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Thursday, January 24, 2008

How much money Blizzard is really making from 10 million subscribers

An article on Playfuls.com (which I found via Incgamers) tried to take the news about Blizzard's ten million subscribers from earlier this week, and suss out just how much money they're making. They do what most people would do, which is multiply their $15 subscription rate per month times ten million, which would mean that Blizzard is raking in $150 million a month, or about $1.7 billion a year is gross profits.

Except that's not right. Because while North American and European players pay about $15 a month, many Chinese and Asian subscribers don't pay monthly-- they pay hourly, at a much lower rate than what other players around the world pay. With 2.5 million and 2 million subscribers in North American and Europe respectively, Blizzard is still making $810 million a year (not to mention the cost to purchase the original game and the expansion pack, which at this point is probably negligible at this point given how much retailers like to take out) in those places. But that leaves 5.5 million players in other countries, and their payment plans aren't as rigidly defined.

Of course, obviously these are all estimates as well, and they're gross, too-- you have to remember that Blizzard pays a huge group of people money to keep up content, customer service, promotion, and administration, as well as maintenance on what must be a huge number of servers (each realm has at least three or four servers running on it, for each continent and all the instances). And Blizzard has other income coming in as well-- licensing fees, fees from The9 (the company that actually runs WoW in China, and likely collects subscription fees there), transfer fees from players, and so on.

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