Thanks for sharing your thoughts. I understand why you want to be secretive about your reasoning, but given the way the GLS stocks work and the nature of the video game industry, the stock prices you are expecting may never happen if you don't argue your view.
We probably will never get hard data on unit sales for this title. So the only way you are going to be able to get this to 12-14 million or even higher is to provide information the market believes to warrant the price.
To be honest, I want continue to build up my position, so I'd rather not elaborate on my opinion. I only mentioned it because I knew someone would ask as soon as it showed up in my profile.
Basically I believe both your estimates for current sales are far too low. The numbers that apujanata has chosen for his math are arbitrary and very low in my opinion. A few months after Burning Crusade was released in '07 more than 70% of subscribers in the West had already upgraded. What do you think the percentage is right now?
I also think you are both discounting future growth far too much. I believe that even though WoW is about 4 years old now, it isn't even half way through it's life cycle. You say WoW killers are on the horizon, Diablo, Starcraft, etc, and I say look at the last dominant MMORPG, Everquest. The most recent expansion for that came out last year in 2008, 9 years after the original. That's after WoW, Everquest II, and thousands of other games have come to the market. I think it's clear that WoW will blow past EQ in almost all respects and maybe could be on the market for at least a decade, possibly even more.
I'd rather not go into any more detail because I want to build my position, frankly I've already said too much. If you don't agree with me and you still believe your arguments are sound then feel free to sell more.
@zukaus, Like deftangel said, which part of my analysis did you disagree with ? and why ?
I noticed that this stock show up in your profile, and you were long on it. I am pretty sure your profile didn't show that you are long on it the last time I checked your profile around end of Dec 08.
I would really like to hear opinion from someone who is long on this one, especially if that someone is rank 1 player :D.
I think it's a difficult one as there are a lot more variables to consider, churn rates, business models, WoW's longetivity etc.
But on what basis are we predicting that 12.5m out of all the people to have played WoW at least once (whatever that figure is and ignoring the doubt over Asian business models for the minute) will 'buy' a second expansion pack aimed at high level players?
@deftangel, Let's see : 15 Million WoW player : Minimum : 15 Million x 50% (for burning crusade) x 60% (for WoLK) = 4.5 Million Maximum : 15 Million x 75% (for Burning crusade) x 80% (for WoLK) = 9 Million I use higher % for WoLK since I assumed that IF a player are willing to buy BC, the first expansion, he is more inclined to buy the 2nd expansion.
If there are 20 Million WoW player (very fabulous #, personally I don't it can reach here, but since WoW is the world breaking MMO, anything can happen, IMO) : Min is 6 Million, while Max is 12 Million.
Therefore, I have set up some short order for prices above 12 Million, since that price is the one with "almost zero possibility of losing".
Just to clarify my position. My understanding is that gamers in China have to pay to set up an account for The9. They then buy time to play games via The9's network for games they have "activated".
It's the activation bit that is the most ambiguous. It could be either way.
Remember, the stock in question here is sales of the expansion pack, not the game itself. I still think the stock needs to come down regardless because even with sufficiently large numbers of people who will ever play WoW (15m, 20m whatever) I think you're asking a lot to have 12m of that number play the game long enough and hardcore enough to make it worth their while buying TWO expansions aimed at high level players.
It might be that we never properly resolve the China issue until we speak to a Chinese player but I think there's certainly sufficient doubt for me to price that into the stock.
@KultofCows, Now, the question is : Would you consider China sales of Wow as sales, or not sales, IF China gamer doesn't have to spent money before they can play WoW in China (they only have to spent money for the monthly subscription to play the game) ? It is not sales in the traditional sense, in that people spent money to have it. If zero cost game are also counted it, it will also be valid for bundled game, such as Wii Sports. Wii play have $10 cost associated with it, since Wii-remote itself only cost $40, while Wii Play (including remote) cost $50.
All GLS stocks forecast the Global Lifetime Sales of a game--meaning the total unit sales of the game's lifetime. A forecast of the subscriber-base "in lifetime" should be equal to the GLS if each subscriber is required to buy the game.
A forecast of the active subscriber-base would have to be associated with a particular point in time, as the subscriber-base goes up and down on a day to day basis. It would not be possible to have a GLS stock targeting "active subscribers." GLS stocks do not represent the present state of sales/subscribers, but rather the ultimate future state in which all sales have been made.
@Mushashi, IF MMO GLS=subscriber base, especially if it is active subscriber, then the amount will always go up and down.
OTOH, if MMO GLS = sales, it will only go up, will never go down. What will go up and down are simEx prices, since simEx!=sales, in some stocks (see those that have lots of tradings, since they haven't found equilibrium yet).
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Thanks for sharing your thoughts. I understand why you want to be secretive about your reasoning, but given the way the GLS stocks work and the nature of the video game industry, the stock prices you are expecting may never happen if you don't argue your view.
We probably will never get hard data on unit sales for this title. So the only way you are going to be able to get this to 12-14 million or even higher is to provide information the market believes to warrant the price.