World of Warcraft Classic – A technical and business analysis

WoWClassic

First of all, I’m super excited that Blizzard announced a “Classic” version of WoW. I don’t even care about the new expansion “Battle of Azeroth”. I quit WoW about 1 ½ years ago because I was very much bored in doing the mindless, dumb down, and very repetitive expansions. I normally don’t post about games here but I have always enjoyed great games and being able to immerse yourself into different worlds is just cool. I’ve always been interested in how games are made as well.

In the last few days, I have read and watched several reactions of the WoW community on WoW Classic and the topic of Vanilla WoW in general. Lot’s of people are speculating on how and especially when this could play out. Everything I have heard and read about is pretty much based from a consumers’ point of view, the players point of view. I didn’t hear anything about why and how Blizzard can do this. We all know from the announcement that “it will take some time”.

However, I wanted to share with you the possible reasons why Blizzard decided to go this route of planning to release a Classic version of WoW. In addition, and more importantly, I wanted to provide you guys into a view of how Blizzard can do this from a technical point of view and what it would take to pull this off. This would help arrive at possible timelines and a possible number of players buying WoW Classic versus how many players will buy the new expansion and even making some other predictions.

Please keep in mind that what I’m about to present to you are my own speculations based on many years of technical expertise in creating and supporting small to very large software systems. I don’t want to bore you to death but I do want to point out my qualifications at least on the technical side to be able to give you an idea of what it would take for Blizzard to do this.

My qualifications

On my technical experience, I have been programming since 1985 and still do actively today. I’m a hands-on software architect working for a very large company. I’m currently in charge for a world-wide development and deployment project that is taking 2 years in the planning and active development. I’ve been in 10 different software industries ranging from real-estate, to banking, to healthcare, to automotive, to criminal justice, to aviation, and more. I can program in multiple languages and still do today from assembly (x86 mostly, even today) to high-level languages such as C (yes, C is high level when compared to assembly), to Java, to C# and others. In short, I’m a hands-on architect who designs, comes up with solutions and can also program it to the end. I also started several companies and still have a start-up company which is a cloud-based, world-wide Software as a Service (SaaS).

On my business side of things, I have great experience on what people really want but can not really express it simply because, software is hard as heck. I’m running a successful cloud-based software start-up while working for a large company. It’s running 24/7 world-wide without having us to intervene much because it was designed like that. Simple. I know what it takes to run a software company. Programming is just one portion of it. There are many other things to worry about in order to get software into the hands of consumers. This is one of those things I wanted to share with you.

Having said all that, this of course, still does not qualify me to speak for Blizzard since I do not and never did work for Blizzard and I’m not being endorsed in any way either. I have never seen any information about the internals of keeping the lights on and on how to be able to run WoW either. These are simply my own opinions. So, take it with a grain of salt.

What is WoW Classic?

At first, this should be easy to answer, right? Not so, it depends on who you ask. Let’s ask some players who are big fans of the Vanilla version including myself. I would assume this is what Classic would mean to them (correct me if I’m wrong in the comments below and I’ll update here).

Player’s point of view:

  1. Exactly the same game as Vanilla from 2004
  2. None of the new expansion features are “added-on” like LFG, etc.
  3. Literally the same game as if you would have bought it back in 2004
  4. The same computer system requirements as back in 2004
  5. Being able to access your characters for many years from now
  6. Perhaps some patches applied to fix bugs (we’ll come back to that one)
  7. Minus the bad launch experience (we’ll come back to that one)

So, from a consumer’s point of view, these seem very reasonable requests. However, there are technical challenges in which I will go into more detail later on.

Blizzard’s point of view:

  1. Additional revenue
  2. Additional revenue
  3. Additional revenue
  4. Let players access Vanilla 2004 content
  5. Let players experience the original game play
  6. Apply critical bug fixes
  7. Smooth roll-out with today’s hardware and software infrastructure, world-wide
  8. Smooth support
  9. Prolonged marketing and name recognition

This could be a definition of what WoW Classic could mean for Blizzard. For the why and how, read on.

Why WoW Classic?

Why would Blizzard announce a Classic version of WoW? Notice that Blizzard did not announce “World of Warcraft – Vanilla”. This could be just a marketing idea because “Classic” could mean many things such as:

  1. Original vanilla
  2. Original vanilla plus BC
  3. Original vanilla plus BC plus ROTLK
  4. Original vanilla plus BC plus ROTLK plus …
  5. Heavily modified game engine with Vanilla content
  6. Heavily modified game engine with Vanilla content plus expansions
  7. New game engine with vanilla content
  8. New game engine with vanilla content plus expansions over time
  9. etc.

