World of Warcraft, WTF?

For the forthcoming book it was inevitable that I would look at World of Warcraft.

‘World of Warcraft’ is by any standard is the most popular computer game of all time. Since its release in 2005 it has built a steadily increasing following of loyal subscribers. 11.5 million people across the globe were paid subscribers as of December 2008. Nor is the subscription cost negligible. Subscribers in the EU pay approximately €131.88 per year, and incur additional charges to transfer their personalized avatar from one continent in the game to another or for altering the character’s appearance, or a range of other sundry services.

This cost is additional to the initial cost of buying the software to run the game, and updates that add new elements to the game. In the US alone, an estimated 5 million copies of the game have been sold at a cost of approximately €45 since 2005. Millions of players also purchased two upgrades to the game, released at approximately €35 each. On the first day of their release in January 2007 and November 2008 the upgrades  sold 2.4 and 2.8 million copies respectively worldwide.

The secret of the game’s enormous success seems to be (comments welcome) that players make a personal investment to small communities of other players who they meet through the game. Players form guilds to go on combat raids or quests together. Strong communal bonds develop between guild members. They also become attached to their own virtual avatar, which they groom and upgrade as the game proceeds. Subscription, personalization, and shared experience, these are the lessons WoW offers to other software producers.

Margins are healthy and sustainable. In September 2008 Blizzard revealed that all costs, from initial development to customer service from 2004 to September 2008 were circa $200 million. Included in this figure is over 50$M initial development cost. Profit = 11.5 M annual subscriptions (@ Eur 130 each)  + a guesstimate of an additional Eur 40 for sundry services and updates per year minus only 200 $M.

Moreover, the community of users keeps building, and their personal investment in their own characters and fellow guild members grows deeper. So what makes the WoW community tick? Is there a user-driven dimension? Is the game simply designed so well? Is it all about communities?