1.Executive Summary:
1.1. The Company:
Blizzard Entertainment® is a premier developer and publisher of entertainment software. After establishing the Blizzard Entertainment label in 1994, the company quickly became one of the most popular and well-respected makers of computer games. By focusing on creating well-designed, highly enjoyable entertainment experiences, Blizzard Entertainment has maintained an unparalleled reputation for quality since its inception. With its products such as World of Warcraft, Warcraft I-II-III, Diablo I-II and StarCraft, the company has earned several consecutive “Game of the Year” awards.
What is MMORPG?
Massively multiplayer online role-playing game (MMORPG) is a genre of computer role-playing games in which a very large number of players interact with one another within a virtual game world.
As in all RPGs, players assume the role of a fictional character (often in a fantasy world), and take control over many of that character's actions. MMORPGs are distinguished from single-player or small multi-player RPGs by the number of players, and by the game's persistent world, usually hosted by the game's publisher, which continues to exist and evolve while the player is away from the game. This is often referred to as being offline.
MMORPGs are played throughout the world. Worldwide revenues for MMORPGs exceeded half a billion dollars in 2005, and Western revenues exceeded US$1 billion in 2006. In 2008, Western consumer spending on subscription MMOGs grew to $1.4 billion. World of Warcrafthad over 11.5 million subscribers as of December, 2008.
1.2. Current Business Position:
Blizzard Entertainment has been the leader of the online gaming market for 6 years, since World of Warcraft was created in 2004. The most important reason to its success is the fact that World of Warcraft is the first “Multiplayer Online Role Playing Game”. When a service or product is the first in a market, it leads to the opinion that product or service is the most experienced and the most valuable one. Being used to a game is an important factor too. One of its success reasons is its imitations’ unsuccessfulness.
Here are some of the awards that World of Warcraft has;
Massively Multiplayer Game of the Year
Top 10 Games of the Year 2008, PC and Overall
Best Games of 2008
Favorite Expansion of 2008
Best MMORPG
Editors' Choice - Gamespot
Editors' Choice - GameSpy.com
Editors' Choice - IGN
1.3. Objectives:
- Attracting the inactive players* to play World of Warcraft at their limited time
- Provide new payment methods for players who are not able to pay monthly fee
- Provide families of the players who are under age 18 new opportunities to control their children’s security while playing
- With first 3 objectives, gaining monthly profit
(* Active players: The players who have an account but have not been in game for more than 3 months. The reason for not playing may be lack of time or being unable to pay monthly fee)
2.Business Description:
It is obvious that Blizzard has a distinct place in all of its competitors, its loyal customers and well-defined facilities cause this distinction. This business plan is designed to introduce 2 new facilities for the most well-known game of Blizzard; World of Warcraft. It is a known fact that World of Warcraft has nearly 12 million active players all around the world and we believe we can expand this active group with 2 new facilities in terms of security and payment. Aim of this business plan is to explain the 2 new features to make the company more profitable by attracting inactive players and families.
Facility I – New Parental Control Feature:
First of all, World of Warcraft is a game designed for players who are older than 12. In fact, 12 is an age that needs parental control and family protection. Despite the players who are between ages 12- 18 do not accept that fact, we must be sure that their families are comfortable with their child’s game time.
While providing the families this comfort to know how their children are spending time in game, we should be careful about not limiting the children’s freedom of playing. So, our first new facility about parental control should include:
-Not limiting the young gamers’ freedom of playing game
-Making the families feel comfortable about how their children spend their time while playing world of Warcraft.
Because World of Warcraft is a Multiplayer Online game, all players have the opportunity to chat with each other while playing, they can make private chats with “whispering” ability, or use chat channels such as guilds, trade channels, general chat channels. Here is an example of whispering ability in World of Warcraft:
As you can see, the players can make private conversations and this can make families to be unsure about their children’s freedom of playing. Despite improper behavior and harassment of the players are strictly prohibited, it cannot be controlled unless a player makes a complaint about the improperly behaving players.
Our new Parental Control feature consists of informing the parents about their children’s chat logs via e-mails. These chat logs will include
-Exact time that chat was occurring,
-Names of the sides of the chat
- Name of the server that chat was occurring.
If any unwanted chat is observed, the parent can send our support team an e-mail including these reports and an explanation why he found that chat disturbing. If the reported player is found guilty, he can be punished by our Game Masters according to the harassment policies of World of Warcraft. These punishments can be, being temporary or permanently banned or even being sued if there is a crime or abuse of the laws.
Here are the steps for the new parental control feature:
-When a customer who is under age 18 creates a new account, he is asked for birthday information in terms of month and year, name and surname.
- Second required field is e-mail and mobile phone number of one of his parents
-After all steps are completed, a validation message is sent to the parent, which includes name, surname, age of the customer, e-mail that the customer defined as his parent’s e-mail address and the confirmation code which is required to complete the account.
