Money Games: Activision Blizzard and Hearthstone


    The "Money Games" section continues to talk about the principles of managing and monetizing the largest and most popular game development companies and the games ("labels") they release.

    Historical reference


    Fact 1 : Blizzard is an American computer game company, publisher of the legendary "incorruptible" Starcraft, Warcraft, and Diablo series (Lost Vikings doesn't count).

    Explanation : Founded on February 8, 1991, by three graduates of the University of California, Los Angeles (UCLA): Michael Morheim, Allen Adam, and Frank Pierce, before Blizzard, the company was called Silicon & Synapse, after merging with Activision game publisher Activision Blizzard. Prior to the merger with Activision, the company completely buys from Vivendi. What happened between these events is described in detail by Wikipedia :
    In 1994, the company changed its name to Chaos Studios, but it soon became apparent that the name was already taken, so the studio changed its name to Blizzard Entertainment. In the same year, the company was acquired by a distributor of Davidson & Associates, for $ 10 million. Some time later, Blizzard released the first hit - Warcraft: Orcs & Humans.

    Then the owner of the Blizzard changed several times: Davidson was acquired with Sierra On-Line by a company called CUC International in 1996; In 1997, CUC merged with Cendant Software, a hotel, real estate agency and car rental company (HFS Corporation). But in 1998, it was discovered that before the merger, CUC was involved in major financial frauds. Over the next six months, Cendant shares fell 80%. The company sold software development affiliates, including Blizzard, to the French publisher Havas. But in the same 1998, Havas was bought by Vivendi.
    Each game of the company becomes a bestseller, an unofficial motto: "We only make hit games." The company is separately known for the struggle for "invisible" development, when before the official presentation no smallest details are leaked to the public. And if it leaks, the culprit of the leak is dismissed with shame (though this happened only a couple of times).

    Headquarters: Irvine, California. Additional offices: San Francisco, Austin (Texas), Versailles (a suburb of Paris), Cork (Ireland), Stockholm, Seoul, Shanghai, Taipei and Sydney.

    Fact 2: Warcraft – первая «серьёзная» игра Blizzard. Во многом именно Warcraft сформировал наши представления об орках, эльфах, людях и их взаимоотношениях (хотя, конечно, основы данных представлений были заложены ранее Толкином, однако факт, что они повлияли уже на Джексона, снимавшего фильмы), изобразив первых самобытными, но храбрыми воинами, ищущими альянса с другими расами ради спасения своего мира.

    Пояснение: Именно Warcraft стал той игрой, которая наглядно показала игрокам во всём мире преимущества: А. Стратегий в реальном времени; Б. Смысловой и идеологической наполненности виртуального мира, подоплёки его существования и В. Long beta testing of games and improving all the little things as the only way to sell the game successfully for many years.

    Subjectively : Warcraft became the first “cash cow” company, showing competitors that such a thing is possible at all - the preservation and development of a central gaming “idea” through the release of large-scale updates to the game world, without introducing (fundamentally) new game mechanics (the largest representative of this tribe is Sims, we’ll talk separately) for many years.

    Fact 3: Hearthstone is a continuation of the ideas of Warcraft, and the second part of the name “Heroes of Warcraft” speaks directly about it, and the general “informational background” of the game hints about it every second. The general “tone” (in English there is a convenient term “flavor” - aroma / taste, this complex concept refers to the perception of a specific “meta” (that is, the general “gaming environment”) and those individual actions that occur in it) was set even in the desktop CCI "World Of Warcraft Trading Card Game", which became the basis of the network and casual Hearthstone.

    Subjectively: The cornerstone of any CCI is precisely that “flavor” that it is able to convey to players during events on the playing field. Blizzard, having a long history of Warcraft and the powerful environment of this brand as such, made the only correct conclusion - to use the most popular world for immersing players in a card "board" game on a computer or mobile device. You are a hero resting in a tavern playing cards.

    Explanation : Blizzard knows his business, his audience well, and in the process of working on a real (that is, physical) card game, the participants of the Magic The Gathering Pro Tour (MTG World Championship - the prototype of all modern CCIs, whose connection with Hearthstone has been explained) below).



    Excursion to the genre


    Fact 1 : On the one hand, Hearthstone is a classic CCI that has managed to take all the best from Richard Garfield's main creation, Magic The Gathering . Garfield, in turn, was greatly influenced by Harry Gygeks and the Dungeons & Dragons created by him in collaboration with Dave Arneson - in fact, the basis of any role-playing game of our time, its deepest foundation.

    Subjectively: “To take all the best” is to abandon the mechanics that interfere, so to speak, with MTG itself. Initially, Magic: The Gathering was not conceived by Garfield as a collectible game, namely, a card game, in the center of the interaction model of the players of which there existed the concept of “stack” or “waterfall of events”. All events fall in a logical sequence from top to bottom (packed into a stack), and the results of each card drawing individually (the so-called resolve - “have consequences”) also happen from above. That is, the last card played first has an effect on the field, and not vice versa.

