Virtual goods, as Digital Chocolate's Trip Hawkins would tell you, are big business and it's an area of the games industry that's only going to get bigger. While many companies are turning to the free-to-play, micro-transactions model instead of charging a subscription to play online, Blizzard is in the enviable position of being able to leverage the best of both worlds. The company's newest in-game item for World of Warcraft, the "Celestial Mount," has been generating millions of dollars from the start.
The item is the first released in the game that can actually be used, since your character can ride it, but Blizzard priced the item at an astounding $25. While many players were up in arms about the price point, plenty of others gave in to the urge to purchase it. The unofficial WoW.com blog claims that the purchase queue for the Celestial Mount hit at least 80,000, and some users have been reporting download wait times of seven hours. The demand is astounding. Doing some quick math, ITworld estimates that this translates into about $2.5 million in revenue per hour for Blizzard.
It'll be interesting to see how long the market will support high-priced items like this. If consumers keep paying for it, then Activision Blizzard and other publishers will continue to put out items that cost them very little and bring back massive ROI.
3 Comments
April 19, 2010
What's with all the weird spammy comments all of your articles get? Are you guys looking into it?
April 20, 2010
As someone who caved in and bought the mount, I have to say that first off, there were queues longer than 80,000. I was personally somewhere above 105,000 in queue. Secondly, the webpage-quoted wait times were actually much shorter than the times posted. My 7 hour wait time was actually more like 1.5 hours.
Part of the reason it does so well is probably that in WoW, there are a lot of people who collect the pets and mounts specifically to earn achievements (which rack up points that don't do anything really except let you compete with friends) or just for the pure pleasure of having something someone else doesn't (WoW doesn't exactly promote character individuality, so this is sometimes something that people go for). I've seen people have "pet-wars" or "mount-wars" going through their list of pets and bringing out every single one they own to see who has the most or most unusual (usually during raiding downtime).
The mount had additional in-game plusses too. You didn't have to buy a mount for every character with the in-game currency. When you learn to ride, you use the celestial steed. When you learn to go faster, it automatically goes faster. When you learn to fly, it automatically flies. A big convenience sometimes (you normally have to purchase a new mount in-game each time you learn a new traveling speed or flight).
Something I wasn't quite clear on too...the online store seemed to have a "limited" stock of them. There was a percentage bar that went down by a few percentiles while I was waiting. If anyone knows what that was all about, I'd be curious to know.
April 20, 2010
I'm a customer who didn't buy it. You know, historically the MMORPG's I've played each had an annual paid expansion that cost about $50 at retail, everyone bought it, and it was a significant fraction of the revenue stream supporting the game. Of that $50 at retail, maybe half ($25) made it back to the developer. So if you look at the millions spent on that expansion pack, there was value there for me as a customer.
The artwork on that $25 mount -- and art is always in the eye of the beholder so this is an opinion -- is substandard compared to most Blizzard / World of Warcraft material. So those millions are going somewhere and it wasn't into the tiny, cheesy thing they're selling. I'd better hear that this was needed to subsidize getting Cataclysm right, and not that the Activision Blizzard CFO saw a bad quarter coming and soaked the customers to make up the shortfall. Go back to that well too many times and you'll kill the goose laying all those golden eggs.
IMO? it's a $1 microtransaction at most, and I wouldn't even pay that for it.