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Last month, Frank Pearce, one of the three founders of Blizzard and the current chief development officer, officially announced his resignation from Blizzard. This also means that among the three founders of Blizzard, only allen adham, who has been away for more than ten years, remains at the decision-making level, and he is responsible for the development of new projects. Blizzard's future has been handed over to the next generation of decision makers-however, there is not a smooth road ahead of them.

Part. 1 kingship is not eternal.

Since last year's Blizzard Carnival, the line "kingship is not eternal" in Wrath of the Lich King has been mentioned by people when talking about this company. Indeed, 20 18 was a year of record profit for Activision Blizzard, and the share price reached the highest point for a long time at the end of the year. However, things are impermanent, and Activision Blizzard seems to have reached its peak and declined.

From the end of last year to the beginning of July this year, Activision Blizzard's share price plummeted by 35%. Everyone knows that 20 19 will not be a relaxed and happy moment for Blizzard, but I didn't expect the impact to be so strong. In the first quarter financial report released in March this year, Blizzard's profit dropped sharply: from $480 million last year to $340 million.

More importantly, the operating profit of Blizzard plummeted from $65.438+$200 million to $55 million, indicating that the profit generated by Blizzard's main business has been greatly reduced. Although the first quarter of 20 18 was joined by news such as Watch the Pioneer Alliance and the expansion piece "Fighting for Azeroth", it was slightly unfair to compare the first quarter of 20 19 with 20 18, but it was still not easy to reduce the income by more than half.

Diablo: Eternal Life released by Blizzard Carnival 20 18 is the tipping point of a series of problems in Blizzard. After the press conference, the evaluation of this mobile game was mixed. In fact, objectively speaking, Blizzard, as a commercial company, values the mobile game market, and it is understandable to choose to launch the Diablo mobile game itself. Players are not rejecting this mobile game, but Blizzard launched the Diablo mobile game when people were expecting Diablo 4. The designer even popped up "Don't you have a mobile phone?" This kind of "golden sentence" that easily irritates players, no wonder players will point their finger at this dark hand tour that actually looks good.

Another storm facing Blizzard is the layoffs in February, which may involve the company's strategic adjustment. Activision Blizzard announced 800 layoffs in the fourth quarter earnings conference call, of which 209 were laid off by Blizzard-even though they just made record profits in the past year.

Robert Cotic, CEO of Activision Blizzard, said in a conference call that even though "we firmly believe that the layoff plan will bring more room for talented people to display", realizing the expected profit is "determined by many factors" and "there is no guarantee that our business will be more efficient with the implementation of the layoff plan."

It is worth noting that Kotic himself is quite controversial. When he was studying at the University of Michigan, he got an investment from Steve Wynn to develop software for Apple II, and then he took Jobs' advice and dropped out of school to start a business. 1990, Cotic, who had never been in contact with the game industry and didn't like playing games, bought a 25% stake in activision with friends, and served as CEO from 199 1 until today. He promoted the merger of Activision Blizzard during Vivendi's control of Blizzard, and redeemed Activision Blizzard from Vivendi through controversial means in 20 13.

In 20 109, Robert Kotic was one of the highest paid 100 CEOs selected by As You Sow, a non-profit organization. The ranking is mainly based on the salary ratio between CEO and ordinary employees, supplemented by reference factors such as shares. Moreover, in this list, Cotic is honored to be the first overpaid person in the history of the game industry: according to the data of 20 17, his annual salary is1750,000 US dollars-the equity is 26 million US dollars.

Most of Blizzard's layoffs this year are non-development employees, covering game distribution, e-sports, IT, marketing and other departments. Blizzard is at a huge disadvantage compared with its competitors in updating frequency. Although this is related to the consistent rhythm of Blizzard polishing and re-release, in the current environment, the rhythm of Blizzard is undoubtedly a negative factor to improve players' stickiness.

If Blizzard wants to develop more game content while maintaining the same expenditure, it is inevitable that non-development departments will lay off employees. Blizzard also laid off the e-sports team of Storm Hero at the beginning of the year and transferred a group of developers to other projects. Every team is trained by Blizzard-but Blizzard suddenly found that there are not enough projects that need these employees.

