Tag Archives: Business News

The Loot Council- October 4, 2009

The Loot Council is regular column highlighting interesting and informative posts from around the WoW finance blogosphere.

Announcements

  • First off, two more new WoW gold blogs are on the scene. Today we welcome Dark’s Guide to Gold and Trowlcat to the game. These blogs are also now listed on our sidebar and Resources page. Check them out and give them a warm welcome.
  • We also wanted to point out that the Misc. blog is now listed on our Resources page. This is a great blog that we’ve mentioned previously and is well worth a look.

In WoW Finance News

In Real Business News

Note that the above blogs are not listed in any particular order outside of the way the team brainstormed them. Please let us know if there are any sites that you feel we should feature and we will do so in a future edition of The Loot Council.

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Activision Blizzard CEO Speaks on Corporate Culture

Yesterday, reports Gamespot, Activision Blizzard (ATVI) CEO Robert Kotick spoke at the Deutsche Bank Securities Technology Conference in San Francisco. During the 45-minute presentation he, apparently, discussed a range of issues including the timing of the next cycle of gaming consoles, the possibility of a console-less Guitar Hero future and, most interestingly (to us anyway) the “Culture of thrift” that he instills at the company.

Extracts of Mr. Kotick’s speech include:

  • His intent “to take all the fun out of making video games.”
  • Touting an employee incentive program that “really rewards profit and nothing else.”
  • Pride in instilling a culture of “skepticism, pessimism, and fear” of economic conditions.

While it is understandable, and to be expected, that a CEO of any company focus stringently on the bottom line, we do have to wonder what message this sends to those that create the games that we so enjoy. Already, a few noted game industry insiders have expressed their discontent with working in such an environment. It is worth noting that the Activision Blizzard merger is still in its infancy (or perhaps adolescent years depending on scale of measurement) and, as yet, it is difficult to quantify how this culture might influence Blizzard’s current and future creative efforts. Superficially at least, it does appear to be counter-intuitive with the culture of fun and awesome that we were shown during the Blizzcon ’09 Irvine, CA office tour. Mmmmm, not really seeing the thrift there.

It is, perhaps, relevant to note that Mr. Kotick was speaking at an investment-banking forum in which one would probably be well advised to speak of thrift and restraint given our current economic climate. Along those lines, Kotick also focused a significant amount of his time on discussing “mouth movement technology”. Given that he was talking to a bunch of bankers about one of their favorite topics, savings and thrift, we wonder to what degree he was simply providing a demonstration of the advancements in this emerging field. Mastery of which is, of course, another key trait of any successful CEO.

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The Loot Council- September 13, 2009

The Loot Council is regular column highlighting interesting and informative posts from around the WoW finance blogosphere.

First Up, Business News

On the WoW side of things there was lots of talk of Inscription last week

WoWenomic news highlights not specific to scribes were also pretty good…

Interestingly, there’s also a Monopoly movie in the works. We know, we know… sounds dumb right? But get this, one of our team members is kinda sorta close with an East Coast film producer who shared this interesting theory with him: Seems that video game movies were kinda successful (but, according to the movie execs, we were too dumb to get it) so they went with toy movies. Toys were the next logical step in the descent of our intellectual play and by stepping down the ladder of intellect and complexity the movies were somewhat more successful (Transformers 3 anyone?). The next step in this process is to churn out movies based on board games so here we go with Monopoly. Make sense now? No? Still sounds dumb? Yeah, we think so too but we can’t wait for Checkers, The Movie. We still stand by our own theory, video game movies are just fine thank you very much. Perhaps the problem is not the audience but the crappy movies the studios churned out.

Note that the above blogs are not listed in any particular order outside of the way the team brainstormed them. Please let us know if there are any sites that you feel we should feature and we will do so in a future edition of The Loot Council.

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Profiting from Server Down Time

The WoW alert system is showing that there will be some additional down time this morning in the form of rolling restarts for some servers and an extra four hours of maintenance for many other realms. This is a fantastic opportunity for profit for the opportunistic WoW trader. We’ve previously pointed out some of the ways to make gold from these types of situations. Highlights of opportunities include:

