Blizzard incurs 'substantial loss' from BlizzCon

Despite selling more than 20,000 $125 tickets and massive merchandise sales, the World of Warcraft publisher loses money during each of its annual confabs.

This year, more than 20,000 people gathered at the Anaheim Convention Center for BlizzCon, the annual expo celebrating the Diablo, Stacraft, and Warcraft franchises. Given that Blizzard Entertainment charges $125 per ticket to the event--where it sells hundreds of thousands of dollars of merchandise--and sold pay-per-view rights to DirecTV, one would expect it to be profitable for the company.

It isn't.

Today at the 2009 Austin Game Developers Conference, Blizzard Entertainment cofounder and executive vice president of product development Frank Pearce revealed that his company still doesn't make a profit on the expo. "BlizzCon is operated at a substantial loss for the company," said Pearce. "It's a huge marketing opportunity, so that's the benefit we get out of that. But in terms of any kind of financial gain, it actually is a loss for us."

The Anaheim Convention Center doesn't come cheap.

When asked how much Blizzard loses on each event, reps offered the following statement: "For competitive and confidentiality reasons, we don't provide specific financial data. However, this year 20,000 players purchased tickets to the show, and tens of thousands more followed along on television and the Web via DirecTV."

Though Blizzard wouldn't get into specifics, its BlizzCon losses likely stem from a variety of sources. First, the company has to rent the Anaheim Convention Center and provide nearly 2,000 computers for demos and the expo's tournaments--which themselves have cash prizes to be paid out. Secondly, the company must fly in staffers from around the globe to man the event, causing a major crimp in productivity in the weeks leading up to it.

Those Kerrigan mannequins don't pay for themselves.

Finally, Blizzard has to pay for appearances by celebrities, such as Starcraft II star Tricia Helfer, comedian Jay Mohr, and musical acts like this year's Ozzy Osbourne concert.

However, as mentioned above, Blizzard feels the real payoff is the enthusiasm its event generates among its fans, including the 11-million-plus players of World of Warcraft. "We treat BlizzCon as an operating expense," the company said in a statement.

In his GDCA speech, Pearce outlined the sheer scale of operations it takes to keep those subscribers flush with new content. Put together, the massively multiplayer online role-playing game and its two expansions have 7,650 quests, 70,000 spells, 40,000 NPCs, 1.5 million assets, and 5.5 million lines of code, and require 4,000 employees, 13,250 server blades, and 75,000 CPU cores.

Written By

Want the latest news about World of Warcraft?

World of Warcraft

World of Warcraft

Discussion

162 comments
fend_oblivion
fend_oblivion

Well, I'm pretty sure whatever loss they make here will be offset by profits from WoW.

Sithlord
Sithlord

Let's break this down shall we? $14 average a month per account per month. Multiply that at the huge 12 Million subscribers worldwide. $14 X 12Mil = $168,000,000 (168 Mil) a MONTH $168Mil X 12 months = 2,016,000,000 (Over two BILLION yes BILLION a year) Now.. that's MINUS, the paid character transfers, name changes, realm change, account transfer, race or faction change. Or the cost of the game and each exp pack. Oh and lets not forget the wonderful $6 a month for remote auction or the cost of the authenticator. Or what about SCII sales? 1.5 million units were sold in 24 hours worldwide. Yeah.. they are HURTING for cash. Then they have the gall to charge $125 a ticket per person and complain they lose money on BlizzCon? I mean I am realistic, remove development cost, employee salaries, server maint for Battlenet and WoW, plus emp insurance. Rent, marketing etc... etc... But come on. I think I have paid my dues to Blizz for the last 5 years on WoW. How about you?

sadon06
sadon06

OMG people... cant give most of u guys much credit for thinking. Blizzard doesnt need to lie about blizzcon not being profitable as an event. So why do u have to be so sceptic about it. In the end it ofcourse pays itself back. And u can be sure that they wont deny that. From the fact that the event pays itself back eventually. U can not complain that they r wasting money.. because in the end the event pays itself back. And so it doesnt take money from game development. Let the fans and blizzard have their event. In the end its not away from anyone. Why complain why whine? Scepticism is ok but when it doesnt have any good reasoning and thinking behind it. It changes to just being paranoiac.

