No calm in the Blizzard

You know, it's far surpassed our expectations, to be candid. We... We had high hopes, I guess. However, the numbers that we've seen, especially in Europe, have been really really staggering. When we decided we were going to open an office in Europe specifically dedicated to Blizzard and World of Warcraft, there were points of nervousness about that. Obviously, when we looked at the market at the time, MMOs had not really taken over. We really believed in the market - the European market has been incredibly strong for us historically with our PC boxed products, and we really believed that the gamers there were ready. We believed that gamers there would respond well if a good game came to them that really tied well with what their preferences and their game experience preferences were, and if we properly supported them in Europe. So, in doing that, yeah we were nervous, but I think so far the results have really shown us that it was the right decision. It's been a great success.

Well, we have in excess of a million and a half paying subscribers - it's been going really, really well. We're basically in three territories at this point - we're in North America, we're in Europe and we're in Korea. We're in an open beta phase in China [Editor's Note: The commercial release took place in China earlier this month] and the Chinese open beta phase is going gangbusters. We've basically been in open beta for a couple of weeks and we have concurrency of over half a million, and six figure queues. So there's a staggering number of players in China that are wanting to play, that are enjoying it quite a bit.

Each of the other markets have been going really well for us. We're number one in North America, we're number one in Europe, and in Korea we kind of move back and forth between number two and three. We expect for that to continue to go up - that's probably the most competitive market in the world for these types of games. In China, from a concurrency perspective in open beta, we've broken all records in Chinese history for these types of games, so we're quite excited.

I think the last time we spoke, we talked about a theme of being concerned and somewhat fearful of what we were facing... I think that continues, because China is going to be quite huge for us, and I think we've got Taiwan following soon after. Taiwan is a major market for this type of product as well. So there's a lot to do, not only for future stuff but also for our current markets. We have to continue to maintain them and focus on them, and give them the level of attention that they deserve, and not lose sight of that while we're trying to bring on new markets. There's a lot to do, we're stretched very thin; however, it's exciting! We're having fun, and it's one of those things where I look at it, and any time I get frustrated or down because of the amount of stuff that we're doing, I tell myself that it's a high-class problem, and push through! [laughs]

Yeah, it really is. It really is.

Well, I think with North America, because that was our first market, we expected that there were going to be some challenges - and there really were. I mean, in a matter of a week, maybe even less, we hit our year one numbers for North America, that we had planned for. I shouldn't say 'planned for' from the perspective that we didn't have additional capacity, but rather that as part of any business, you build your P&Ls [Profit and Loss - Ed], you build your plans, you make your hardware purchases and you do all the different things necessary to be ready. Our first weekend numbers were so gigantic - and our first week and our first month, for that matter - that it... I don't want to say that it took us by surprise, but in some respects it really did. We expected for large numbers of people, just not that fast. We were able to respond and provide additional hardware very quickly, because we had another full datacentre ready to light, so we were able to do that and to get the capacity up.

We were also very careful about the amount of software we put in the channel, not only in North America but also in Europe. As you mentioned, there have been some out of stock challenges. Those out of stock challenges are based on the fact that we're only putting a certain amount of product in the channel, the idea being that we don't ever put too much into the channel where we don't have enough capacity to support that. The worst thing we could do is to go and ask for customers to pay us some of their hard earned money, and then for them not to be able to connect.

There have been times where there have been some queues here and there, and that's been because concurrency was, on a percentage basis, higher than is normal. In doing the whole planning process, we had to look at historical data from other companies. We looked at what their typical concurrency was as a percentage of their overall subscribership, we used all those things - we kind of padded those a bit, and we also looked at historical sales trends... We did all the different things that intelligent businesspeople would do to effectively plan for such a launch. The challenge is that the demand was so much greater than any other company had experienced, not to mention beyond the padding that we put on top of that.

We said, okay, let's for the sake of planning just assume that from a numbers perspective, it's equal to the biggest thing out there. Then let's add to it, and say let's be ready for more. Well, when you do that, and you still have demand that outpaces that... [laughs] That's challenging! And so we've had to work very hard to deal with that. It's a high-class problem, but a problem nonetheless, and it's required a lot of sleepless nights by all of us, working around the clock to make sure that we properly support the customers.