  • Less competition- Less players able to log on means less players posting in the AH.
  • Weaker competition- Your main competitors may not be able to log in. Use this opportunity to gank the AH and jack up the prices. If this is the case, consider posting for shorter durations under the assumption that the competition will return when technical issues are resolved.
  • Expiring auctions- The ‘Monday night effect’ occurs on other days as auctions are due to expire. Look for underpriced bid items and pick the low hanging fruit.
  • New content opportunities- As extended and unscheduled maintenance is almost always attributed to new content releases, prepare for the needs of players running that content. Initially expect to sell healing/mana potions, flasks and other consumables and eventually start selling enchantments, enchanting materials, item enhancements and gems and glyphs. This is a classic seller’s market.
  • Overcut- Yes, we made that word up. But the concept is simple. If the above point is true and some items are going to sell out quickly than there is opportunity to be had by selling at the top price of a market. If you expect an item to sell out (i.e. there are only several listed of an item that usually moves quickly) don’t for them to sell out and then post yours. Simply price your item at a higher price under the assumption that when the others sell out yours will be the only option left. Fantastic opportunities for this type of market manipulation are currently high-end cloth, select flasks, and our favorite, raw epic gems. Several realm’s auction houses scanned this morning showed only 3-5 raw epic gems in stock instead of the normal 10-20.
  • It’s not you, it’s me- In the event that you’re the one experiencing technical issues and unable to log on, ideally you’ve already posted some items in the AH with high prices in anticipation of the downtime. Either way, take this time to brush up on your trading skills by looking through our archives or visiting some of the real world business and trading sites listed on our resources page. In fact, we’ll suggest a few fun articles…

Here are a few favorite real-world business articles from the past few days for your downtime reading pleasure:

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The Pitchman

The recent passing of legendary pitchmen Billy Mays and Ed McMahon got us thinking about the pitchmen of WoW. “WTS [item]” is the /trade chat standard but so much more can be done with this message depending on what your selling goals are.

Name Your Price

In WoW, many people do just fine with a “WTS _____” message in /trade but this simple message leaves room for inefficiencies in trading. First of all, how many people are just going to buy the item without asking the price? This means that before you can even think of exchanging gold, another player will have to message you inquiring as to your price. Worse, some sellers take this logic a step further by responding, “Well what do you want to pay?” Surely there is a price point that is too low, and surely there is a price at which you want to sell it. So just say the price in your advertisement and move on. Yes, you may squeeze a few more gold out of some sucker who might pay more than your asking price, but why waste the time of responding to the majority of buyers who will go back and forth asking about the price and accusing you of charging too much. The exception to this is when you are trying to sell an extremely rare item, as there may not be an established market (and thus price) for the item yet. But if all you’re trying to do is sell a few eternals, or yet another crafted blue item, just state your price.

We’re not saying to not negotiate. Price negotiation is a separate, and valid, issue. What we are saying, is that there are many players who will be turned off by your lack of listing an offering price. Ever see a used car with a ‘For Sale’ sign in the window and a phone number but no price? Want to know why people don’t list their price on cars like that? Because they know the price is probably higher than what most buyers will pay. They also know that if they could only get you on the phone and asking about the vehicle (and consequently showing that you have interest), then they have a better chance of explaining the higher price to you. We highly doubt your stack of Eternal Fires has custom racing rims or that they were driven only on Sundays.

What’s Your Pitch?

In the world of finance, entrepreneurs are expected to be able to summarize their business plans in a succinct format often called an elevator pitch. Now, if you developed such a pitch to offload your eternals most people would think you’re crazy, but it does help to think about your message before you start seeking buyers. This is mostly true if you’re a regular seller of a particular item, or set of items, and you want your selling toon to be associated with this market in the mind of the buyer.

You might even consider developing a text macro for items you sell regularly. We’ve seen people saying things like “Jed’s Eternal Fire Store- We bring the heat!” While ridiculous, these adverts are memorable. In fact, in discussing this matter with the WoWenomics team, every single member could identify the name of a toon on their server that regularly advertised a specific good or service in a funny or goofy way. That is what we call branding and it is a powerful message that resonates with consumers- sometimes even long after the product is gone. To wit, there are many people who, to this day, if we were to say “…Our prices are Insane!” will know exactly what store we are talking about. On a wider scale, if we were to say, “I’m lovin’ it” more people would associate the song with McDonalds than they would with the original artist.

Use It Wisely

Again, perhaps not the most rational approach to selling in WoW, but if you want buyers to come to you even when you’re not advertising, it is one way to go. Perhaps, as a cautionary note, we should also add that there is a very fine line between funny and annoying, so use your message sparingly and don’t spam /trade repeatedly. It may also pay to test it out on a trial audience that is not your mom (who thinks all your jokes are funny) prior to broadcasting to the community at large.

