The Funeral of WoW Gold

There are a few pockets of strength and one can be found in the video game industry, Activision Blizzard Inc (ATVI). The video game industry is a high-growth industry, the hardware and software industry racked up over $21 billion in hardware and software sales in
2008 in the United States alone.

And even now, video game sales are enjoying unprecedented growth. For the month of February 2009, sales of game software rose 9% to $733.5 million. The results surprised many analysts.

The lion’s share of Activision’s (ATVI) revenue comes from online games. Activision makes the World of Warcraft series. World of Warcraft is an online, multi-player video game. The series has a strong following. Players join, log in to the World of Warcraft website and embark on intricate fantasy campaigns alone or in groups formed with other players from around the world. And yes, there is a subscription fee. There is even prize money to be earned for Activision’s gamers. Right now, there’s a $200,000 top prize offered. Surprised? Well, would you be surprised that Activision currently counts its subscribers at over 10 million?

In 2007, a new installment to the World of Warcraft series, The Burning Crusade, became the fastest-selling PC game of all time. It sold 2.4 million copies in the first 24 hours. That record didn’t last long. Activision quickly followed up that success with Wrath of the Lich King in 2008. That game sold an amazing 8 million copies in 24 hours. Now that’s what we call a motivated consumer base. And that is a good reason to like ATVI. 

As a PC -based, online game, you don’t have to buy a special game console (like an Xbox, or PlayStation). You can use your computer to log on and play anytime. Provided you’ve paid the subscription fee, of course. This lowers the barriers to entry, and expands the possible pool of consumers for PC-based online games which ATVI produces. From the consumer perspective, your start-up costs are minimal.

And the consumer does not have to worry about damage to a hard copy of a purchased game. World of Warcraft is doing $1.1 billion a year in sales. That’s a third of Activision’s revenue.

As fast as Activision’s revenues are growing, it currently trades with a very attractive P/E of 14. Plus, the company has no debt and $3 billion in cash. Trading at about $10 a share, Activision is an attractive buy. Shares of Activision Blizzard have fallen with the rest of the market in 2008. But has formed a nice uptrend since the start of 2009, the stock has been showing strength and this investor enthusiasm is well deserved. Activision Blizzard operates in a high-growth consumer segment and has a terrific balance sheet to expand through acquisition. ATVI shares are trading at roughly 15 times current earnings per share and 12 times forward earnings estimate. ATVI has formed a nice uptrend channel since the start of 2009. Technically ATVI looks solid trading above its 20 & 50 day moving averages. Beyond the March high of $10.60 the next area of resistance will come in at the 38.2% ($12.40) and 50% ($13.75) Fibonacci retracement levels from the July 08 high of $19.28 to the Jan 09 low of $8.24.The stock probably has room to move up to the $12.50-13.75 level in the next 3 to 6 months. Possible entry points to buy ATVI would be a pull back to the 20 day moving average or when ATVI moves to the bottom of the up trending channel. I would stop out on a close below $9.50.

Microsoft is apparently working on the next version of the Xbox.

No surprise perhaps, but that little nugget of information emerged from the “luminaries lunch” held at the Game Developers Conference.

For the second year in a row, a select number of journalists were allowed to come and eavesdrop on half a dozen industry players over sandwiches and wraps at the W Hotel in
San Francisco, which has become a sort of semi-official hang out during the week long event.

News of the successor to the Xbox 360 was dropped by Rob Pardo of Blizzard Entertainment, the company behind World of Warcraft and Diablo. He said that he had been in talks with Microsoft and seems to be the only developer that has so far been approached.

The issue came up when David Perry, a 25-year-old veteran who started in the industry aged 15, posed the question “What direction would you take Microsoft or Sony to ensure they lead and not follow in the console business?”

At first pass, Will Wright, the creator of the Sims and Spore, said he would like to “decline the job” while Warren Spector of Deus Ex fame and boss of Disney’s Junction Point Studios, indulged in a little mischief.

“I want to see what you guys are going to do with the Wii,” he quipped to Mr Pardo.

The Blizzard boss merely raised his eyebrows and kept his own counsel on that one.

