You literally asked me what my credentials are to be making claims that Blizzard made a bad financial decision. You’ve yet to refute my claims but kept pushing how important credentials are. If you’re not here to discuss my credentials then what are you doing? You’re not having a conversation with me, you’re not answering the questions I’m asking soo…
I will respect what deserves respect regardless of the credentials of the individual. I’m not going to respect someone’s opinion solely because of the credentials they hold. You’ve shown me that credentials mean nothing, if someone with a business background can’t refute my claims about Blizzard.
If you’re asking about career experience, I started with an accounting firm doing financial and tax audits for a few years. I moved on from that because I didn’t find tax audits enjoyable at all, but that’s mostly what I was stuck doing. I did enjoy financial audits though and that’s when I got to learn about a lot of the really unique systems used by companies to increase sales.
I moved to a local non profit, starting as a staff accountant and moved up to senior accountant, which is when I starting getting a taste of board meetings. I began doing the presentations of the financials in that senior accountant role and moved up to controller, which really is pretty much exactly like a senior accountant except managing staff, too.
When my daughter was born a few years ago, I had to look for new work because non profits, although a great cause, just don’t have the funds to pay employees what they’re worth. Anyhow, I now work as an accounting manager and claims fund analyst at Taft Hartley trust fund, which is essentially an insurance company. My whole job boils down to analyzing expense and revenue data and suggesting changes to insurance plans and presenting that stuff to a board of trustees, which is just a board meeting with another name.
I don’t believe I said I was a CFO or part of a multi billion dollar company, but yes to successful hundred million dollar companies.
Edit: Also… morbid curiosity?! What’s unpleasant about numbers, accounting, and finance!? It’s fun! Except taxes.
Blizzard isn’t interested in the value of gems in one of their games. They are interested in real world currency because that is what keeps the company alive. Shards undermine the value of gems very slightly, that’s true, but probably not nearly as much as you think they do. In retail, there are generally 3 types of spenders that a business will look at: big spenders, savers, and shoppers. You can find variations on the names, but it breaks down to the following:
Big spenders: will buy what they want and enjoy immediately satisfaction (don’t confuse this with being rich, it just means if they want something, they get it)
Shoppers: will spend money if they feel like they are getting a good deal and tend to prefer purchasing things that have an extended life (like boosts and battle passes)
Savers: won’t really spend any money unless they have to
The large majority of people who outright buy skins and cosmetics directly are big spenders. They don’t care about boosts or playing to earn skins. Adding shards doesn’t really impact these people at all.
Shoppers won’t really spend money directly on a skin unless they really want it, however, battle passes and the boost in HOTS are aimed toward these spenders because it enhances gameplay by adding passive bonuses in addition to allowing those players to earn cosmetic rewards. Since these battle passes have a set duration, it increases the player’s play time during that period as well, which makes the game more active.
Savers generally don’t get targeted with purchases, however, many games offer free battle passes (or in HOTS case the chests with boosts) for savers in order to keep player counts higher. In addition, free in-game rewards like the chests and shards encourage these players to continue playing. Higher player counts encourage more big spenders and shoppers to play the game for very little increased cost. In the case of HOTS, it is literally an advertisement for all of Blizzard’s other games as well. So increased gameplay there is advertisement that increases spending across their other games.
It is very likely that you are in the savers category of spenders because the purchase of boosts and cosmetics doesn’t appeal to you and you enjoy being able to earn them through more hours of gameplay. However, your increased game play along with all of the other savers has increased the gameplay of big spenders and shoppers because it has kept the game more active.
So while there is a small impact in the value of gems (likely in the shopper category), there is a net gain in real world currency because they are increasing spending from shoppers, having almost no impact in spending from big spenders, and increasing the game’s activity across all consumers by increasing play time in the shopper and savers groups considerably.
Blizzard has targeted all three groups in three different ways because different things appeal to each of the groups. The gaming industry tries to appeal to all three groups because the consumer base for games is one of the most diverse consumer groups.
I can’t refute if you don’t believe something. What I can say is that Blizzard has an accounting team that is constantly monitoring their financial data and making financial decisions. Their net profit margin has been well above the industry standard for as far back as I can remember. They have to be making good financial decisions for that to happen.
