Blizzard Business Operations Notes
Introduction
- Mrs. Howard is the Senior Director of Business Operations for Blizzard.
- She previously worked at Time Warner, Time Warner Cable, and McKinsey and Company.
- She has a Ph.D. in biochemistry.
About Mrs. Howard
- Her son, Will Hower, is a senior at Cream.
- She has two dogs, Ripley and Yuki, who sometimes appear during her work.
Education and Career
- Grew up in Los Angeles and attended Harvard Westlake.
- Went to the University of Toronto and UCSD for college.
- Worked for McKinsey, AOL Time Warner/Time Warner/Time Warner Cable, and Blizzard.
- Has been at Blizzard for five years and will receive a sword as a five-year anniversary gift.
Job Description: Senior Director of Business Operations for World of Warcraft
- Understands players: why they start, stay, and leave the game.
- Ensures sound value proposition and fair pricing.
- Advocates for improvements in the game: gameplay, user acquisition flow.
- Ensures consistency across all channels (eSports, apparel, website, blogs, Twitter).
What She Doesn't Do
- Key game development: game design, art, programming, production. These are crucial for product delivery.
Understanding Player Attrition
- Exit surveys: administered when a player cancels their subscription (reasons: lack of time/money, friends leaving, deployment).
- Online surveys to gauge player preferences.
- Data analysis: tracking player activity to identify critical gaps and areas for game improvement.
Activision Blizzard King (ABK) as a Business
- Parent company of Activision, Blizzard, and King.
- Overview of Activision's games (Call of Duty, Tony Hawk's Pro Skater).
- Overview of Blizzard's games (World of Warcraft, Overwatch).
- Overview of King's game (Candy Crush).
- Activision: primarily a console company.
- Blizzard: primarily a PC-based company.
- King: primarily a mobile company.
ABK as an Online Entertainment Conglomerate
- Operational economies of scale.
- Shared infrastructure (HR, production resources).
- Leveraged partner relationships.
- Shared best practices.
- Distinct but related customer bases.
- Market cap of 62,000,000,000, PE ratio of 34.
- Listed on Nasdaq and part of the S&P 500.
World of Warcraft (WoW) as a Business
- World's most popular MMORPG (massively multiplayer online role-playing game).
- Debuted in February 2004.
- Two live versions: World of Warcraft Classic and the Burning Crusade.
- Eighth expansion: Shadowlands.
- Global presence with 24/7 operations.
- Since launch, 140,000,000 people have played the game.
WoW Revenue Streams
- Box sales (collector's editions): 40 to $80 every two years.
- Subscription: 13 to $15 per month.
- Microtransactions: name changes, server transfers, cosmetics (mounts, pets, skins).
- Subscription model provides dependable revenue stream.
- High fixed cost business model translates to profitability at scale.
Teamwork at Blizzard
- Emphasized the importance of teamwork.
- Picture of the World of Warcraft team with their dogs.
- Orc statue on Blizzard campus.
Case Study 1: Global Operations
- Translated from English into 10 other languages.
- Five distinct operational regions: North/Latin/South America/Australia, Europe, Korea/Taiwan, China.
- Multiple data centers around the world.
- 24/7 operations with three global peaks each day.
- Pandemic impact: increased concurrency during stay-at-home orders.
Benefits of Being a Global Business
- Connected players around the globe.
- Reinforces value proposition of the game (open world, unlimited possibilities).
- Leverages high fixed cost business model.
Operational Challenges
- Localization (translation) of 3,500 quests in the latest expansion.
- Different alphabet types and language reading directions impact user interface design.
- No downtime for maintenance requires facilities and operations around the globe.
Regional Variations in the Game
- Rated T for Teen to allow for broader marketing opportunities.
- Germany: Alcohol must be optional within the game.
- Russia: Mentions of homosexuality are prohibited; translation altered to imply brotherly love instead of romantic love.
- Australia: Characters can’t smoke.
- China: Significant visual restrictions (skulls, bones, blood, internal organs).
- China: Skeletons are replaced by straw people and meat is replaced by bread.
- Global Release Date: Officially August 14, but internally considered August 13 to coordinate global launch time.
China-Specific Visual Restrictions
- Skulls and bones are removed or turned into stone.
- Blood is turned to green (and is becoming more restricted).
- Characters must have all their skin covered.
- Skeletons are replaced by straw people, and meat/skulls are replaced by bread.
- Example: The Butcher boss is replaced by the Bread Baker boss in China.
- Encouraging longer-term subscriptions.
- Two tactics: reduce price for longer-term plans or increase value.
- Standard model: reduce price for longer commitments.
- New promotion: six-month offering includes a cosmetic skin (first skin ever sold directly).
- Bundled price offers about a 25% discount.
- Factors to consider:
- New players moving to longer plans.
- Revenue reduction due to lower monthly price (12.99 vs. 14.99).
- Players who stay due to the bundled gift.
- Cannibalization of skin sales (20 lost per skin).
- Players who auto-renew for another six months.
- Ultimately, data informs the decision, but gut feelings can also play a role.
- Three ways to reach Mrs. Howard: email, LinkedIn, Twitter.
- Encouragement to check out the new player adventure or the career site.