To spice things up Mr Perry announced that “on the record the PSP is going to be a digital device. I know that for a fact.”

The discussion for a while rotated around content with Mr Spector saying too much of it is knuckle-headed.

“What we need to do is change the content. Am I going to get an axe in the head, or is it going to be a club? Which car or truck is going to be rolling down the street?” he asked.

“We don’t need another game about space marines saving the world, we don’t need another game about elves and orcs,” he concluded.

The discussion then took a decidedly weird turn when Mr Wright said “I’m sure half the people in this room have played the urinal game.”

As the room erupted into laughter, he tried to explain the premise of the game and went on to say “we need to make games about the world that are interesting, surprising and illuminating.

“We can make games much more relevant even across cultures and demographics.”

That comment came amid a conversation about social gaming which was sparked by a remark made at the recent BAFTA awards by Nolan Bushnell, who is considered the father of electronic gaming and is the inventor of Pong and founder of Atari.

He said that going to a bar is social, but that sitting in a darkened room communicating with thousands of people virtually, isn’t social.

A 40-minute discussion among these luminaries ensued.

“Social gaming is becoming cool,” said Mr Pardo who also paid reference to the World of Warcraft community and pointed out that “many of them have jobs, and kids”.

But Mr Perry questioned whether hanging out online playing games constituted a “real relationship”.

“Is it the same as having a beer,” he pondered.

“Who cares,” replied Mr Wright “If it’s real. If it has value that’s all that matters.”

Brian Fargo, who founded Interplay productions, said that all this “socialising online” has had a negative effect on his behaviour.

“I’ve become more antisocial as time goes on. I have a Blackberry and I have all these friends.I can’t tell you how many times I think I wish they would just e-mail me.

“This is a great philosophical issue. Are we becoming more antisocial? I probably spend more time e-mailing, text messaging than talking,” he said.

Neil Young the founder of Ngmoco, which makes games for the iPhone, noted that this “august” group of people were beginning to sound old.

“People who instinticlvely understand multi-tasking as a way of life and grew up with our medium are more willing to fully explore it.

“I would argue next year none of us should be here (at the luminaries lunch). We should figure out who the top six freshest game makers are. I bet you will have different talk and they won’t talk about fantasy games or sci-fi.”

The PC games biz was worth around $11 billion in 2008 including massively multiplayer online games, says a new report from the PC Gaming Alliance and DFC Intelligence.

According to the report, the growth of online digital distribution, the growth of free games with a virtual item purchase model, and the sale of game cards at major retailers like 7-Eleven were the three biggest trends of the year.

That $11 billion figure makes the PC the largest single games platform in the world, says the PCGA, and the lead platform in both developed and emerging markets. The North American and Western European market alone had revenues of $6 billion in 2008.

The report says top games regularly generate over $50 million at retail revenue, with MMOs generating over $100 million in annual revenue after 5+ years. World of WarCraft’s annual revenues are put at $1 billion.

In emerging markets like Eastern Europe and
Southeast Asia, the relative rarity of high-end systems has been a major driving force for online casual games. Major portals such as Pogo and Yahoo! now generate over $100 million in annual revenues.

The PCGA is a non-profit organization consisting of game publishers, developers and hardware manufacturers interested in promoting the PC as a games platform. The new report was compiled by research and consulting firm DFC Intelligence, and can be read in full at the PCGA website

The IGDA Education special interest group keynote this year was delivered by Jane McGonigal, director of game research and development at the Institute of the Future and notable ARG designer (ilovebees).

Here, she asked the question: “Are you optimistic about the future?” (incidentally you can receive her slides automatically by mailing slides at avantgame.com.)

“I think game developers have some of the most reason to be optimistic out of anyone on the planet,” says McGonigal. She proses that about
1 in 2000 people have a chance of altering their own future.

“That’s based on the concept of having 3 million game designers, developers, hackers, and counting. I have determined that game platforms are the best thing we will have in terms of determining the future.”

The great work of game designers over the next decade, says McGonigal, will be to redefine life as we know it. Games, she says, have the power to change our actual world.

