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Analyst: Hardware Pricing, Possible  Starcraft II  Delay Could 'Compromise' Activision's Holiday
Analyst: Hardware Pricing, Possible Starcraft II Delay Could 'Compromise' Activision's Holiday
June 30, 2009 | By Leigh Alexander

June 30, 2009 | By Leigh Alexander
More: Console/PC

Janco Partners analyst Mike Hickey says that despite the promise of holiday success for games like DJ Hero and Tony Hawk: Ride, Activision's year end could see some snags -- chief among them the increasing likelihood that Starcraft II won't make this calendar year.

Although Blizzard's not yet pinned a specific release date for the game, it's maintained a 2009 window. But Starcraft II lead designer recently told consumer weblog Kotaku that the team plans to have a beta that will last "four to six months," leading Hickey to conclude: "We find it increasingly probably that the game will be released in [Activision's] fiscal '10 period."

Hickey also called CEO Bobby Kotick's recent warnings that Activision could withdraw PlayStation 3 support by 2011 with no price cut "likely a realistic reaction to a near term breakdown in market growth."

If hardware pricing stays high, Hickey says, it "could eventually compromise holiday sales expectations."

"While we expect price cuts from Sony, Microsoft and Nintendo before the holiday, the ultimate timing and magnitude remain uncertain," he adds.

According to Hickey, other areas of caution are a recent boost in Activision insiders selling shares -- "impossible to ignore," he says -- and increasing challenges for World of Warcraft.

The analyst says that although the number of WoW players in China is higher, the average revenue per user is lower due to the specific business model -- and downtime in the transition from operator The9 to rival Netease could cause the player base to take a hit, even though the migration will mean higher royalties in the end.

"We view looming competition in the West from new MMORPGs as a greater threat to WoW’s future then the current transition," he adds, including NCsoft's September launch of Aion as a possible competitive threat.

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Maurício Gomes
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WHUT??? SC2 has no LAN play? Yes, I will not buy it then...

Seriously, at university we play EVERY single day SEVERAL hours of Warcraft III, we play Warcraft III like mad, each day 40 students fill a lab to play it, and the reason is that on this lab we are allowing to install our own games (so, 40 sales to Blizzard... At least, since some asshole keep deleting warcraft, so another person that come after need to install his own copy), and the reason is that because playing it on LAN is awesome, specially on a 40 computer LAN that is "free" (the university is paid, but to students you just go there, sit and play, unless a teacher want to use the room... fortunally not common). Sometimes we play Starcraft too (less than Warcraft III, but still highly popular)

Now Starcraft II with no LAN means internet, but universities have firewalls, so no internet gaming, so no Starcraft II... So, I will remain playing Warcraft III...

Adam Piotuch
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So Activision and Blizzard are holding Sony for ransom? I don't see how pulling away from a console increases profit, even if the profit from Sony isn't as large as the profit from Microsoft, it's still a profit nonetheless. Next they'll hold less populated countries for ransom, like Canada. Canada is only 10% the population of United States, so I guess there's no reason to ship games to Canada is there? Unless if Canada increases the price for games 10 fold.

*I'm just joking*

Tom Newman
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I do not believe there will be no LAN play. That just seems silly. I would be shocked if that were the case. However, I would not be surprised if we did not see this on store shelves until 2011. Blizzard likes to take their time, luckily their end result has been worth it (so far).

JiPi .
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@Tom Newman : No LAN, it's official...sorry !

Bob Stevens
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Lack of LAN play hasn't exactly hurt WoW.

Sean Francis-Lyon
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@Hélder Gomes Filho: How many of those 40 copies were actually purchased?

No LAN is an anti-piracy measure. I would be willing to bet that Starcraft 2 will get more sales without LAN than it would with LAN. There will be a few people who don't buy it because they are offended that Blizzard took out LAN, but many more will buy it because thats the only way they can play with their friends. I think its pretty rare for a university firewall to block internet gaming. We live in an age of piracy, and online authentication is an effective method of DRM. 10 years from now most people will forget than games used to have LAN play.

Fábio Bernardon
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@Sean Francis-Lyon The number of sales will likely remain unaffected by the LAN removal. People that would not buy it before won't do so now. And it will be hacked to work with LAN, using a fake Battle.NET in this case. Such resolutions have not prevented piracy before, and are unlikely to do so in the future. This is just a hassle for legitimate users IMHO. Plus, online authentication has never stopped piracy. The worse that may happen to Blizzard is the same that happened to EA and Spore - although I believe that even so SC2 will do better than Spore.

Joshua McDonald
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"I would be willing to bet that Starcraft 2 will get more sales without LAN than it would with LAN."

