Thursday, July 8, 2010

Who is Activision/Blizzard's Customer Base

Traditionally, the customer for a video game company (publisher or developer) has always been the gamer.  Or, to avoid categorization, anyone who purchases a game to play it.  As a moneymaking venture, gaming companies focused on eliciting as many purchases as possible.  This motivated the developers to provide games and features that the most gaming customers would be interested in paying for.

Ask the average person on the street, and it's likely they think of television the same way: that the customer of the television industry is the viewer.  You would think, then, that this would motivate television companies to make decisions in the interest of the viewer, because their primary goal would be to make the viewer happy.

And yet, Firefly gets canceled, great shows get underpromoted into obscurity, and we're inundated with reality shows that everyone claims to hate yet everyone seems to watch.  [I believe they watch mostly because they want to watch TV and that's what happens to be on, and because it's something they can talk to coworkers and strangers about as a shared point of experience, much like sports; but the reasoning doesn't really matter to the point I'm trying to make here]

So why doesn't television cater to the audience in the way you'd predict if the viewers were the network's customers?

Because the television network's customer is not the viewer.  The network's customer is the advertiser.

NBC is not in the business of providing television programming to viewers.  It is in the business of providing eyes to advertisers.  Every decision is not made based on providing quality programming in a way viewers want to see it.  Decisions are instead made based on the most cost-effective ways to get advertisers to pay top-dollar for ad space.  That just so happens to lead to television striving to attract viewers, which often leads to the network acting in the viewers' interest; but such actions are coincidental.  They are simply a side effect of serving advertisers.

There's no need to demonize the networks over this, but it's important to be aware of it so we have realistic expectations.  Television networks do not consider you to be a customer, so don't be surprised when they routinely act in ways that seem unfathomable to you as a viewer.  If they lose 10% of viewers over intrusive product placements or longer commercial breaks, they'll do it if it increases the other ad revenue by 11%.  They'd never do it if viewers were the customers.

So what does this have to do with video games, and Activision/Blizzard's expansion of Real ID?  I'm glad you asked.

Actiblizz's recent actions seem unfathomable.  They are going against the wishes of the vast majority of their players.  They are startlingly unresponsive to criticism from the customerbase on the and Real ID issues.  They are taking actions that are clearly contrary to the best interests of their players, and are going out of their way to avoid explaining them (except through the ocassional half-truth like "cleaning the forums").  People are canceling WoW accounts and SC2 preorders left and right over something that seems so easily avoidable or fixable.  Don't they care about losing so many customers?

You have probably guessed where I'm going with this by now: we, the players, are no longer the World of Warcraft's customerbase.  Advertisers are.

It's pretty clear from this interview and other statements about Real ID about how they "have been planning this change for a very long time" that Real ID is the lynchpin in an effort to leverage an untapped asset that Actiblizz has more of than any other company out there except Facebook: our personal information

Facebook makes its revenue from advertisers by using our personal information to help them target us more accurately, and by using our social connections to lubricate the spread of marketing messages.  Activision has done the math, looked at their potential to help advertisers target 12 million people, and decided that, come hell or high water, the potential loss in subscription revenue will be dwarfed by the potential gain in ad revenue along with the other benefits to emulating the Facebook business model with a near-captive mob of players to be tapped.

Blizzard once had a reputation for making games for the players.  They were known for scrapping sub-par products rather than releasing them for a quick buck.  They were known for being more player-friendly than any gaming company outside of Valve.  But to Actiblizz, we are no longer the customer.  We are an asset to be monetized . . . stock in a warehouse . . . entries in a quarterly earnings spreadsheet.  We are now Actiblizzard's product, to be sold to advertisers for more than our subscription is worth.  This is, ironically, our reward for making the game so popular.

Actiblizzard has signed a contract with Facebook.  They are committed to this course of action, no matter what we say.  And no matter how many of us quit, it's most likely going to be a profitable move for them.

From this point forward, Blizzard's reputation is done.  We can stop expecting them to treat us like customers.  Advertisers are their primary customers now.

I wonder if Actiblizzard treats them as well as the old, dead Blizzard used to treat us?


Anonymous said...

So, the next question: Does the subscription stay?

Hatch said...

Well one of their execs was talking about free-to-play recently . . . it would give them access to more personal information, but I don't see them abandoning the monthly revenue stream until their math says that the new sign-ups would outweigh it. So I'm thinking free-to-play with the next expansion, with certain provisions where they can reveal more about you and pipe ads to you in some way.

Anonymous said...

Then the followup: the meltdown of the fanbase, Keen-style, and the new guard of Facebook addicts coming into the game.

Which of course makes me wonder what sales would be if they offered a FakeID for sale along side the sparkle ponies.

Pangoria Fallstar said...

Found this, don't know if it factors into it.

Anonymous said...

It takes all kinds to make a world.............................................................

Ixobelle said...

bye blizz

Myers said...

pretty sure that with the cancellation of real names on forum posts and replys, that this theory doesn't stand true. the customer (the one paying for subscription and the one who bought the actual game) is still number one on blizzards customer base.

Hunter said...

They didn't really cancel the RealId addition. They said due to high customer complaint they do not plan to implement it at this time. This doesn't necessarily mean that they wont implement it soon.

Andrew Stiffler said...

Great quote from Jarod Lanier's "You Are Not a Gadget"

"The only hope for social networking sites from a business point of view, is for a magic formula to appear in which some method of violating privacy and dignity becomes acceptable."

Andrew Stiffler said...

Great quote from Jarod Lanier's "You are Not a Gadget."

"The only hope for social networking sites from a business point of view, is for a magic formula to appear in which some method of violating privacy and dignity becomes acceptable."

Anonymous said...

So, has anyone hopefully created the equivalent of an in-game Ad-Block mod yet?