There are 5 key forces that drive us toward a game designer’s future, she says. These are:
1 – sustainable happiness
2 – persuasive technology
3 – the engagement economy
4 – programmable reality
5 – superstructing.

Though her arguments for each can’t be replicated perfectly here, I will address some of her salient points.

McGonigal says that to be happy, humans crave: Satisfying work to do, the experience of being good at something (comparatively), time spent with people we like, and a chance to be a part of something bigger.

“These four things are what games do,” she says. “Positive psychology is coming to the conclusion that multiplayer games are the ultimate sustainer of happiness.”

Scientists agree as well that that dancing with other people creates a perfect happiness, because brains sync up if people dance to the same beat, and this elicits a very strong sense of happiness, akin to the strongest opiates.

“How can people dance together without being humiliated?” she asks. “But then I did more research and I found out that when people get humiliated, they get even happier!” Humiliation is a way of showing people we’re vulnerable – and they like it because they gain power. We are happier when we’re humiliated around people we trust.

Wikinomics says that “we must collaborate or perish.” McGonigal points out that it took 100 million mental hours from a highly diverse knowledge community to create Wikipedia.

It’s hard to get people to collaborate on things like this, but “It’s not hard to get people to contribute cognitive hours to a game, or a game world,” she says.

“It might only take 5 days of World of Warcraft to create Wikipedia,” considering the vast number of players. “There’s no reason why we can’t take real world work and real world problems and seductively conceal it in a game world. Gamers have no problem doing work and doing collaborative things, you just have to figure out how to make them care about it.”

“The idea is that game developers over the next decade and beyond, will be able to remake reality. Make us happier, make us smarter, and make the planet more resilient,” she added.

60% of kids in developing countries are gamers, and 97% of kids in developed countries consider themselves gamers. So it’s just up to developers to forge this future, McGonigal notes. A post-session Q&A echoed some of my skepticism, asking if developers have all this power, why haven’t they already done it?

To this point McGonigal offered: “We’ve been building up an arsenal of strategies for reinventing the human experience, and maybe we’re starting to realize that some of our games are more powerful than we anticipated. We didn’t know our own strength.”

“I think we’ve been a little seduced by our power to engage people. I think maybe only recently have we come around to the idea that we have to use that power to do good. We haven’t done it because we’ve been so good at what we’re already doing that we haven’t felt motivated to do it. But now that the world is sort of falling apart, people may be thinking about doing something.”

A startup wants to do away with consoles, games resellers, and expensive graphics chips.

OnLive, a Palo Alto, CA-based startup wants to do away with gaming consoles, game resellers, and the need to buy any more expensive graphics chips. Today the company announced a service that lets any computer run the sorts of graphics-intensive video games traditionally reserved for high-end gaming systems. Games can also be played on a TV using a small device offered by the company that connects a television to a broadband Internet connection.

The idea is to separate games from consoles or desktop computers, says Steve Perlman, founder and CEO of OnLive, a spinout of a Silicon Valley-based incubator called Rearden.

The intense computation needed to render each game happens remotely, in a specialized server farm with thousands of computers crunching numbers. But critical to the success of the venture will be a number of new compression algorithms developed by the company to let even the most graphics-intense games–including the realistic first-person shooter Crysis–render on a player’s screen in real time.

Perlman, who helped develop the QuickTime video compression format while at Apple, says, “You don’t need a high-end PC to run these games. The all-digital distribution means that you’ll never need to upgrade the hardware in your home.”

The idea of playing video games via the Internet is nothing new, of course. Companies such as Microsoft, Sony, and Nintendo offer online services that let players collaborate and compete over a broadband connection. But these games are still tied to their companies’ respective game consoles. World of Warcraft, a popular, massively multiplayer online game, streams content to a player’s computers via an Internet connection. But, as any player knows, one of the biggest problems with the game is that players must often wait for the on-screen visuals to catch up to their instructions.

“You still need a pretty respectable PC to run World of Warcraft,” says George Dolbier, CTO at IBM’s gaming division. “Games need to be very responsive to user so when you push a button, that game better react instantaneously; the big technical problem is when you push a button at home and it’s actually running at a computer potentially thousands of miles away, there’s going to be a lag,” Dolbier says. “Solving that problem has been a major challenge that Rearden has been aggressively tackling for some time.”

