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Analyst: Asia Accounts For Just 6 Percent Of  WoW  Revenues
Analyst: Asia Accounts For Just 6 Percent Of WoW Revenues
July 31, 2009 | By Kris Graft

July 31, 2009 | By Kris Graft
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Activision Blizzard's World of Warcraft has been down for weeks in China, as the hugely popular MMORPG switches operators from The9 to NetEase -- though it has just relaunched to existing users in free, 'closed beta' form.

But Lazard Capital Markets analyst Colin Sebastian said in a Friday research note that the financial impact on Activision Blizzard from the downtime will be "modest," partly because Asia makes up just 6 percent of total worldwide World of Warcraft revenues, he estimated.

"While Asia accounts for roughly 50 percent of global users, we estimate the region contributes less than 10 percent of total WoW revenues, due to the licensing structure and timecard model," he wrote.

A March report from PC Gaming Alliance estimated that total worldwide WoW revenues are around $1 billion yearly. In the West, players pay a monthly subscription of around $15 per month for the game. In Asia, players instead access accounts using time cards, which are depleted as players log in and play WoW.

The analyst said that currently, Europe and North America each bring in 47 percent of total worldwide WoW revenues. Sebastian also said any losses from the Chinese WoW downtime should be "more than offset" by a higher royalty rate from NetEase, and an estimated $25 million up-front payment from NetEase to Activision Blizzard.

Sebastian surveyed WoW players at the recent ChinaJoy games convention in China, and found that 74 percent of those polled will continue playing the game once it's back up and running. Fifty-six percent of respondents plan on increasing WoW play time. "Overall, we are encouraged by the survey takeaways, as they suggest the majority of previously active Chinese WoW users will resume playing," he said.

Sebastian added that Blizzard stands to lose some of its 11.5 million worldwide WoW users due to the rough transition to NetEase. But WoW revenues in China could still climb to between $100 and $120 million, up from $70 million under The9, as he expects better service and "more predictable rollouts of expansion packs" from NetEase.

WoW may be up and running relatively soon, as the game is in closed beta in China with its new operator. The game has been down for more than a month as government regulators work to approve the operation. Data released at ChinaJoy said online games in the country generated $2.2 billion last year, a 77 percent year-on-year increase, with online gaming's global market is "approaching $11 billion," the analyst noted.

Alongside the report, Lazard released their own estimates on subscriber and revenue mix for World Of Warcraft worldwide, sometimes a hotly debated topic:

wowsubmix.jpg

wowrevs.jpg


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Comments


Jr Hawkins
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I was always curious to how Wow Asia actually worked. I always assumed time cards but never had valid evidence. I wish they'd offer that option her in the west, but they probably would make much less money.


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