You are looking at boosts and battle passes from a consumer perspective, not a business perspective. The business is using boosts and battle passes to increase spending from shoppers (the spender category from above, not shoppers in general) and increase shoppers play time. Blizzard doesn’t care what the products look like from the consumer’s perspective.
If you are a saver, very little incentivizes to purchase boosts or gems. Those products are aimed at big spenders and shoppers.
It takes a functioning brain to not have tunnel vision. You are not the only type of consumer.
Cool breakdown. So tell me again, how this method doesn’t make them lose money? By allowing shards to be purchased with in game gold and then shards get you what you want you’re missing out on income from shoppers and savers. Savers won’t ever buy gems and shoppers will search for the best deal, but there’s no better deal than free so they probably won’t be purchasing a lot of gems either, but they might have if they were required to (shards not existing).
Big spenders are every video game companies main source of income, but I’m pretty sure not all big spenders will spend money if they don’t have to. You’re just assuming they will.
Also, you keep mentioning battle passes, but hots has no battle pass. I understand people will buy Fortnite, CoD, or even Destiny Seasonal passes but boosts are not the same thing because boosts don’t give you cosmetics… only xp and hold. Those other battle passes grant full access to otherwise limited items. If hots had a proper battle pass your claims would make sense but since they don’t and boosts are no comparison are you seriously stating that boosts make enough money to have blizzard say “nah let’s just essentially make everything free just by playing”.
They cut devs, updates are gone, if your claims were true, and this would bring in more money for Hots, we’d have patches and new heroes like we used to. Blizzard states this game was never in the negative, but they also made lots of cuts in their team which requires less company spending on salaries and thus requires less income to be in the positive.
Do you seriously think hots would have been stripped to almost nothing if their finances were good? I don’t think so.
As someone who hates numbers, accounting, and finances, the breakdown was quite educational. And accomplishments and credentials do matter. They aren’t everything and you can still spout off your less experienced viewpoint, so I don’t know why that was such a sensitive sticking point.
This is just my own anecdotal evidence. I had all three types of consumers as friends. As a saver, I was totally content being a basic B skins on my seasonal masters mount. But once 2.0 came out, I just got free stuff and suddenly got to look as cool as the spenders.
This is not an exaggeration, I think pretty much all my friends stopped spending anything once 2.0 came out. My friends who would wait for sales stopped. And my whale fiends who were spending hundreds of dollars on skins and every hero pack completely stopped.
In HOTS, there weren’t really any battle passes. The “passive” boosts don’t affect gameplay and most cosmetic awards could be attained from shards.
A ‘sight to behold’ would be better if you’d actually read it through. It’s easy to tl;dr length and assume agree/disagree and want to value the one that looks to agree with what you want to say. However, like the usual ‘arguments’ a lot of it is them just talking past each other.
Drey is more experience in a particular perspective, but it’s more fixated on the specificity of that. And that’s fine, people tend to focus on a particular way of phrasing because that’s how they commonly communicate; it is jargon. The breakdown is going to be the spender, shopper, saver for their understanding instead of whale, dolphin, minnow that I was alluding to earlier (the ‘gobbledygook’)
The model same model can be explained in different terms, but some people tend to get offended by the divergence in spending habits. Drothvader, a former frequent forumer, was a ready example of a ‘whale’ to a minnow as any spending seems a big deal to those that don’t want to spend any on this game, or any really, and take the attitude to bemoan those that do. He wasn’t a ‘rich’ player, but it was simply a cost he could afford to make to get what he wanted; for those that don’t spend at all, any spending has to imply that someone has an abundance to waste instead of considering opportunistic actions. A similar comparison could be seen between Drey and Xiv.
For Drey, the ‘stupid’ appraisal for the design choices should be met in financial terms, while for Xiv, the ‘stupid’ is on the consequences of the ‘success’. The usual faults projecting at HotS failing is based on numbers, so since the game ‘failed’, it must not have had the right numbers, and one of those aspects is the ‘numbers’ evident by split currencies.
While not necessarily a one-to-one match, the whale/spender/etc breakdown can either suggest resources, but it’d be better to think of it as motivators: some people are motivated more by gain than they are by loss; others are motived by loss more than gain, and others are motivated more by the anticipation of losing without gaining.