There are two sides to this. On the one hand, LAN play allows people to do multiplayer with a single copy. On the other hand, allowing that is a powerful way of spreading your game. Over the past several years, my friends and I would invite people over to LAN parties, install the game on their computer, play with them a few times, then our friend would go out and buy the game. We sold 3 copies of Dawn of War that way that probably would never have been bought otherwise (possibly more if our friends converted more people).

Add in people with laggy connections (my brother lives in the country and has satellite Internet...He won't be buying SC2, now, but certainly would have with LAN), people who have either dial-up or no internet (I can't remember the numbers, but I was very surprised when I heard the stats on it, even in the U.S.), and the overall bad press, I have my doubts as to whether it can sell as many without LAN play.

Obviously there is no way to be certain which is more effective, since we can't perform a completely controlled experiment, but there is a lot of force pushing both ways.

Even myself, I switched from "I'll buy SC2 opening day" to "I'll keep an eye on it and consider it after a price drop."

Sean Francis-Lyon
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@Fábio Bernardon:

Online authentication works quite well. How many people pirate WOW? It will be hacked to connect to a fake (non-official) server, but using such a hack will be significantly more complicated than downloading and running an exe. People already know how to use bit torrent, but beyond that it doesn't take much for a hack to be too complicated for your average Joe to use. It will be an inconvenience to legitimate users, but it will also stop a lot of pirates.

@Joshua McDonald:

"there is a lot of force pushing both ways" is certainly true. I didn't think about how many people have poor or no internet connections, though I still think no LAN will result in more sales.

Christopher Wragg
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@Sean Francis-Lyon

in this instance I'm not sure Prevents Piracy = sales. SC1 is still popular enough that if a LAN implementation of SC2 becomes awkward in any way shape or form a lot of people won't bother. Surely there's a better implementation, like the ability to install a lightweight client that allows for LAN play, but no single player or online play. Surely that would generate more revenue than just saying no to LANs altogether, you'd lose naught to piracy because outside of a LAN environment the lightweight client is useless.

Simon Collins
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@Sean Francis-Lyon

Its true that WoW doesnt suffer as much piracy, however consider that perhaps that is more due to the persistent nature of the in-game avatars and their associated inventory/skillset that the player uses to interact with the games elements and accomplish goals as well as achieve recognition etc.

A game like starcraft really only offers persistence in the form of the identity of the player, their reputation, and their stats.

There is no levelling or inventory issues with starting an account on an alternative Bnet service, you take all your player skill with you, and can probably use your recognized handle as well. Lack of stats and reputation dont prevent you from fully experiencing the game wherever it's hosted.

So there is a lack of significant incentive to be loyal to any particular hosting/matchmaking service.

Also consider the various pro starcraft groups that have formed around their own hosted service or regular LAN events. Although i expect they will be willing to integrate with whatever tournament options the new Bnet service will offer, will they still be willing to take on the risk of their connection to the Bnet service being undisrupted during a live televised event?

Finally we have the viral marketing that occurs in workplaces and universities where people bring a game in for others to play and thereby encourage more players to buy.

I think its a given that if they refuse to provide LAN functionality, an emulator will be out in no time (irrespective of its relation to pirated versions) to solve these problems for the interested parties.

So its not the end of the world in either case, just opportunity lost for the publisher/developer.

Maurício Gomes
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Oh yeah, I forgot about the conection issues too, here in Brazil Blizzard games are wildly popular (maybe because they are good, and are one of the few AAA games that are cheap, since stores here sell Warcraft III for 10 USD...), but they are popular in LAN play, because the massive majority of the populaiton has dial-up and a good portion has no internet at all.

Vix Remento
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My take on it...piracy will be big with this one. I'm not longer going to pay for this game - even though I'd like to play the single player the real value was in the multiplayer (and I did buy the original SC2 - in fact I've bought just about every game created by blizzard).

When HL2 came along it was also a stab to the chest. I was able to play episode 2 without having to connect to Steam thanks to some clever chaps out there...and I'll be doing the same with episode 3. At least this way I'm guaranteed that I can replay the game again in 20 years if I want to (even if Steam possibly no longer exists).

Sure I'll have to wait before I get to play SC2 SP but it won't be as long as I'll have to wait for the LAN...but show me how this has helped Blizz to increase their sales when there are people that would have cracked this anyway. They really did give us all the finger...and they're sitting behind some one way mirror looking at us and laughing (while rubbing their fat wallets).

Oh and one more thing on the cancer attached to them (activision) we really care if they pull support for PS3? I mean honestly they create CRAP these days - they can shove "DJ Hero" and Tony hawk where the sun don't shine!

Looks like things are warming up...the Blizzard is starting to fade.