If the parent approves the information sent, he gives the confirmation code to the player and the player can complete creating his account. After the account is created, user name and password that the player defined is sent to the parent’s phone number. As the second step, the parent can log-in to “www.worldofwarcraft.com” web site with his child’s account and access to the parental control section. At this section, the parent can
·- Change the e-mail address that he wants the chat logs to be sent
·- Define user name and password to access parental control section, distinct from the child’s account name and password. This distinct user name and password prevents the children to enter the parental control section and change email address or disable control.
· -Enter the credit card information that parental control service will be charged.
The basic reason that parental control service being charged is to prevent the children to enter fake information such as his own e-mail or one of his friend’s e-mail. Credit card information which parental control will be charged should include exactly the same name with the information that was entered as the parent’s name while creating the account. The fee for this service will be a small amount but we believe that it will provide a big profit to Blizzard.
The fee will be 1€ for each month that the service is taken.
Active users of World of Warcraft are known as around 12 million and suppose that %10 of these customers is under age 18. If half of the %10 ask for parental control service, that makes %5 of whole customers. If we make an approximate calculation;
%5 of 12 million is 600.000.
If these 600.000 accounts are charged for 1€, that makes 600.000€ per month.**
Facility II – New Payment Method:
The most important reasons for a player to deactivate his account may be
- He may not be able to pay monthly fee because of his financial problems
-He may not be able to play world of Warcraft because he does not have time to play whole month, and he may not want to pay for whole month just to play for a few hours.
Existing payments of World of Warcraft are based on 3 choices; 1 month subscription, 3 months subscription and 6 months subscription
Cost of 1 month subscription is 12,99 (0,480 € per day),
3 months subscription is 35,97 € (0,420 € per day),
6 months subscription is 65,94 € (0,384 € per day)
With our new payment method, we will add one more payment method to these: 1 week customized subscription. When a player chooses this option, he will be directed to selection screen including the calendar table for that week such as:
| Please mark the playing days you want to purchase: | ||||||
| 19.04.2010 | 20.04.2010 | 21.04.2010 | 22.04.2010 | 23.04.2010 | 24.04.2010 | 25.04.2010 |
| | | | | | X | X |
Cost of each day is 1 € and when the days are selected, cost of that week is calculated dynamically for notification of the customer. For example on this table, the customer chooses 2 days and the price is shown as “Your credit card will be charged for 2€”, if the customer approves that information, he will have to enter credit card information and his credit card will be charged for 2 €.
Despite this payment method does not seem profitable, it provides a huge profit for Blizzard and also it provides convenience for the customers. If a player does not want to pay for the whole month in order to play only for weekend, he will be able to pay for only the time he played.
For example if a player wants to play only at weekends in a month, he will be able to pay for 2x4 weeks, that makes 8€, so he does not have to pay for 4,99€ more for days he does not play.
When we look at the Blizzard’s side, this payment method is still profitable because it is directly designed for inactive users. Currently, inactive players does not provide any financial income for Blizzard, but with this payment method, each 1 day payment received from each customer will be an extra profit. It is known that Blizzard’s inactive users are at least 3 millions, so when we make a simple calculation we can find the extra profit that these users will provide.
For example, if an inactive user plays for 1 day per week in a month, he will provide 4€ a month.
Suppose 1 million of these inactive users play 1 day per week, that will make 4 million € per month. This is obviously a good profit for Blizzard Entertainment. **
(**Taxes and expenses are excluded)
3.Market Analysis:
3.1. Market Overview:
The pie chart above shows the market share of the current Multiplayer Online Games in the market. As we can see, World of Warcraft holds the biggest part of the market share with 62,2%. The closest competitor holds only 7,5% of the chart. This pie chart can be seen as the proof that Blizzard is the market leader with World of Warcraft.
As we can see from the char above, World of Warcraft has been increasing its active players (so its market share) rapidly. In 2008 it reached 10 million active players and in 2010 it is more than 12 millions. Interestingly, the growth here implies that World of Warcraft’s market share is caused by many new players, rather than players deserting other games for it. The market share is large, but the market is being expanded by World of Warcraft.
Target market of Blizzard Entertainment involves all people who are willing to play Multiplayer Online games. Only limitation is age because such games have some violation as a nature, so World of Warcraft is designed for all players who are olders than age 12.
