This is my opinion on what happens when video games go into publicly traded market, and why it typically results in a worse product. This is also my reflection on the resulting long term impact’s to Blizzards products, what I’m expecting going forward, and why I think un-subbing in protest isn’t the best idea. Warning This isn’t a short post and requires reading.
Two key things to first iron out are who the publicly traded and privately traded company is beholden to/controlled by:
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Privately traded companies are beholden to themselves and the user base - the shares are owned through a small set of functionally selected persons. They report to themselves and functionally have more control over what company profits get used for without having to be concerned about being fired/voted out because they are functionally the equivalent of the board.
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Publicly traded companies are beholden to their external share holders and users - profit models and decisions are driven by the board that’s elected by shareholders to represent their interests (dividends & share prices).
I’m going to start on publicly traded companies because it’s what Activision Blizzard is. Why do people invest in Public companies? For long term growth of their money, they receive a portion of the company profits through dividends and expected share prices to go up over time. Share prices go up with company growth, this happens through increasing profits/revenue or gaining/improving assets (in this case typically Intellectual Property like WoW). This is typically something that achieved through improving company efficiency, because they can deliver dividends to investors while maintaining profits for future investments, so it can mean earning less total money as long as spending goes down by more. It can also look like mergers and buyouts because you purchase a developed and working asset, this will involve holding money (not spending it on current products) until they can secure a big enough loan to make a purchase.
So what does this do to products?
In one line - It pushes the company to deliver the minimum acceptable product.
This is because it minimizes spending. In other words “What’s the least amount of money we can spend developing the product now while still producing the most product and reaching the most people”.
Where are the users in this equation?
We are the people who buy the product and use it. They have to deliver a product that we will buy, so they should be investing the required capital to deliver what’s in our interest right?
Well… there’s the issue.
In my opinion, they don’t do a great job. This is because they are delivering what they earn to people who are not necessarily the users. So in the specific case of video games, they typically will cut spending and investment in the game as much as they possibly can to maximize profit and the result seems to be them (intentionally/unintentionally) relying on the emotional attachment and investment in said video game title for the product sales.
So what non-essentials do we see getting cut?
- Can we cut back on QC and use the players to find the bugs?
- Do we need to finish updating classes (cough shadow priests/shaman cough) or can we push them out and finish them for 8.1?
- Do we need to consider doing anything to improve or innovate on WQ content or is it sufficient as is?
- Should we spend more time evaluating whether Azerite traits are interesting enough given beta feedback, or do we need to rush the product to meet our quarterly earnings goal?
These are all things that are irritating, but not typically deal breakers. In terms of WoW, we all complain but the subscriber falloff doesn’t really break any new ground. I see it as an objectively worse product that would be improved if we had these things, but its still sufficient for people to play and subscribe. If you wanted to get nefarious about it, it also gives players a reason to stay subbed in the hopes of that content becoming better in the next patch. The problem here is that we want a great experience, but the people the company actually reports to doesn’t care, they instead care about their financial investment and the result is delivering a product without the mentioned features above can improve that.
Is it intentional on Blizzards part?
Likely not, they are working within the bounds of the finances they get given from from the parent company. Budget approval comes from the board (that reports to the shareholders) which will allocate money to the areas that get the highest returns (bye bye HoTS, hello Immortals). Blizzard is still responsible for what they do with that money but if they make a mistake such as Azerite, they likely don’t have the budget necessary to make the correction. So we get frustrated and start roasting Blizzard for questionable decisions and get frustrated when they can’t make a correction. It’s easy to direct frustration at one specific thing (IE Blizzard, Ion, etc…), but honestly it’s as much the financial structure of a privately traded company being unforgiving about a design decision that turns out to be a mistake. If you didn’t budget for it, you’re SoL because the parent company isn’t going to give you the funds you need to fix/change it.
Can we do anything to make it better?
Lots of people love to say unsub if you don’t like it, but there is a catch. If the game bleeds players it becomes less and less appealing to the board for investing which will result in more budget cuts, so the idea of not subscribing or playing the game doesn’t work in the long run. But, conversely if everyone is jumping on board it likely wouldn’t fix all the minor stuff that I think devalues a product (quality control for example), but in saying that it’s possible that they would be able to take more risks when it comes to innovation with things like class design or talents. It might be fun to put Ion on a stick, and you may disagree with design decisions, but you can honestly believe it when he says he wants us to keep playing and having fun because it indirectly gives the WoW team the finances needed to keep and do their job and develop the game. We still need to keep screaming asking for changes and telling them what we like and what we dont so they can get it right but don’t fall into the mantra of if I unsub that will team them if you have any plans on returning, you’ll likely make the issue worse. In summary, more players increases the games revenue and can result in more investment in the WoW IP but it will never fix the underlying problem of the philosophy and structure of a publicly traded company.
So then what about Privately Traded Companies?
If we assume they’re properly managed? The people who purchase the product are who the shareholders report to, they will have a much deeper understanding of the target audience and are more likely to know how much money needs to be invested into QC hours, class development hours, and hire the staff needed to deliver what we as a user want into the game. They are also more likely to be flexible in approving additional budget if a mistake is made. This are all significant pros and its why Blizzard before becoming Activision Blizzard was held in such high regard as a company.
Is the private model model perfect?
No. The share holders can also give themselves disgusting bonuses and inadequately plan for when revenue eventually drops. If you have a cyclic business like an MMO with the revenue boom at the start of the expansion and revenue bust at the end, you need foresight to balance your books or sufficiently diversify your portfolio to generate other revenue during the lows. When you don’t, you can run the risk of bankruptcy or a wave of layoffs, when that happens you’ll see them turn public or get bought out because they need a large investment to bail them out but still have good products. Blizzard may have been bad at it, (most devs reflect on excess spending and fiscal mismanagement when things take off) and it may be why they merged with a large parent company and decided to share financials. But regardless of these, with the right people a private company will deliver a way better product.
Thanks for reading.