Having different ‘rewards’ in the various currencies isn’t just about ‘buying it’ it’s the perception of “value”, so having split forms is a way to appeal to the different groups but still having the ‘same thing’. That model makes more sense if content for the game was still coming out, but even before the HGC fiasco, there wasn’t a good distribution of items to make use of the different currencies. However, for stable/profitable mobile games (typically gatcha games) it’s easier to see how the different currencies are used to create an illusion of ‘progress’ so people keep playing, or finding a particular outlet for how they ‘spend’.
Some like the discount packages, some like the monthly payment (semi-subscription) and some do buy the biggest, most expensive thing available. If people don’t follow gatcha/mobile games for a comparison, you can see similar conduct at the grocery store in how/when/where items are arranged and priced in the store.
I really appreciate this response. Just to clarify, the credentials thing wasn’t really a sticking point for me. The whole reason I asked Xivil about credentials was because they effectively called all the people working in Blizzard’s finance department stupid, which I just think is a negative thing to do, especially when you don’t have any experience in the field and don’t really understand how they’re looking at data and making decisions.
Also, I’m sure you already know this, but what I said was a very broad generalization. Decisions made by companies aren’t always going to effect every big spender the same way, every shopper the same way, and every saver the same way.
To share my own anecdote, I am a saver, but my wife is a big spender. Although it was very jarring at first, I think my marriage has really been an eye opener in helping me understand retail sales a lot better. It’s probably what helped me dig out of my own tunnel and has improved my analysis of statements.
As a consumer, I understand the differences between a battle pass and the HOTS boosts. However, I think that Blizzard’s intention for the boosts was to appeal to that middle “shopper” crowd, which is why I’ve lumped them together. I don’t always have my timelines in perfect order, but I think HOTS was one of the first games from Blizzard to introduce that pay to gain a temporary bonus (increased gold and experience) for a limited duration, so my assumption is that it was like a first pass at a battle pass system.
I apologize for my misunderstanding. I thought the term meant something a bit different, but now that I’ve looked it up I understand. That being said, whales spend the most money on a per person basis, but shoppers are generally the largest overall piece of the pie just due to a higher number of consumers falling into the category, at least in terms of the non-mobile MMOs I’ve looked at. Mobile games aren’t really my cup of tea, so it’s probably why I’m not familiar with those terms.
I’m glad you made the comparison between my lingo and your lingo so I could make that connection. For the record, it was gobbledygook to me the first time I read it, but that’s on me for not taking the time to look it up. Plus at the time I just wanted to say gobbledygook.
Edit: And look at me mixing and matching the mobile lingo with my normal business lingo!
I didn’t mean to imply that you made any claims you worked specifically for companies that are worth billions. I read all your posts as this is an interesting discussion, but you did call out the expertise of others and specifically wrote: “All of this gobbledegook leads me to believe that you have no experience in board meetings for large, successful companies.”
That is a good point, but if you’re making it, you need to have something to back that up, which you apparently you have.
Well my Grandmother felt any discussion of finance or money was “vulgar”, and while I’m not my Grandmother, complex issues regarding any personal finance, taxes, estates, well, they make me anxious. In a broader context, I find the subject of finance/economics interesting, as I can put a few degrees of distance between my personal feelings and the subject.
Perhaps I didn’t explain the shoppers category very well. Shoppers don’t look for the best deal (that’s the savers), they buy things they think are worth the money, they’re the middle ground of big spenders and savers. They’re the people who will occasionally buy a new game at full price because they haven’t gotten one in a while. The savers are the people who will wait until it goes on sale. Shoppers are the ones who will generally pay the subscription fee for extra in-game boosts in free to play games. I only have a basic understanding of the different types of spenders, and a general idea of what types of purchases they make based on my finance background. I couldn’t tell you what motivates them to make purchases.
I think this is true for a lot of mobile games, but it’s not what I’ve seen for console/PC games. I have done very little in terms of analyzing mobile games because they don’t interest much. What I do know in regards to console/PC games is that they are moving from actual game/expansion/product sales over to in-game sales really quickly. Less than 10 years ago it was like a 50/50 split, but I think as of last year it was something like 80/20 favoring in-game sales. It does get a bit hazy though because some companies are reporting battle pass type sales as subscription revenue which falls under game/expansion/product, while some are reporting battle pass type sales as in game service sales. I’m sure in future years there will be more financial laws regarding how it gets reported.
