Blizzard boss Mike Morhaime just said that World of Warcraft’s subs base is static at 11.5m users, at the same level it’s been since late 2008. Yep: that means it’s not going up.
Blizzard announced the MMO had hit 11.5m users in late December 2008.
Morhaime noted that the Chinese market, which makes up some 50 pc of the game’s userbase, still doesn’t have access to Wrath of the King.
NetEase has suspended registration of new accounts for World of Warcraft in China.Sign-ups won’t be accepted from today. NetEase is now applying for a licence to run The Burning Crusade in the country. The cancellation of sign-ups comes after it was reported in January that the Chinese authorities were preparing to rule against NetEase for illegally operating WoW in the country. Roughly half of WoW’s 11-12 million users are Chinese.
According to a brief item in JLC Pacific Epoch, China's General Administration of Press and Publications (GAPP) and the Ministry of Culture have come to an agreement about whether NetEase has been illegally operating its license for the MMORPG World of Warcraft. According to "an unnamed insider." the two sides apparently have agreed that regulations were broken, as the story says that a "punishment" will be announced in mid-January.
The Chinese government created this situation by effectively allowing the GAPP to become a virtual protection racket for the domestic game operators. They knew what they were doing then and I can imagine the GAPP would argue they are only doing what the Government wanted in "protecting Chinese culture". Whether the Ministry of Culture have had a change of heart or are just paying lip service is hard to say. They could certainly slap down the GAPP if they wanted but despite some public bickering, things continue as they are.
WoW's rough ride in the crucial Chinese market continues, the GAPP has returned new operator NetEase's application to run the game and ordered it to stop taking money and account registrations. However, Mobinode suggests that the Chinese government itself doesn't agree with the regulator. reporting that the suspension was "not appropriate". One year on from its release, second expansion Wrath of the Lich King has yet to see the light of day in China due to concerns over its content.
I backed out of shorting this stock about a month ago, I've forced it as low as it can go (1900 DKP) but someone with way too much money keeps buying it up to 2100 again. Now I just keep a modest sum short on this stock.
Its hard to see what this person's end game is, since they will lose money unless someone else starts buying.
I was shorting it before the Govt. were throwing more regulation at MMO operators because in China it's not clear what is counted as a "sale". With the first expansion, it was essentially rolled into the game free of charge for existing subscribers.
If the same were to happen again, then in my eyes that would mean only new subscribers should count as "purchasing" this expansion pack.
This isn't an insignificant number as the Chinese gaming market is of course still experiencing massive growth. I don't think it's enough to get it near 20m, however. The last we heard was the post launch figure of 3.2m or so. It must be way, way above that now but at least 40% of WoW subscribers are in China. Not only are there question marks about whether those 40% would even count as sales but at least a small amount of uncertainty regarding whether it'll see the light of day at all.
If I had told Zukaus last year that WoW would be offline for a significant period of time he'd have told me I was talking rubbish.
In the real world, an increase in uncertainty, even if it was small would affect the price; i.e. NetEase's stock price dropping 5% the other day. Whatever you think about this stock, you have to concede there is more uncertainty around it than there was 3,6,12 months ago. Yet price isn't effected at all.
The foreign MMO operators are effectively a cartel. It's a very difficult market for western operators to be involved with.
If I was Blizzard I would question whether throwing money at this problem offers return on investment in terms of a) retaining existing subs and b) attracting new ones is worth it compared to making sure they don't have the same problem with StarCraft 2 & Battle.net
Still, all of my short margin is on this stock, I can do no more.
@zeromous, Well, I don't have think I can afford to short this stock, since : - there are better opportunities elsewhere, future and GLS - limited DKP (I know I am #3, but #1 is 4.5 times my networth, and probably have lots of spare DKP) - Government based investment is risky, since Government can easily change their mind (although I don't think China government will change their mind, but the possibility exist).
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