Perlman believes that OnLive’s compression technology can solve this problem. Most of the game processing and compression occurs where the powerful hardware resides: inside data centers with specialized graphics-processing units. Still, while compression schemes for video need only to compress data from a source to a viewer, video games need to compress data both ways–from a source to a player and back to the source–so that the servers can compute the next move. Without giving away too many details of the proprietary approach, Perlman says that OnLive’s algorithms consist of a feedback loop that constantly monitors the network that a player is using, trying to anticipate and adjust for the inconsistencies of Internet traffic.

Dolbier suggests that the compression algorithms used may also send as little information as possible over the network, anticipating variation from frame to frame with minimal amount of back-and-forth communication.

The basic requirement for running OnLive, says Perlman, is a 1.5-megabit-per-second Internet connection. But to run the service on a high-definition screen, he says, the connection needs at least five megabits per second. OnLive has already partnered with major games companies including Electronic Arts, Ubisoft, Take-Two Interactive Software, Warner Bros. Interactive Entertainment, and Epic Games. The company demonstrated 16 of its titles today at the Game Developers Conference in
San Francisco, CA.

In order to use the service on a PC or a Mac, a person will need to download a one-megabyte program. To use OnLive with a digital television, a person will need the company’s MicroConsole device. The company will offer its own gaming controllers, but standard controllers can be used as well.

OnLive will be offered as a subscription service, says Perlman. When a person logs on, she can access a menu and choose games to rent, buy, or try. She can also watch other people play and play with others from around the world. Other features include the ability to record the last 15 seconds of play and share these “brag clips” with others.

By removing the need for expensive graphics cards for PCs and games consoles, OnLive “has the potential to dramatically open up gaming markets to people who wouldn’t have participated otherwise due to the initial cost,” says Dolbier. In addition, he says, OnLive could lower the cost of producing games (a single game can typically cost tens of millions of dollars to make) because it would only need to be made for one platform, rather than customized for Xbox, PlayStation3, and Nintendo. “It’s an excellent idea to expand the markets,” he says.

Opinion: Now shut up and keep grinding
I think we’ve all spent so much time playing World of Warcraft that we’ve started to mistake it for an actual country. So when the ruling Blizzard party passes a law banning add-on authors from advertising or soliciting cash donations within the game, we all react as if it is a civil liberties issue.
It’s not. WoW is a game, not an economy. Blizzard isn’t against wow gold farmers and powerlevelling services and nagware add-ons because it wants to be the only one to make money from WoW. Blizzard is against them because it wants to protect the image of WoW as a fun game, which ultimately is the best way to protect its own revenue. Blogger sites are predicting the imminent implosion of the add-on community, but the reality is that there are really only two commercially run add-ons affected by this new rule.
The first is Carbonite, an add-on that makes questing easier by telling you where to find things. This has two versions, one paid for by subscription and a lite version that nags you in-game to upgrade to the paid version.
The second is Quest Helper. QH is the most popular add-on in the game, with over 20 million downloads. It does much the same thing as Carbonite but it is paid for with donations. There is a nag message in game to prompt you to donate.
Both add-ons sound as if they are doing the same thing in the same way, with the same commercial motive. But QH is a voluntary project that became a full-time job for its author because it was popular enough for discretely solicited donations to pay the bills, whereas Carbonite was run as a money-making exercise from the start and exhibited a lot of the web sleaziness you see from wow gold spammers and powerlevellers. In other words, Carbonite is the bathwater and QH is the baby. It’s a shame they both had to be thrown out together, but it’s hardly the end of WoW add-ons.
I still believe that the game as a whole is improved by the new rules. Virtually all add-ons are free because they are developed by enthusiasts who just want to make the game better. If people only worked on things that directly resulted in financial reward, none of us would have exalted reputations with any faction. Yes, you should be fairly recompensed for your hard work. But programming WoW add-ons isn’t work, it’s a hobby.
Or at least, it is now.