Edit: Sorry, went off on a little tangent here because this kind of stuff excites me. What I wanted to circle back around to say is that big spenders dominant a lot of mobile game sales because they have pay-to-win mechanics. These games typically have shorter life spans as well. Big MMO console/PC games usually aim to have longer runs, so the companies either severely, or completely remove any kind of pay-to-win mechanics in order to attract a more balanced player base among the spender types so they earn more revenue, but over a longer life cycle. Of course, it’s possible that may change in the future.
What you’re kind of saying here is that some big spenders aren’t big spenders, they’re shoppers. What differentiates big spenders from shoppers is that they will spend the money if they want the product, that’s what puts them in the category in the first place. This also might be why you’re thinking big spenders are the main source of income - if someone won’t spend money if they don’t have to, that would put them in the shopper category - which is the biggest group in the consumer group.
I sometimes feel like my personal background gets in the way of how I explain things. I’m not saying that boost sales are the one and done, but I do think they make up a good chunk of this particular game’s revenue. Just based on my in-game matches, I see at least 1 player with a boost every match, and it’s normally more like 2-3. That means probably around 15-20% of players are buying boosts. For a game that is viewed as dying or in maintenance mode, that’s pretty good. Furthermore, the boosts increase gameplay activity, which extends the longevity of the game, thereby extending how long the game is bringing in revenue and acting as a free form of advertising. What I’m saying is that boosts entice consumers from the largest spending group to increase their playtime, which increases revenue in the long run.
I think you’re looking at it through a tunnel. There are factors outside of financial and monetization decisions that can influence how well a game performs. If the development of the game is slow or poor quality, that can impact it. Outside competitors such as LOL or DOTA 2 also have an impact on it. Even a financial decision that loses money doesn’t mean it was a stupid decision. Sometimes other factors mean that the best decision just means losing less money.
The financial standpoint you bring to the conversation is very interesting indeed but I feel it strays away from the issue I have with Blizzard’s shards decision and does not answer why the use of shards as a way for players to get what they want without having to make a purchase was a ‘smart’ decision on their part. Spenders were going to spend anyway with or without shards, but you’ve now cut off other possible income by allowing people to go an alternative route to get the items they want and that is what I am saying was a stupid decision. Had Blizzard not used gems, the spenders will still spend, but now the shoppers and even savers are requited to put forth money to get what they want instead of just farming gold and turn them into shards.
You can go on about your own breakdown, but you fail to see why it doesn’t really matter. Blizzard can gear their sales towards big spenders, but I don’t see how cutting off pathways for extra revenue is a smart thing to do.
I’ll admit that the hots dev team wasn’t sacked solely due to financial reasons, but I’m pretty sure the extra revenue could have helped.
You simply could have disagreed with me instead of making a big deal about my credentials to say such a thing but here we are. I think you’re just taking yourself too seriously in that regard and it was unneeded to have a decent conversation.
I don’t know the rules for posting links to other websites, but there’s a great article by Forbes about Epic offering the free battle pass in Fortnite, that gives a good explanation of how making some in-game content free (or in this case purchasable with in-game gold) can increase sales. In the article, they actually pose the exact question your asking - how can making something free increase sales - and then answer it.
If you can find it, it’s a short 3-4 minute read and it’s written by someone who is much better at writing than I am, so it’ll probably make more sense.
I think I found the article you’re referring to and it makes some sense, you have to realize this game and Fortnite are vastly different. Yes they’re both free to play with in game purchases being the real bread winner, but hots lacks a battle pass system, the skins are free, and Fortnite is widely more popular. I’ll post it for reference.
I read up on hots revenue and this is the first thing I could find. Hots, Hearthstone and Destiny brought in $1.25 billion in revenue in Q2 of 2015. Assuming they made that each quarter you’re looking at about 5 billion in annual revenue. Remember that this is for 3 games together, not just one individual game and its assuming they made $1.25 billion each quarter. Idk about the reliability of the source but its the only thing I could find without searching for hours.
Fortnite on the other hand has brought in over 3 billion each year (surpassing $5 billion some years) from 2018-2021. One single game has brought in a very respectable amount of money and some years even more money than the 3 games combined in one year. That is according to this source and assuming its correct, but even if it isn’t, I don’t think the numbers are far off.