    On the other hand: in Hearthstone, the concept of "stack" as such is absent. And each new move by default brings at least 1 crystal of “magic” (an analogue of “mana”) to their maximum of 10 units per move.

    Fact 2: Another serious problem with the MTG concept is the “manapul”. "Lands" (lands) are a source of obtaining the resource (mana) necessary for drawing cards of the corresponding fraction (or color). If you do not have land, you will lose, no matter what. In the same way as you can be "flooded" (flood) by one land, so you can not effectively develop the situation on your side of the playing field.

    Fact 3: The third problem, which, in fact, is not a problem, but a side effect, is the very “collection” of MTG cards. The fact is that because of the basic model for the distribution of new cards through random sets (15 randomly distributed individual cards, but always understandable structure within the in-game hierarchy of the “significance” of cards). At first, this problem almost killed Magic The Gathering, and after the publisher and copyright holder Wizards of The Coast changed the tournament formats and “expanded” the field of application of individual cards, collection became the main measure of the success of any CCI. In modern MTG, the cost of entering a high level of a game (tournament) is hundreds of US dollars, and in an exclusive one it is prohibitive. The cost of individual, the rarest, cards amounts to tens of thousands of dollars.

    Explanation: In Hearthstone, as I already mentioned, there is no stack, no lands, no mana, no collection (if such a concept is generally applicable to a picture on the screen rendered on Unity). In general, this is what can be called, if not the reason, then the condition for the popularity of the virtual online CCI. Since the lack of complex mechanics simplifies the interaction of players during the game, and on mobile devices only such games get the right to exist (as proved by Zynga and other casual gamedev companies over the past few years) - Blizzard has found a recipe for success.

    Fact 4: Conversely, the last thesis is proved by the fact that Wizards of The Coast itself did not manage to successfully port its own “incorruptible” brand, mechanics and the world to online, although there were several attempts - and with standalone games of “Battle of the playlists” (the main characters of the fictional MTG universe influencing scenario events), and with MTGO (O = Online). The game simply didn’t take off, largely due to the difficulties of transferring complex mechanics 1. To the screen and 2. To online.



    Product management


    Fact 1 : Publishing is the strength of Hearthstone.

    Explanation : The term “publishing” in game development is understood to mean the entire set of actions to convey game content to a user-player. This is a distribution platform, and a model of receiving-allocating-winning new cards or obtaining new mechanics, and finally, the opportunity to spend real money.

    Since Hearthstone is currently the only CCI successfully distributed on mobile devices, and the first to manage to do this effectively, the number of players in this game is simply incomparable with the audience of other card games, similar or not. We can say with confidence that access to tablets and smartphones made Blizzard a big cashier and greatly increased the market ceiling in absolute consumers. Before them, this model was simply no one dared to implement.

    Fact 2 : Well, of course, there is no good without a trace - the commissions of mobile application stores reduce the company's total revenue with Hearthstone, since the pricing policy cannot be different for the desktop and mobile phone, but Apple and Google willingly charge the commission for the in-game purchase not going to.



    Fact 3 : But even this did not stop Blizzard from devising a monetization strategy that was different from the industry’s standards - these are massive additions. It's funny that already four times a well-worked out scheme (on Warcraft and World of Warcraft, Starcraft and Diablo) for the release of large-scale updates to the game worlds has proved its worth for KKI. Similar experience with game publishers only recently (an example is Garfield’s latest creation, Android Netrunner, which also exploits the best of MTG mechanics, adds a lot of interesting things “from above” and does not try to build a collection market from separate cards, on the contrary, equalizes all add-ons (and therefore, the individual cards available in them) at a cost).

    Fact 4 : Here we come to the most important thing - money.
    It is not possible to find official evidence for this thesis - Activision Blizzard is a private company that does not publish either income data or audit results, so it is impossible to find out how much or at least a share of the profits the company receives from Hearthstone. But you can, indirectly, in terms of volume, roughly understand what is happening with the monetization of the game.

    • The largest number of players among all CCIs: the greatest platform accessibility of the game and zero entry cost work in favor of this hypothesis.
    • A good F2P economy that allows an active player to get results without spending real money, but time.
    • Predicted check: no game can predict how many cards, boxes or boosters / decks (deck for the game) will be bought by the consumer after the release. The storage resources of numerous resellers do not reflect real shipments to customers and the entire logistics of the collection market is extremely opaque. Hearthstone’s big upgrades are average cost and come out at projected intervals; the conversion of players to buying these add-ons is likely obvious to the company.
    • Audience: Hearthstone is a game with vivid pictures and effects, juicy dialogs and voice acting, and also, very importantly, the lack of the ability to run into a negative (you can “communicate” with an opponent through 6 programmed action phrases during a separate match / round).

    And to paraphrase the famous: "Make love, not Hearthstone."
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