Timing is Everything

Also, think about your timing. Generally speaking, the servers are busiest during the evening and weekend hours. If you’re having trouble getting responses to your pitch it may not be entirely the fault of your approach, but rather the timing of your delivery. Try again when there is a different population pool on-line.

Adapt as Needed

Your pitch may not work initially. It may be bad timing or even bad humor. Keep trying, be innovative and always keep in mind that a good marketer is dynamic and able to adapt to the situation at hand.

…And That Other Guy

We almost feel remiss not to mention the most notorious of the lot when talking about legendary pitchmen who have recently passed. We feel, however, at this point it has become this kind of a situation.

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The Death of WoW

A fierce debate has been raging within the WoWenomics team for the past few weeks. This debate has centered around the simple question, are we witnessing the decline of World of Warcraft?

The Opinions

It was initially an insightful article on Spinksville that got us talking about this subject. In that post, Spinks mentions the age of WoW and ponders if MMOs might suffer the same marked decline as the author observed with MUDs. The argument about the connection between MUDs and MMOs aside, it did serve to get us thinking of the life of WoW more in terms of an arc as opposed to a straight timeline. If we accept that the life of WoW is an arc we are then prompted to ask the question, just where in this arc are we currently? Is WoW in a state of increasing or decreasing popularity and success?

As we mentioned, the WoWenomics team is torn on the state WoW. One of our members insists that WoW will live on (with continual content patches and support) even if subscriber numbers dwindle. In this way, says he, the game will never die so long as the endeavor remains profitable. Others argue that the game has already passed the plateau of the lifespan arc and is now in a state of deterioration. A few of us are of the belief that WoW is at the very top of the arc of the game’s lifespan and Blizzard is at the top of their game. Of course, this implies that there is an inevitable decline ahead. Tellingly, none of our number took the stance that the game is still on the upswing.

For their own part, Blizzard states that there is no firm deadline upon which they will shut off WoW. As business people, however, we argue that there is. Certainly they’ve already decided upon a certain threshold where the business becomes unprofitable and will be discontinued.

The Evidence

So, about that arc… Is there some way to definitively identify where we are in the WoW lifecycle? The evidence of decline is easy to measure but, perhaps, difficult to quantify. Wolfshead presents a well-thought out and comprehensive analysis of the web statistics for the official WoW domain. In the same post, the author presents a graph, charting Blizzard’s announced subscriber statistics. Seeing the data presented in this visual format makes it easy to identify a flattening of the upward curve that previously represented player growth.

But there is other evidence of decreasing popularity as well:

What is most evocative about this culmination of data is that we have been in the money-making business long enough to know that it often takes several factors culminating in a cohesive timeframe to force cataclysmic change. Is this what we are seeing now?

The combination of decaying web stats, leveling off of subscriber numbers, anecdotal user experience reports on players taking extended breaks and closure of high-profile community sites all seem to point towards a shift in popularity. So if WoW is not in decline, it certainly seems to be at a plateau. Were this an investment we were trading, we’d argue that now’s the time to sell.

The Economy

Which brings us to the point of the in-game economy and WoW wealth-generation. We assert that the effects of a decline in the popularity the game will be felt very early in the economy. Perhaps just after players report exodus of friends and guildies to other games or non-gaming activities. We are split as to what that market activity will be, however. Will we see mass inflation as no one is farming anymore and prices are driven up by supply shortages? Or will it be the opposite and that the markets will deflate massively given a lack of demanding customers. Will Blizzard take any form of corrective market action to stabilize the game economy?

As traders in the various WoW markets we also have to ponder what we should do with our wealth and when to do it. Do we start selling our stockpiles of goods now, while we can still get maximum value? Or do we do it later when we may get less but can be surer of a state of decline. Should we be spending like crazy now just to have fun with it while we can? One thing we are fairly certain of is that, just like real life, you can’t take it with you.

The Future

Blizzard has already stated that their next MMO will not be WoW 2. That said, we do predict that they will pick up the WoW franchise again at some point (even if this is some years out) as they’d be mad not to.

We highly doubt that, regardless of the theme of Blizzard’s next MMO, you will be able to take any of your virtual property with you into the next game. This is understandable. Although we think it would be a pretty nice touch if you could reserve your character and perhaps even guild name, based on your WoW equivalent.

In the mean time, there will still be a few content patches and perhaps even another expansion cycle to go through before Blizzard pulls the plug. And even if they stop developing new content they may still keep the game going indefinitely so long as it is profitable.

