Why Activision Blizzard Is Considering Mobile Gaming For World Of Warcraft

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ATVI: Activision Blizzard logo
ATVI
Activision Blizzard

Activision Blizzard (NASDAQ:ATVI), the developer of world’s biggest MMO World of Warcraft (WoW), has announced that it is looking at porting WoW to mobile devices. [1] The announcement has come at a time when WoW has been experiencing a continuous decline in subs over the past one year. Here we try to look at what factors are causing Activision to look beyond PCs for WoW. Activision Blizzard competes with other game developers like Electronic Arts (NASDAQ:EA), Take-Two Interactive Software (NASDAQ:TTWO) and casual gaming mainstays such as Zynga (NASDAQ:ZNGA).

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The Move Can Be A Potential Remedy For Declining WoW Subs

World of Warcraft (WoW) is officially the most played massively multiplayer online role-playing game (MMORPG) throughout the world with a subscriber base surpassing 10 million+ members. With the high gross margins associated with the MMORPG genre, WoW is very profitable for Activision Blizzard. However, the reign of WoW has been under constant threat over the past year, with the total number of subs declining from 12 million+ in December 2010 to 10.2 million in December 2011. The reason behind the decline is the emergence of free-to-play MMOs as well as the successful launch of EA’s Star Wars: The Old Republic (SWTOR), which has given WoW a run for its money.

In the last few weeks, we have seen Activision Blizzard trying desperately to address the declining subs for its leading game. Recently Activision tactfully linked WoW with Diablo 3, by providing free Diablo 3 copies to WoW’s annual pass users in order to scale up WoW’s subs. We believe the move of porting WoW to mobile will also be in-line with these efforts.

Emergence of Mobile Devices in Video-Gaming Arena

With the rapid digitization of the video-gaming industry and enhanced capabilities of mobile devices after the arrival of smartphones, mobile devices have emerged as a credible platform in the video-gaming space. Mobile gaming is being touted as the next big thing in video games and it’s natural for a MMO as big as WoW to enter the mobile gaming market.

However, mobile-based MMOs are still a relatively unexploited market. World of Warcraft is facing stiff competition from SWTOR and other free MMORPGs in traditional MMO market, while mobile-based MMO gaming is devoid of any significant heavyweight. Thus, World of Warcraft can capitalize the benefit of lesser competition if it makes an early entry into mobile MMO gaming.

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Notes:
  1. Blizzard weighing mobile gaming app for WoW, Source: Herald Sun []