Activision's intervention in Blizzard has been deepening since Mike Mohan, the former president of Blizzard, left last year. This is not just a financial impact. Under the leadership of Cotic, Activision achieved commercial success by launching new year's goods. Blizzard has been advancing steadily at its own pace, focusing on the existing IP and launching new works when it is polished and perfected. Will the rhythm of blizzard be disturbed by passive vision? Although only half a year is not enough for us to see the answer, the final change may be unacceptable to players.

Wise men change with time.

If you try to invest in a company, the worst-case scenario is to lose all the principal. But if you have an eye for a booming enterprise, you can get several times the principal income-and Blizzard is such a high-quality investment object. An undeniable fact is that in the past five years, Blizzard's share price has risen by 108%, more than doubling. There is no doubt that Blizzard is now in a difficult period, but this does not mean that the market has lost confidence in them.

Early game companies can only get returns through the cycle of game production and sales, that is, their profits are completely linked to sales. Selling games to players is a "one-shot deal", but now game companies can make profits in more ways, enrich the game content by providing a steady stream of DLC or joining microtransactions, thus prolonging the profit cycle of games. Although this model is mixed in the eyes of players, it is undeniable that it has indeed improved the profitability of game companies. This is why we are seeing more and more "service games" now.

When talking about the long-term strategy, Blizzard CEO Robert said, "In today's situation, it is very appropriate for us to focus on the existing IP. Players spend more time on fewer games, and creating new works has always been the most difficult task in the entertainment industry. "

The predictions of various media on this year's Blizzard Carnival can also be seen. In addition to the "regular" updates such as the new expansion of World of Warcraft and the new expansion of Hearthstone, the sequels of existing series such as Watch Pioneer 2 and Diablo 4 are considered likely to be announced at this year's Blizzard Carnival. 20 19 1 1 This month is a critical moment for Blizzard-the achievements of strategic deployment made in the past year will begin to appear at this year's Blizzard Carnival.

Judging from the overall environment, Blizzard still has enough chips. According to statistics, the number of global gamers will increase from 2.2 billion to 2.7 billion in 20021year. In this $65,438+$0,400 industry, Blizzard still has huge room for growth: Activision Blizzard's total cash is about $2 billion, and its annual cash flow is about $65,438+$600 million, which means that they have enough resources to invest in game development and other businesses to save the momentum.

What's next?

In the past five years, Blizzard has been particularly active in releasing new series: 20 14 Hearthstone Legend, 20 15 Storm Hero and 20 16 Watch Pioneer. It is hard to imagine that Blizzard can continue to maintain such a development speed, so as CEO Cotic said, consolidating and developing the existing series is Blizzard's best policy. In addition to Diablo IV and Watching Pioneer 2, two new works that may be released at the 20 19 Blizzard Carnival, we should also be prepared to see the new news of Diablo: Eternal Life.

The mobile game market from China to the world is a great opportunity for Blizzard. Compared with the other two, Activision Blizzard's King Mobile Games Company may not be known to PC players, but you must have heard of their signature game "candy crush saga". In the first quarter of 20 19, the monthly active users (MAU) of Wangzhe increased from 268 million to 272 million compared with 20 18. Its advertising revenue has more than doubled.

Another key to growth is the e-sports industry. Before the establishment of Watching Pioneer Alliance, most events of Watching Pioneer were in an embarrassing situation for a long time because of the excessive restrictions of blizzard. In 20 17, other big clubs and I gave up the "Watch the Pioneer" project because we could not make ends meet, not to mention the living conditions of other small clubs. Blizzard's attitude towards warcraft 3 and other game events is similar.

E-sports events are profitable by advertising and sponsorship. How to get more sponsorship is the biggest challenge before Watching Pioneer Alliance. Thanks to the huge player base and the urban team model that draws lessons from traditional sports, the development of Watching Pioneer Alliance is booming, and new players have joined in the second season.

However, geographical factors also make Blizzard need to convince advertisers outside the team city that e-sports advertising is a cost-effective investment. However, judging from the sponsorship of Budweiser Beer and Coca-Cola in the second season, the future development of Watching Pioneer Alliance can be expected. When talking about the suitability of the league, Kotic said that "great development potential" can be seen from Watching the Pioneer League.

Although "kingship is not eternal", Blizzard, which still holds many good cards, still has a chance. Yes, it is going through the throes of strategic change-but players still want to see the rebirth of Blizzard.