Of course some technical facilities are required but even these system requirements provide World of Warcraft a market advantage because most of its competitors’ system requirements are much harder to purchase. You can see the comparison of WoW system requirements and Age of Conan** System Requirements below:
(**Age of Conan: a new Multiplayer Online Game designed by Funcom)
Ø World of Warcraft PC System Requirements
OS:
Windows XP 32/64-Bit (Service pack 3)
Windows Vista 32/64-Bit (with the latest Service Packs)
Windows 7** 32/64-Bit (with the latest updates)
Processor:
Minimum: Intel Pentium 4 1.3 GHz or AMD Athlon XP 1500+
Recommended: Dual-core processor, such as the Intel Pentium D or AMD Athlon 64 X2
Memory:
Minimum: 512 MB RAM (1GB for Vista users)
Recommended: 1 GB RAM (2 GB for Vista users)
Video:
Minimum: 3D graphics processor with Hardware Transform and Lighting with 32 MB VRAM Such as an ATI Radeon 7200 or NVIDIA GeForce 2 class card or better
Recommended: 3D graphics processor with Vertex and Pixel Shader capability with 128 MB VRAM Such as an ATI Radeon X1600 or NVIDIA GeForce 7600 GT class card or beter
Storage: 15 Gigabytes or more free hard drive space is required
Sound: DirectX-compatible sound card or motherboard sound capability
Ø Age of Conan PC System Requirements
OS:
Windows XP Service Pack 2 or Windows Vista Service Pack 1
Processor:
Intel Core 2 Duo 2.4GHz or equivalent
RAM:
4GB Dual Channel DDR2
Video card:
NVIDIA GeForce 7900 GTX or equivalent
Video memory:
512MB
DVD-ROM:
Quad-speed (7x) DVD-ROM drive
Hard drive space:
32GB
As we can see, a computer required for Age of Conan is more difficult to purchase and more expensive, besides an average computer can run World of Warcraft smoothly. So this makes Blizzard Entertainment gain a distinct market share. Despite online game market is a fast growing market because of excessive development of new games by different Entertainment companies, World of Warcraft keeps its place and also increases its share in market. Reasons to this increase can be defined as;
*Loyalty of World of Warcraft customers
*Nature of Blizzard entertainment that keeps presenting new facilities for customers
*Being unable to find the quality of Blizzard Entertainment services at other game companies
*Unsuccessful competitors and unsuccessful imitations
3.2. Marketing Plan:
Marketing strategy for World of Warcraft will be global because of the fact that global marketing has lots of advantages such as
- Lower marketing costs
- Power and scope
- Consistency in brand image
- Ability to leverage good ideas quickly and efficiently
- Uniformity of marketing prices
In general, the more standardized the marketing program, the more these advantages will actually be realized. Current marketing program of Blizzard Entertainment can be a good example of global marketing, so we will continue with current marketing strategies mostly.
Blizzard has been using celebrities as frontiers since World of Warcraft was created. Some of these celebrities are;
Robin Williams (Actor/Comedian),
Vin Diesel (Actor), Cameron Diaz (Actress),
Jon Luvelli (Rapper/Music Mogul),
Felicia Day (Actress),
Ozzy Osbourne (Rock Star),
Dwayne "The Rock" Johnson (Wrestler/Actor),
Kanye West (Rapper),
Hulk Hogan (Wrestler) ,
Ben Affleck (Actor),
Mia Rose (Porn Actress),
Jessica Simpson(Singer),
Mila Kunis (Actress),
Macaulay Culkin (Actor),
Jonathan Davis (musician- Korn).
Some of these celebrities appear on World of Warcraft commercials and viral marketing channels. Mr T has also been characterized inside World of Warcraft. These celebrities can all be counted as role models for different segments of target market so it will be appropriate to continue advertisements with them.
Addition to current advertisements with celebrities, a celebrity parent who has a child aged between 12 and 18 will be used as a “parental control feature” role model. He/she will be a parent who has a gamer child and he/she will explain why he/she feels that his/her child is safe while playing World of Warcraft. This will be an important indicator for families that their children can play World of Warcraft safely too.
Another addition to the current advertisement is, about the new payment method. New features can be announced via web site of Blizzard and also on the loading screen of World of Warcraft. These loading screen announcements are called “tooltips” and players see these tooltips for at least 1 minute until loading is complete. So that will be a good channel to notify all players about new payment method. Second option will be mailing to the customers (especially inactive players) in order to inform them about new payment method.
3.3. Promotion and Sponsorships:
Since World of Warcraft was created, it has been sponsor to various contests such as
- WoW Comic contest
- Fan Art Contest
- World of Warcraft Movie Contest
- Lich King Screenshot contest
- Pumpkin Carving contest
- BlizzCon Dance Contest
- BlizzCon Costume Contest
- BlizzCon Original Song Contest
- BlizzCon Movie Contest
- Creative Writing Contest
- Blizzard Theme Park Contest
These contests all provide having fun with competition inside Blizzard Entertainment customers. People who are interested in join these competitions and show what they can do in order to win. These contests are broadcasted live on television and also broadcasted on internet (youtube channel). Winners of these competitions are generally awarded with in-game facilities such as mounts or pets they can use while playing World of Warcraft. Other players see these pets and mounts and these new features spread by WOM.