The End

So if WoW is losing its appeal, we are forced to examine why we are amassing wealth in the game and if it is time to spend more than we save. Obviously, the answer to this question depends largely on your personal goals as a WoW player and trader so we can’t answer for you. When it comes down to it, whether or not the game is in a state of decline or growth is irrelevant if you’re still having fun playing it. So long as playing still feels like a fun way to spend your leisure time and building in-game wealth is part of that fun, by all means continue trading away even if the ship happens to be sinking around you.

That said, given recent events and the aforementioned data, perhaps it is time to- at the very least- start thinking about just what you mean to do with all that gold.

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WoW Insider Rebrands as WoW.com

Late last night, as we were putting the finishing touches on our own spring-cleaning, popular WoW news and information portal WoWInsider.com became WoW.com. The name change was complimented by a change in design philosophy wherein the traditional light and open design was replaced with a dark background layout that is popular among many gaming web sites.

What is Rebranding Anyway?

Many companies choose to change their corporate or product image from time to time. The act of rebranding is usually the act of changing the way a product, service or company was traditionally portrayed into a new identity. More often than not, a rebrand signifies a desire by the company to distance itself from its previous image or identity. Sometimes a rebrand is forced by changes in society and other times the driver of change is the entity itself, perhaps seeking to cast itself in a better light. Still other times, a company changes their brand as an attempt to gain better control of their industry and/or market share.

There are successful attempts at rebranding and many examples of the not so successful. Building a successful brand is usually an extremely expensive endeavor, as it typically requires the investment of the three most costly expenditures of any business: time, effort and capital. Therefore, rebranding is traditionally a risky move that further implies that something was not working as intended with the initial product.

So, what was wrong with WoW Insider that they decided to rebrand?

Why the Change?

The changes to the site went much further than simply cosmetic. With the rebranding effort they also launched their new profiles service and add-on. This feature is obviously the focus of their new efforts- a revealing 80% of their welcome message is dedicated to the profiles feature. Accordingly, WoW Insider is now trying to capitalize on the rising popularity of social networking as they are now encouraging users to share their information with each other, develop personal blogs and galleries and show off their characters within their own proprietary closed network.

So there was nothing particularly wrong with the previous WoW Insider brand (although the upgrade in platform allowed them to address some long standing issues with comment control) so the change must be motivated by a desire to improve on their product. The primary reasons for the change, we believe, is both to increase revenue/drive traffic and to utilize what must have been a very expensive domain acquisition.

By getting readers to create profiles and install add-ons the people behind WoW Insider will be able to gather additional statistical data about their members/readers that will be of value to advertisers. We expect that WoW.com will eventually post a “We’re not selling your personal information” post which will be accurate because they won’t sell (hopefully) private user/reader data but will (presumably) use the generic data gathered to better sell advertising space.

As far as the acquisition of the WoW.com domain goes, the common thinking on internet marketing is that short, memorable domains are always of the highest value. By shortening their URL, the peopleformerlyknownasWI will be able to capitalize on both a closer association to World of Warcraft as well as a shorter, more memorable domain. Interestingly, we don’t think that they actually own the WoW.com domain. Long ago, AOL obtained this domain in a corporate buyout of a smaller company and we would expect that they would be hesitant to sell at any rate that the folks at Weblogs, Inc could realistically pay. A quick search of domain ownership at NS confirms our suspicions that this domain is indeed still the property of AOL and thus implies that it is being leased by WoW Insider/Weblogs and not outright owned.

Will it be Successful?

The jury is still out on this one. We suspect that there will be some confusion initially but overall the WoW.com brand will thrive. It was a successful brand before and will continue this success in the future so long as WoW remains popular.

There are still some kinks to be worked out and overall the transfer has a rushed feel to it. There was no announcement of the change prior to implementation, which would only serve to confuse users. Adding to the feeling of rushed execution is the typo in the original announcement, “By creating profile on WoW.com you can…” Note: You can expect this grammatical error to be fixed within minutes of this post going live so visit now if you want to see the error first hand (and you’re welcome for our pointing it out WoW Insider).

Other concerns would be those of privacy as mentioned above and last but certainly not least, the fact that Blizzard’s lawyers have been on a warpath lately. By converting to WoW.com and posting WoW related information, as well as creating an add-on and social network for Blizzard’s game, Weblogs, Inc. now runs the risk of walking very close to the intellectual property line. Hopefully these kinks either have already been worked out or are being worked on even you read this.

Overall, we’d like to wish the folks at WoWInsider WoW.com luck in their new endeavor. It is a bold move and we wish them nothing but successful results.

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