Demand for subscription massive multiplayer online games (MMOG) will top $2bn (£1.3bn) by 2013, according to a new report.

The study, by analysts Screen Digest, said the market had been driven by attempts to emulate World of Warcraft.

The findings suggest that the MMOG’s market in Europe and
North America grew by 22% and was worth $1.4bn (£0.9bn).

There are at least 220 active MMOGs, although many of these are exclusive to South East Asia.

Speaking to the BBC, Piers Harding-Rolls - senior analyst with Screen Digest - said that despite the recession, subscription MMOG’s were still showing significant growth.

“Some games are eroding World of Warcraft’s (WoW) position - Warhammer Online and Age of Conan being the two most significant - but that’s more down to their growth rather than any decline on WoW’s part.

“WoW’s market share was 60% in 2007 and 58% in 2008, but in terms of revenue, it went up year-on-year and is still going big guns.

Mr Harding-Rolls said that a combination of new title releases, different payment systems, and games that target specific demographics had helped the rise in popularity of MMOGs.

“If you look at the example of RuneScape, this is a game pitched at a teenage audience. You can play it for free or you can pay a premium and get a better service without advertising.

“It’s an effective way to build a subscription base, rather than the traditional routes that involve PR, hype and having a service that has to be almost perfect from day one,” he said.

The report examines revenue made from subscription based services, rather than total player numbers, in Europe and North America.

Size matters

Some games - such as the German title Panfu and Tribal Wars - are in the 10 most popular games when it comes to player numbers, but not in terms of spending.

In addition, some games - such as Warhammer Online - were released late in 2008 and so didn’t make the list. However, Mr Harding-Rolls thought that Warhammer would be one of the top three when next years list comes out.

There has been much speculation on how the video games industry would fare during the recession, with many experts - such as the British veteran game designer, Peter Molyneux - expecting a lot of price pressure on games.

Mr Harding-Rolls said that, for now, it was a case of wait and see when it came to MMOGs.

“Under the current conditions, it will probably be harder for publishers to pick up new customers and gamers who have multiple accounts on different games may well scale back which game they play.

“That said, playing a video game - especially a MMOG - is a low value proposition to a user and once you’re a subscriber you’re likely to stay a subscriber for at least a few months.”

know what you’re thinking.  You saw the title and considered not even reading this article.  Keep an open mind and hear me out.  I too was convinced this game was only for nerds—a modern day version of Dungeons and Dragons.  I figured since I don’t live in my parent’s basement and I don’t have a collection of Star Trek figurines, that perhaps this game wasn’t for me.  And I’m sure you’re thinking the same thing right now.

The first time I heard a friend talking about this game, I was not entirely convinced.  I heard the game was really addictive (and not in the good way, but the unhealthy Chinese-kid-played-until-she-died way.)  I like games, and have played many longer than I should have, so I decided to steer clear of Warcraft because of its rumored addictive nature.  That and it has a horrible stigma of being a nerd game.  After running into more people who played the game (and didn’t fit the stereotype), another friend finally convinced me to play.  The antithesis of nerdiness, this friend is a war veteran and has a hobby of brewing his own beer.  Not only would he be good in a street fight, he also is very knowledgeable in the World of Warcraft.  So I gave it a try.

One of the first things I noticed about this game was scope of the landscape.  The world in which you play is basically four continents.  Not to be confused with four levels—this game isn’t really like that.  Imagine you started walking from
Toronto, bought a horse in Kansas, took a boat from California to Australia, and then flew to Brazil, all the while sight-seeing and picking up souvenirs.  That’s how big this game is.  To say that it’s big or huge is an understatement.  You need a made up word like ‘ginormous’ to begin to convey it.

If you played Grand Theft Auto: San Andreas, you’ll be right at home with several of the game mechanics.  In WoW, you’ll find yourself picking up quests at point A, kill some dudes at point B, and return to point A for your prize.  That may be oversimplifying it a bit, but you get the point.  While playing San Andreas, you may not have noticed the RPG elements all around you.  As you progress in the game, you upgrade your clothing, weapons, armor, and physical stats—just like Warcraft.  If you’re in the mindset that you don’t like games like Warcraft, you may have played more than you know.  If you liked San Andreas, you’re already one step ahead of other players.