One difference here is that skins in the shop are not free in Fortnite and there’s no way to get them without purchasing V-Bucks, but skins and items in hots are purchasable with shards which do not require players to pay actual money. Another difference is that Fortnite isn’t making skins free, they’re making the battle pass free so that players could use that money to buy skins. It makes sense for Fortnite, but it doesn’t for Hots because boosts do not get you what a battle pass would. They just grant gold and xp, not skins or cosmetics. Sure, you could say that because skins are free people are more likely to buy boosts, but for what? Skins are free already if you have gold/shards so what’s the purpose of boosts in this case?
The only purpose for boosts is to grant extra gold and xp, but you can only use gold to buy heroes or convert to shards so the only real benefit of buying boosts is if you want to buy heroes you don’t have. I highly doubt people are purchasing gems to buy boosts to get gold to make shards to buy skins. They’d just buy the skins with gems, but I also doubt they’d use gems if they can use shards. Sure, the big spenders would, but big spenders aren’t the variable here since they’d purchase what they want anyway.
Now if Blizzard had a battle pass, gave it away for free one season so that savers or shoppers could taste what its like to be a big spender they might create more big spenders, but that isn’t the case because shards undermine that whole plan and there isn’t really any sense of Blizzard trying to accomplish what Epic did by making skins free because I doubt it would turn people to buying boosts because once you have your skins or cosmetics, boosts don’t really offer much. Another thing to point out is that Fortnite can afford to lose some money, but I don’t think Blizzard is in that same boat.
This is why I say that Blizzard’s decision to make cosmetic items in hots essentially free by using shards is dumb. They cut off revenue they didn’t need to for no good reason. If you still believe my claims are baseless due to lack of credentials, go ahead. Next time saying you simply disagree would suffice and then you can enlighten us with your knowledge as to why you think so.
I think you have misunderstood my entire point in this post. I honestly don’t care what your belief is regarding how making cosmetics available through in-game currency affects game sales. My point is that you are calling a group stupid about a financial decision, but you have no foundational knowledge about marketing, sales, business, or finance. Next time you want to call someone’s decision stupid, preface it by saying you have no fundamental education in the field if you don’t. You have lost a lot of respect and credibility in my eyes.
Here you go again with that bs. Dude, I will say what I want and you’re free to disagree just like anyone else. I have explained why I believe their decision was stupid and why I disagree with your counter claims. You’re getting caught up on whether I have credentials or not and that honestly doesn’t even matter in this case.
This whole thread you’ve been trying to invalidate what I say simply because you believe if I don’t have credentials then what I say is moot. That’s the wrong way to have a discussion. You’re free to disagree with me, but hounding me about my credentials is not the way to have a proper conversation.
You disrespected those employees by claiming their decision was stupid. Having no experience makes you an even bigger jerk. You deserve as much respect as the management team who disrespected all those employees.
It’s unfortunate how this discussion turned out. I’ve been holding back my own take because I personally hate going into details on marketing.
The general majority do blame the direction hots took in its monetizing but here’s what I think. I think that the broad use of intense microtransactions in mobas is actually something we shouldn’t really consider as being the norm. I think it needs a lot of work.
I also think that the decisions taken to give people who don’t want to pay options for getting what they want the free way is a step in the right direction.
Think about it. Lets say hots followed the same monetization strategy as dota/LoL. The people who want to level up/get cosmetics quickly are going to give their money either way. The ones forced into paying to get what they want, with no F2P option ahead of them, are going to get frustrated, and that frustration is going to build up into hating the game and eventually leaving. I’ve had this experience on genshin impact, customers feel like they’re getting backed up into a corner lots of times. And for games that prioritize the long-term, this leads to a lot of playerbase bleeding. We actually see it happen when people from other mobas migrate to hots because of this frustration. I am aware that hots still failed in retaining its old customers, but keep in mind this was completely out of neglect in other areas: advertisement, forcing the e-sports scene when the game was too young still, the many fiascos that the CEO had lots to do with. I think that the monetization strategy wasn’t playing a big part in the game’s descent, the opposite in fact, it was helping retain as many players as it can. Heck if it was as cutthroat as other similar games in its monetizations, I’d have left it in the first two months. This is a good strategy on paper for player retention because it doesn’t make players feel obligated to pay, they pay when they want to, and the time spent farming for what they want is a win-win for both company and player. It’s just such a shame it ended this way.