated the trade but the price soon hit the 100% line at $60.07 so that moved the exit from the 50% level to the 78.6% at $65.32. So the current exit is $65.32.
But if the price continues to move lower and hits the 261.8% Fibonacci extension level at $20.38 then that would move the exit to the 100% level at $60.07. I always put my exits lower than the hard exit to ensure I get filled so if I was in that trade and the 261.8% level was hit then I would have my exit around $59.00
Video Analysis of the Activision Stock
If the video does not load below then click this sentence to be taken to it.
Conclusion
I do believe that the launch of WoW Classic will give the Activision stock a boost in the short and medium-term. With the huge success of the launch it will be a shot in the arm that the company needed.
Add in the fact that the new Call of Duty: Modern Warfare game has just been released and is receiving positive reviews adds to the correct steps Activision has taken recently. It is on pace to be the best selling game of 2019.
But if Blizzard can keep a certain percentage of the newly subscribed or re-subscribed WoW players on for the long haul then the Classic launch will have done its duty. That is the key moving forward for Blizzard and Activision. While the iron is still hot with WoW Classic they must use that momentum to not only keep players playing WoW Classic but to get them to also play the retail version, Battle for Azeroth.
There are questions as to how WoW Classic will progress moving forward.
Will, they next go to the Burning Crusade expansion or will they create brand new content for WoW Classic (WoW Classic Plus)? Right now it is anyone’s guess because Blizzard hasn’t hinted about what they are looking to do.
The educated guess is that WoW Classic will remain as it is for the next 2-3 years but in that time Blizzard will announce how they wish to move forward. Either way, they’ll be in for another huge launch whether it is the Burning Crusades or WoW Classic Plus which will generate another round of huge publicity and massive numbers re-subscribing and tuning into Twitch to watch.
I do believe the launch of WoW Classic took a lot of people by surprise at how well it has done and will impact Activision’s stock very positively in the next quarter. From there it will be up to Blizzard to convert the new subscribers to stay for the long haul and to play Battle for Azeroth as well as the new expansions.
Hopefully, the development team will see that when you try to appeal to everyone, you appeal to no one.