I normally don’t like role playing games, especially the turn-based ones.  Luckily for me, Warcraft isn’t one of them.  Action-RPG is what the kids are calling it these days.  I don’t have to wait my turn to burn someone to death, instead I burn them while they try to kill me.  It’s pretty fluid, and keeps you alert as danger lurks around every corner.  That’s why you can be like me and craft firearms.

“Firearms?!” you exclaim, in disbelief, “But I thought this game was like Lord of the Rings with dragons and swords and stuff.”  It’s all of that plus gunpowder.  There are guns, crossbows, daggers, swords, magic, you name it.  If you can kill someone with it, it’s in the game.  There are few things more satisfying in life than throwing a grenade at a gnome, or shooting a cow with a rocket launcher.  Hurling fireballs at giraffes and zebras is another favorite virtual pastime, all possible thanks to the World of Warcraft.

I understand that you may not be convinced yet, so I saved the holy trifecta for last.  There are zombies, robots, and pirates.  Any game is better with one of these, but all three?  It’s like an awesomeness overload.  I play as a zombie (the Undead race, to be politically correct), and as an engineer (that’s my job) I can build a robot to fight alongside me, while fighting pirates ( I need the bounty money.)  And while there are swords and dragons, some of us Warcraft players prefer guns and helicopters.  Yes, there are even helicopters.

So whether you’re looking for an epic journey from Joe Schmo to the Hero of all of Azeroth, or if you’d rather see what happens when you set an ostrich on fire, there is something here for everyone.  11.5 million people can’t be wrong.  You can download the ten day trial for free.  You’ve got nothing to lose, and I think you should give it a try—you might be as surprised as I was.

World of Warcraft (and its expansions) are rated T for Teen by the ESRB for blood, suggestive themes, use of alcohol, and violence.

 BEIJING, March 24 (InfoChina)-Online game operator and developer The9 Limited (NCTY.NASDAQ) hasn’t reached agreement with Blizzard Entertainment and is very likely to lose its mainland agency right on operation of “World of Warcraft”, according source familiar with the deal Tuesday.

The insider said that the American game runner, Blizzard Entertainment was unsatisfied with The9’s performance in the past four years and thus posed higher requirements in the discussion of extending its contract with The9, which has incurred The9’s resent and led to the miscarriage of the cooperation.

Market analysts say that the loss will exert heavy influence on The9 as 90 percent of its profit used to come from agency operation of World of Warcraft.

The9, however, declined to comment on the matter, saying the contract extension was still underway.

It is learned that The9’s contract with Blizzard Entertainment on agency of “World of Warcraft” will fall due in this June.

Product Summary

WoW MMO Gaming Mouse

Price at launch

£75.00

Key specs

Device Type (Keyboard/Mouse/Trackball): Mouse |

Full spec

For

Glowing design

Against

Awkward macros

Not a great design

Only useful in WOW

This WOW MMO Gaming mouse costs £75. Yup, you read that right, £75. For a mouse that only really struts its stuff in one game. Stop laughing at the back! Need more convincing?

Well, er… it’s got some swirls on its flared base, oh and can glow different colours. What’s that, you’re still not rushing out to buy one?

Well, you can assign macros to those buttons – although the actual macro tool is a pain to use, so maybe not such a great point. It’s got runes on it…

To be honest, we’re not convinced either, if any peripheral ever smacked of ‘cash in’, this would gleefully scoop the award. The finish would be more at home on a Halo accessory – indeed, if it weren’t for the WoW badge, we don’t think anyone would guess which game this was supposed to work with.

The weight and build quality is surprisingly uninspired, and in use there’s little support for the palm of your hand - it’s little more than ‘okay’, though those hooked on Arena matches may garner some cool tricks from those extra buttons, but we’re not convinced about that either.

A keyboard is a much better input option for normal macros than twisting your thumb round to use a D-pad on the side of this thing. There aren’t many games that justify specific hardware, and while WoW does offer an audience of 11 million eager players, this is so unremarkable and expensive as to be little more laughable.