As you can see, Classic could leave the door open to multiple options on what to deliver and what that really means. It buys some time as well. Back to why Blizzard would create a Classic version.

There are three obvious reasons and it makes perfect sense:

  1. Additional revenue
  2. Additional revenue
  3. Additional revenue

Blizzard is a company and needs to make money. As a company, you are not here to make friends, you are here to make revenue and keep increasing revenue whenever possible. This seems obvious but it is super important to keep this mind. Almost all decisions Blizzard is making drives around this fact. So, let’s look at the financial aspect of it.

Since 2004, Blizzard has gained monthly subscription accounts and peeked at 12 million accounts in the second half of 2010. However, since 2011, Blizzard has lost players over time by no longer paying the monthly $15 subscription fee. Each expansions introduced a slight peek but then the number of accounts fell shortly afterwards. It never again reached the 12 million subscriber number. At least that is what we know of since Blizzard no longer publishes these numbers for obvious reasons. Why tell anyone that you are loosing your core customers? This is not something you want to announce. You don’t want to tell potential future customers that your existing customers are leaving by the millions. This makes perfect business sense.

It is estimated that Blizzard currently holds around 4.5 – 5.5 active and paying WoW subscribers. Say we take a wild guess and estimating an average of 7 million subscribers on a yearly basis since 2004.

Revenue (avg):

$105,000,000 / month
$1,260,000,000 / year
$16,380,000,000 total, since 2004 (that’s 16$ billion)

This does not even include any of the add-ons such as transfers, gold, pets, etc. Pretty impressive, over 16$ billion in revenues based on a game. At first, it does look great. However, let’s take a closer look on trying to gain more revenue for a company, rather lost revenue.

You gain some, you loose some. That is normal. Players stopped playing even in 2005, we just don’t know those numbers because all we heard how WoW was taking over since 2004. But, let’s just take a look at the falling numbers since 2011. That is 7 years of lost revenue for many, many reasons. If we assume that Blizzard could have held the 12 million accounts since 2010 until today, Blizzard should have generated:

$2,160,000,000 / year

but it didn’t so we assume the $1,260,000,000 / year number. That is a lost revenue of 900$ million per year. That is a lost revenue of:

$6,300,000,000 total revenue loss

That is more than 6$ billion in cash folks. This is some serious money. Like I said, there are many, many reasons of why these numbers fluctuate. Computer games in general are short-lived. There are many reasons why WoW is still the king of MMORPG’s though. I think we all know the reasons.

From a company’s point of view, I would say the question would be: “How can we recover this lost revenue?”. How could this be even increased and surpass any previous revenue records? These are the questions Blizzard should ask itself.

Another question would be, “How can we slow down or stop the decline of new and existing subscriptions?”

I’m not saying that Blizzard will ever reach 12 million subscribers again for sure. But you never know. I believe it is possible to reach 12 million subscribers again. Let me explain. Since 2011, Blizzard lost 5 million customers each year. I’m not talking about keep the same 5 million people across 7 years. That is just one part of it. That is 5 million core customers lost that includes any new players that Blizzard could have kept over the years. That is the ideal scenario.

I believe that Blizzard knows it can bring back at a minimum 5 million old customers back given the right conditions and timing. All you have to look at is the internal data of lost customers which we do not have access to.

  1. Prediction: 5 Million WoW Classic sales

My first prediction is that Blizzard will be able to sell, easily I might say, 5 Million WoW Classic copies of the game. That is roughly $100 million in revenue right there. If Blizzard requires to have active subscriptions, that would be $75 million per month or $900 million per year. That is 4.5$ billion in 5 years. That is some serious cash just from a Classic game.

I can tell you this from my experience, if I had roughly 1$ billion in almost guaranteed revenue per year, you bet I can solve all technical issues. More on that later.

Now comes the ripple effect. Even if those 5 million “returned” customers drop out and no longer play, because they have an active subscription, they might be interested in purchasing the latest expansion. Great for Blizzard. But, let’s be realistic for a moment. If Blizzard gains 5 million returned customers, how many would stick around to level 60? It’s hard to say but my guess would be that it would be the majority of those 5 million if you consider “Why” these customers are coming back.

