Monday, March 31, 2008

Blizzard raises WoW monthly fee to $20

Starting from today the monthly subscription fee for playing World of Warcraft in North America has been raised to $19.99 if you pay month by month, $18.99 per month if you pay per 3 months, and $17.99 if you pay per 6 months. Reasons given by Blizzard are rising cost, especially for energy, and the weak dollar. Due to the latter the monthly subscription rates for Europeans rise by only 1 Euro, to €13.99 / € 12.99 / € 11.99.

I really don't see why this was necessary. World of Warcraft made $520 million of profit in 2007 on revenue of $1.1 billion. Did they really need to raise their profit margin to over 50%? I can only conjecture that this in a reaction to the announcement of Mark Jacobs that WAR might well cost more than $15 per month. People get an impression that something which is more expensive is also more valuable, and thus it would make sense for Blizzard to try to have the most expensive MMORPG on the market.

A reader provided me with an excellent link explaining the economic theory behind choosing a price. In this case the math is simple: even if half a million of the 2.5 million North American subscribers leave because of the price increase, the remaining 2 millions times $20 is still more than 2.5 millions times $15, so Blizzard is making more money, while reducing cost and server load. And by doing the price increase half a year or so before the next expansion, Blizzard has a good chance of regaining many of the people who quit now when WotLK comes out.

So even voting with your feet won't get Blizzard's attention this time, it's already accounted for. So I think the only course of action we have is to swamp the official forums and protest in the strongest possible language that won't get you banned. This is a capitalistic monopolistic outrage, and we shouldn't let them get away with it!!!

No comments:

Post a Comment