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John Miller
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Studied international affairs at the George Washington University with a focus in economics. Experience as a senior manager for a large retail chain. Managed multiple locations with sales in the low seven digits.
  • World Of Warcraft Numbers To Decline Rapidly Again 5 comments
    May 9, 2012 8:27 AM | about stocks: ATVI

    Last quarter we saw a stabilization of active subscribers in Activision's (NASDAQ:ATVI) World of Warcraft game. While numbers had been quickly falling all of 2011, we correctly predicted a small loss for the quarter ending in December. Using the same methodology, which primarily looks at census data from a third party website provided by commentor bdy and looking at new content release (which drives participation), we are predicting a loss in subscribers at Activision's flagship in excess of 500,000 subscribers.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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  • OneCasualObserver
    , contributor
    Comments (49) | Send Message
     
    Hmmm ;-)

     

    Activity levels will go down at the end of expansion, but the Annual Pass accounts for over approximately 1/3 of current NA/EU subscribers, if not more. These people have to keep paying even if they aren't playing, and even if they choose to spend their time with Diablo III. It will harder to gauge subscription levels based on relative activity going forward (a practice I've been doing for years now).

     

    It was a brilliant move, but one with trade-offs. 3rd quarter should prove to be interesting, when the Annual Pass expires for many.
    9 May 2012, 05:30 PM Reply Like
  • John Miller
    , contributor
    Comments (67) | Send Message
     
    Author’s reply » Big miss on our part and I like your logic as partial explanation. But still find the 10.2 number hard to swallow. Especially since they are putting out that the number as MAU and not subs.

     

    Do you think those who are going to lapse have lapsed? We thought there would be a large lapse following the devouring of the final Cataclysm content. Especially in the East.

     

    For the last two quarters I have made my call public on the number. Out of personal pride interest what were you thinking before the conference call?
    9 May 2012, 09:06 PM Reply Like
  • OneCasualObserver
    , contributor
    Comments (49) | Send Message
     
    I was predicting a stabilization and even a slight increase in NA/EU subs based on user activity (29 April)

     

    http://bit.ly/KMZ4Vp

     

    I had no clue about China, but I didn't see any news indicating issues on NTES's part. I wouldn't have been surprised if your hypothesis had proven itself out.

     

    Regardless, Asian income fell by over 20% QoQ, but I haven't had time to review the numbers in depth yet.
    9 May 2012, 10:05 PM Reply Like
  • OneCasualObserver
    , contributor
    Comments (49) | Send Message
     
    I just read over your NTES article published on 5 March, 2012. I missed it for some reason.

     

    I can see now why you made the prediction you did. The fact that ATVI put out the number as MAU's is indeed significant, in hindsight. Perhaps free-to-play and promotional non-paying subscribers made up for declines in paying or licensee subs and gave ATVI the room they needed to claim stabilization and reassure the markets. Who knows?
    16 May 2012, 10:20 PM Reply Like
  • Seeking Beta To Your Alpha
    , contributor
    Comments (450) | Send Message
     
    I think the annual pass was a great way for ATVI to shore up its stock price short term to appease those investors who are overly obsessed with subscription revenue.

     

    I think you'll see a much more diversified revenue stream from ATVI moving forward. In 5 years, I suspect subscription revenue will still be a part of ATVI's income generation model, but I think the company is going to be looking to generate revenue a lot of different ways.

     

    Blockbuster movies don't just make money at the box-office and I suspect that ATVI is looking at leveraging the strength of their titles to generate multiple revenue streams as well.

     

    Also, based on the last two quarterly earnings calls, I think that the company is properly trying to expand the "e-sports" market. One of the appeals that made the "World Poker Tournament" huge was the ability for the everyday individual to have a chance at fame and success. If ATVI is successful in expanding the "e-sports" market in places other than just Korea, then the sky is the limit.

     

    Ok - so I know it sounds crazy to think of a world where folks might pay as much attention to CoD matches between clans in different cities, as they do to Sunday NFL football games...but could you imagine if ATVI managed to pull it off?
    10 May 2012, 03:43 PM Reply Like
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