  1. Prediction: 4 Million active WoW Classic subscribers month over month

So far, I gave you mostly the financial justifications. But there are other many other reasons why Blizzard would want to come out with a WoW Classic edition:

  1. End illegal legacy servers around the world because of the lost revenue and no longer have to spend legal costs to do so
  2. Make customers happy. This has a halo affect and drives many other sales within Blizzard’s offerings.
  3. Keep internal staff excited and stay with Blizzard. Like other companies, Blizzard needs to worry about keeping its top talent. This is an unspoken rule. Money won’t help here. People that work in the software industry want their work to be seen and excite others. That’s what it’s all about.
  4. Make WoW challenging and not dumbed down. Blizzard won’t be able to do this with the current version and would risk loosing existing customers. The Classic edition has that built in, free. You have to work your butt off and worry about a lot of aspects of the game in Vanilla. This is much more challenging than the current dumbed down WoW.
  5. Simply no longer have to deal with internal company debates of doing a Classic or not. This kind of energy can be put into the creative process of putting out a Classic edition. And also no longer have to deal with customers constantly asking for Vanilla.

I’m sure there many other reasons. Please let me know your thoughts and I’ll add them here.

What are the technical challenges?

First of all, I heard people saying that Blizzard may no longer have the source code. I can tell you right there with 100% certainty, that this is complete hogwash. Of course, Blizzard has the source code from the very beginning. As a software company, the source code is your bread and butter. You treat the source code like it is gold. It’s put away safely so the source code itself especially master source code is physically protected and multiple locations that very few people have access to. Blizzard has every bit of source code, I can guarantee this. So, let’s drop that myth right there.

Why is having the original source code important? Let me explain. Like it was announced, “We want to recreate the original Vanilla game experience but not the launch experience”. This exposes a lot of information to me. What this tells me are the following:

  1. Blizzard wants to utilize all of its experience acquired in creating and maintaining software
  2. Blizzard does NOT want to recreate bad experiences for its customers if preventable
  3. Blizzard wants to utilize modern software tools, techniques, and infrastructure
  4. Blizzard can not use the original source code the way it is if it wants to do any of the items above
  5. Blizzard must, at a minimum, modify existing server and client software if it wants to do any of the items above

I’m pretty sure Blizzard did its due diligence and analyzed the original source code and got a rough idea of how much work needs to be done to the server and client software before the announcement was made. Keep in mind there are four, large, technical components to make this work:

  1. Client software. This is the software you and I have installed on our computer
  2. Server software. This backend software we never see and is maintaining everything the the client software can not and should not do. For example, I’m not talking about just “one” physical server. This backend infrastructure has many servers working together around the world 24/7 and allows players to play the game wherever they are. It enables for players to see and talk to other players. And so many other things.
  3. Infrastructure. Back in 2004, the Internet existed but there was no cloud-computing concepts, yet. With today’s technology and the power of cloud-computing, it has changed pretty much everything we do today in software development. This is not just the software itself. This also includes networking infrastructure, security, maintenance of the servers in each region of the world, and so much more.
  4. Maintenance. Blizzard needs to backup and maintain the software and the more importantly players data such as your character information. The good news is, today’s storage capabilities in cloud-computing is dirt cheap. When compared to 2004, data storage is practically free in a cloud environment.

Here comes the interesting piece of why this will take some time for Blizzard to release a Classic edition.

  1. Blizzard will need to modify existing client software to take advantage of modern capabilities such as communicating differently to its server software than the way it did back in 2004’s version of the server software. This really depends on how the software is designed. Is it designed so co-mingled with infrastructure that it is hard to separate? Or, was it designed to easily replace certain parts of the software with other, newer parts? This is one of those difficulties of creating and maintaining software. Is it crappy software quality inside or is it high quality software. Only Blizzard knows.
  2. Blizzard will need to modify or even replace the server software. Blizzard wants to take advantage of modern infrastructure such as cloud-computing. There is a good chance that Blizzard can actually throw away old server code because cloud-computing components may already provide a lot of functionality that Blizzard had to create and maintain back in 2004. At a minimum, Blizzard will need to modify existing server software. This is probably the most important part of the entire WoW Classic edition. This piece must work really well and Blizzard will spend most of the time on this area.
  3. If the current resources working on the new expansion can not be used for this, Blizzard needs to hire additional staff under the guidance of the original, 2004 Vanilla team members. The great advantage Blizzard has here is that it knows how “not to do things”. What I mean by that is that because 13 years have passed, Blizzard must have learned an awful lot on what works and what doesn’t work. So, hiring top talent to get the job done also takes time. It’s not easy to find the best of the best. This really depends when Blizzard starting this process.
  1. Prediction: WoW Classic will be released 4th Quarter 2018.

Given the items above and given the capabilities of modern software and cloud-computing and the right number of top talent to work on this, I believe Blizzard can pull this off to release WoW Classic by the 4th Quarter of 2018.

Here we are, a few ideas and speculations from my end. Let me know your thoughts and if I’m completely off and gone crazy. I know we all want this happened by Christmas, 2017. But, that’s not going to happen, or will it? Haha.

I will see you in Classic.

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