One of the most important factors of these contests being successful and interesting is that they are spread via internet (viral marketing). People can be notified about Blizzard contests and have fun while watching them even if they do not play World of Warcraft.
To make people be informed about new facilities of Blizzard Entertainment, interviews can be given to game and technology magazines and blogs. Details of these new features and what they provide for customers can be explained further.
1.Operations Plan:
Because of the fact that this business plan is about 2 new features about payment and parental control, we will not need location, logistics or transportation.
All developments about new features will be held in current technology center of Blizzard Entertainment which is located in Texas. Customers will be able to reach these features through web site of Blizzard (www.blizzard.com)
5.Management Plan:
New parental control and payment features will be developed for World of Warcraf, a game of Blizzard Entertainment. The Blizzard Entertainment research and development group comprises more than 250 designers, producers, programmers, artists, and sound engineers. Each member of the Blizzard Entertainment staff is a true game enthusiast, giving the company invaluable insight into creating products for gamers.
Headquartered in Irvine, Calif., Blizzard Entertainment, a division of Activision Blizzard, was founded in 1991 under the name Silicon & Synapse by Allen Adham, President & CEO Michael Morhaime, and Executive Vice President Frank Pearce.
5.1. Roles and Responsibilities:
Designers, producers, programmers, artists and sound engineers are responsible for development and improvement of the game.
For our new payment and parental control system, these employees are not responsible. Furthermore, billing support team and technical security team will be responsible for improvements of the new systems.
Web development team will also be responsible for application of the new features on Blizzard web site.
Junior team members and trainees will be responsible for notifying the customers about these new features.
A marketing and event management company will be chosen as publicity partner in order to arrange television and internet advertisements, new contests and new promotions. Marketing personnel will be working with that company in order to follow the process internally.
Management team will be responsible for all these teams.
5.2. Personnel Plan:(Personnel---------------Numbers to Recruit-----Average Salary-----Total Salary)
Marketing Personnel--------------------2----------4000€ ---------- 80.000€
Marketing Manager-------------------- 2 ----------6000€---------- 12.000€
Junior Team Member ------------------15---------- 1500€---------- 22.500€
Billing Support Personnel -------------- 40 ----------3000€---------- 120.000€
Billing Support Team Manager---------- 4 ----------5000€ ---------- 20.000€
Junior Team Member ------------------15 ----------1400€ ---------- 21.000€
Technical Security Personnel ---------- 40 ----------3000€ ----------120.000€
Technical Security Team Manager -----4 ----------5000 € ----------20.000€
Junior Team Member -----------------15 ----------1400€ ----------21.000€
TOTAL: ------------------------------155 ------174.300€ ----------436.500€
Hiring 155 employees in total may seem as an excessive number but when compared to 12 millions of active players, these numbers should be just enough.
New billing support personnel will be responsible of improving new “1 day payment feature” and junior team members will be responsible for notifying customers about it.
New technical security personnel will be responsible of improving new “parental control feature” and junior team members will be responsible for notifying customers about it.
In both cases, managers will be responsible for controlling the development, improvement and announcement of new features.
6.Financial Plan:
As we made the calculation about first new feature (parental control); we found that
Active users of World of Warcraft are known as around 12 million
suppose that %10 of these customers is under age 18
If half of the %10 ask for parental control service, that makes %5 of whole customers.
%5 of 12 million is 600.000
-If these 600.000 accounts are charged for 1€, that makes 600.000€ per month
Then, for profit calculations about the second new feature (new payment system for 1 day);
-if an inactive user plays for 1 day per week in a month, he will provide 4€ a month (fee of 1 day is 1€)
Suppose 1 million of the inactive players play 1 day per week
-- 4 million € profit per month will occur
When both new features are presented, approximate gain of Blizzard Entertainment will increase for 4.600.000€ per month. Of course this is the raw calculation excluding all expenses.
| | Gain | Loss |
| Gain from New parental control feature | 600.000€ | |
| Gain from new payment method | 4.000.000€ | |
| Monthly revenue of new employees | | 436.500€ |
| Monthly fee of partner marketing company | | 500.000€ |
| Bank cut on credit card transactions of new payment method (12%) | | 480.000€ |
| TOTAL | 4.600.000€ | 1.416.500€ |
| TOTAL GAIN | 3.183.500€ | |
Bank cut on credit card transactions of new payment method: Every transaction that is charged to the customers’ credit card is cut by the bank, whole amount is not transferred to the company.
Because of the fact that we do not know the exact amount that is cut, we used %12 approximate amount. That means if 4.000.000€ is gained from the new payment method, %12 of that amount is cut by the bank (480.000€)
