Blizzard's AGDC Keynote: We Lose Money on BlizzCon

Blizzard's AGDC Keynote: We Lose Money on BlizzCon

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During their keynote at GDC Austin, Blizzard's J. Allen Brack and Frank Pearce talked about long-canceled sci-fi RPG Nomad, and revealed that despite its popularity and pricey tickets, BlizzCon is written off as a financial loss.

You may recall that tickets to this year's BlizzCon sold out rather quickly - 20,000 tickets gone in eight minutes at the very most - and at a pricey $125 per pop, simple math tells us that Blizzard raked in $2.5 million on tickets alone. Factor in the merchandising, and it's hard to imagine that BlizzCon is anything but a financial killing for the Irvine-based PC developer.

Hard to imagine, perhaps, but it's actually ... true? According to Joystiq, Blizzard's Frank Pearce revealed during his joint AGDC keynote with colleague J. Allen Brack that BlizzCon is operated "at a substantial loss for Blizzard." It's not all that hard to see why, either - beyond renting out the enormous Anaheim Convention Center, stages and sets need to be built, massive banks of computers need to be set up and run (and electricity doesn't come free), staff needs to be paid, et cetera.

So what do they get out of it? Well, other than helping to assure the loyalty of fans for the rest of their natural lives, it's an incredible PR/marketing blitz for the company. It's quite handy for Blizzard, to be sure - two days of straight news about their games unimpeded by the rabble that attends E3? Be still, their beating hearts.

The two briefly talked about - and showed some concept art of - Nomad, a game that was mentioned at last year's DICE as part of a long list of games that Blizzard had started work on and scrapped over the years for not living up to standards. Nomad was supposed to be a "squad-based sci-fi RPG" during development a decade ago, and although Blizzard had put a great deal of effort into the title, there came a moment when the developers asked themselves, "Is this really the game we want to be working on right now?"

The answer, as it turned out, was "No." Blizzard scrapped Nomad, and went on to kick work on a little game called WoW into high gear. In retrospect, that may have been the better idea. It's unlikely that this is related to the current "unannounced MMORPG" in development - it would be odd to see that game unveiled with so little fanfare - but it's an interesting look at what might have been.

Brack and Pearce mentioned quite a few numbers in their keynote, but here are three more bits of trivia: The Blizzard QA team has currently tracked 179,484 bugs in the game since its inception, there are 7,650 quests in the current state of WoW, and roughly half of the data in each new content patch is audio footage. Go figure.

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well since Bobby took over and the merger i'm going to guess that Blizzcon will no longer be around cause it's a loss and Bobby's all about making money and not losing any

Looks like it's a big thumps-down to all the people who thought that 2 or more Blizzcons per year would be reasonable. Holding the show once a year for the sake of future profits is fine, but they would stand to gain nothing from a second show 6 months later if there's no profit to be made.

That art.

I must know what game that is from and that game MUST be made. Because that is a motherfucking Brontosaurus with a cannon on it's back.

cleverlymadeup:
well since Bobby took over and the merger i'm going to guess that Blizzcon will no longer be around cause it's a loss and Bobby's all about making money and not losing any

It loses them money in the short-run, but I'm positive there's plenty to be gained in the long-run, like Funk said, in furthering establishing the company as a brand, cementing the community of fans and customers and the huge marketing push. People come out of BlizzCon loving Blizzard and talking about the event for well, until the next one. So aside from the lovey-dovey stuff about it creating all this goodwill toward the company and even within it (Blizz folks love it), I'd say there's some financial gain that comes out of it in the big picture.

And no, Bobby Kotick's not going to change that.

TsunamiWombat:
That art.

I must know what game that is from and that game MUST be made. Because that is a motherfucking Brontosaurus with a cannon on it's back.

It looks like it is from the game that was cancelled. Sad times.

They do not make a material profit, this is true. They do it because it is advertising and keeps thier customers interested. The "loss" is probably written off as advertising expense, or meals and entertainment expense (which is somewhat deductable, but I don't think their main motivation is "tax break"). In their books, it doesn't count as a loss, and it's probably cheaper than their other means of advertising and customer retention.

Blizzard LOSES money on BlizzCon? I find it kinda...

...kinda...

...kinda...

...KINDA HARD TO BELIEVE.

I have problems with believing anything authority says.

blizcon is a advertising orgy and im sure that they have ran the estimated numbers on how much business it brings in and theoretically it isnt a loss its only one on the books

cleverlymadeup:
well since Bobby took over and the merger i'm going to guess that Blizzcon will no longer be around cause it's a loss and Bobby's all about making money and not losing any

Not only is what Keane Ng said completely true, I also doubt that Blizzard employees would ever accept something like that.

While ticket sales may not cover blizzcon costs, that's not the whole picture. It's definitely in Blizzard's favor to maintain the zealous following that's willing to pay several times the cost of a game to come hear about new games.

This is how it should be. Developers (and publishers alike) should be willing (nay, eager) to endure loses to ensure the loyalty of their fans.

 

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