We've done it pretty well in some respects, and in other respects we've gotten our bumps and bruises - but I think that many of the challenges that we've faced are things that have been solved, or are in the process of being solved, or we now know how to solve them. I think the stability from the server perspective is much better in each of the territories - there were a couple of server stability problems we were having with some of the code, which was a problem we were having a hard time finding, but we've identified that and as a result, stability is much better. It's such a complex system, and there are so many people that are trying to play, that it's very difficult to effectively deal with all of those things, all the while trying to give people a positive experience while we're trying to fix those things.

I think we've done a relatively good job. We want to do better than we have; we have plans and aspirations and goals to be much better than we already are. I think that we've done a pretty decent job, but I would also say that Blizzard has the desire to be the best in class in the service that we provide and the overall experience. I think we've created a great game, one that personally I like playing better than the other MMORPGs out there, but from a service perspective we have more work to do and I think that we'll get there. It's a commitment from our management that we intend on providing best of class service as well. It's just something that's taking a bit more time than we anticipated because... Well, trying to service that many people is hard!

Yeah, we're feeling really good about Battlegrounds. Those people that have been playing it have been giving us a lot of positive feedback - people are very excited and having a great time, and I think it just kind of continues to evolve the gameplay experience. There's a lot of really great PvP content that's involved in that, and there's a lot of other content that is being provided in addition to that, with other instanced zones and instanced dungeons and what have you that really, I think, take the play experience even beyond where it already is.

The cool thing about Battlegrounds is that I think a lot of people think to themselves that that's going to be high level focused content - but with the launch of Battlegrounds, we have two large player areas. One is high-level Battlegrounds content, and then there's another area which is level 21 and up, so it'll allow players who are kind of mid-level to also have a PvP battleground area. The honour system is in full force and effect, so you'll be able to gain honour by playing in the battleground areas - I think it's a pretty exciting time.

We most certainly will do that. We haven't announced anything at this time, but I think that all of us would be naïve to think that we wouldn't do that. I mean, of course - we will most certainly do those types of things. When we announce it and what it will be is something that we'll figure out in the near-term future, but as of right now we haven't announced anything.

We've been in contact with Microsoft... World of Warcraft was really built with a focus on PC, and while I think it certainly could get to Xbox, it's not something that at this moment we've decided to do.

We're exploring any variety of possibilities, as you can imagine, and as it relates to [Xbox 360], it would require certain input devices - you know, a keyboard or a mouse. Those are things that are not standard, they're peripherals, and peripherals have historically not done well for any of the console companies unless you're talking about additional controllers or memory cards. Other than that, when you look at other peripherals, they historically haven't done so well - so for us, we're exploring it, we're listening, we're talking, however, we've not made any decision to go that direction at this point.

Most definitely. Since it was last seen, we've got a new developer working on it - a developer whom we acquired recently, Swingin' Ape Studios, so they now are a wholly owned subsidiary of Blizzard, and are working entirely and solely on Starcraft Ghost. There's a lot of new stuff that you'll see, specifically multiplayer; that was not something that was originally in there. It was originally contemplated, but not originally slated for Ghost, but we really felt that it was imperative for a Blizzard game of this kind to have a multiplayer environment. It's something that has been one of the core foundational elements of Blizzard games, and we felt that that needed to be delivered in this game.

So I feel that from a multiplayer perspective, there's a lot of exciting gameplay there, and the overall gameplay experience has evolved beyond where it was last year. We've done a lot of updating, not only of the story and the various missions that you're going to face, but also a lot of technology - we've improved the physics and improved all sorts of different elements of the game. We've been really overjoyed with Swingin' Ape, and feel like major progress is being made. Obviously there's still more work to do - we've got a lot of polishing to do and a lot of additional work to be done on the missions and what have you, but we're making really great progress and are feeling quite good about it.

We haven't announced a new release timeline, but I would say that that's something we'll probably be sharing in the relatively short-term future.

Well, Blizzard's original roots are in console. That's what we originally did back in the day when we started, and it's an area where many of us have quite a large love. I mean, I play a lot of console games, as do many of the other folks in Blizzard. And so, because Blizzard is very much a company built on making games that we want to play, console made sense for us.

That's not to suggest that we're going to leave PC - PC is our core competency, it's our core business, and candidly, it's our core love. However, there's a great love for console. It's a part of our roots, and we've wanted to have some console development that was in house, that would allow us to explore that area of the gaming business and to hopefully provide some really great experiences within our franchises.

Yes, they are! [laughs]

I think that there are definitely some new project announcements coming in the future, yes.

I can't share anything about that right now, but I would say that some announcements are certainly forthcoming.

You're welcome.