Hessien
Hessien

Maybe they should sell vanity pets and give half of the money to charity and half of the money to.....oh wait they have already done that.

Flamuel
Flamuel

They can afford to loose a little bit of money from all the income they get from WoW and soon Diablo 3 and starcraft 2? people say Activision did well with MW2 can't wait to compare sales, especailly as blizzard still has, probably, the largest PC fan-base of all publishers/devs. Valve coming close.

BurningUp99
BurningUp99

I wouldn't feel too sorry for Blizzard you ever do the math on how much they have coming in from WoW??

AzatiS
AzatiS

""Though Blizzard wouldn't get into specifics "" So how would i know if they actually saying the truth or they just hiding behind this ""loss"" with more profits. We all know that many blizz fans dissapointed from this event prices and we had many ""whines"" about it... And its now that they made this statement but no, they wont go in specifics... Come on now.... And ill say im millionaire , and ill show you a castle as my real home but if you ask me for details and proofs ill say you "" Im not goin into specifics"" ... Does this make me a millionaire with a castle as my home right??... Come on ...

iRevive
iRevive

poppen695 -> Not really, they literally feed the servers with tons of cash.. Of course they have profit, but not as huge as you imagine. The fact that they DO have money is only good news for you. They can spend the money to make a great game. Stop poking an already cold crap ;) Its been talked about far too much ,even commenting on it further is really useless...

poppen695
poppen695

..and then they make it all back 10 fold in one month of WoW billing. Gimme a freakin break...

KBFTodd
KBFTodd

whah....and I guess the 150 million a month in charges from us does not help....

JakeYourself
JakeYourself

Makes me glad i reactivated my wow account the other day. Im glad they still run Blizzcon, don't ever stop.

DarkKnight414
DarkKnight414

Why does everyone hate on blizzard so damn much about how money they make, or how much they lose, who cares, why not play there games and enjoy them or quit complaining so others don't have to hear it. All I hear in any of these comments about blizzard is how much they suck or why there complaining about losing money on certain events when they get it all back from sales, I mean does it really matter when there just a gaming company, everyone makes it sound like there running a country or something LOL.

Dematrix
Dematrix

they arn't loosing a damn dime, what they spend in this "advertising" they make back 400% with sales. the tobacco company put 125 million dollars donation into cancer treatment and spent 145 million in advertisement to "say" they donate to cancer, if you didn't figure that out on your own your a moron, if you use your mind 50% of the time or have a business degree and figured this out easy then congrats. i wish these people would stop talking to others like were idiots.

storepatter
storepatter

Of course nobody believes that without some sort of specific budget, and since they are not going to release that - well nobody believe they are losing a cent on this.

maxgil2
maxgil2

And yet you continue to run the event?...kinda dumb that whinging abt loss yet still continue to run them?

Deathscyth-Hell
Deathscyth-Hell

Wait... what does Blizzard do again? I thought they've gone out of business or something...

Lach0121
Lach0121

its all about marketing, and profiting, yea blizzard made some good games. diablo, warcraft, starcraft... but seriously, why dont you celebrate it by spending money on developing the games that (blizzard) charges top dollar for, instead of spending all this money on celebrating by marketing, please the fanbase on diablo, and starcraft dont need this "insertnameCON" as a waste of resources and money... they are waiting at home well over a decade for these sequels, stop stalling and wasting time and money with these unnecessary events.

CaseyMJones
CaseyMJones

An operating expense. Psh. They were already the top-dogs of PC-Gaming. Millions of WOW subscribers, and even more longtime fans of SC and Diablo ready to buy the followups even if they didn't spend a bloody dime on marketing. Basically, this goes to show that Blizzard is so set on patting itself on the back and throwing a big party that has really little to do with making and releasing games that they don't even care if it puts them in the red. We never got StarCraft Ghost but now we're got Ozzy at BlizzCon. Keep up the good work guys. I never thought I'd see the day where I missed Bill Roper @ Blizzard.

24k_Solid_Gold
24k_Solid_Gold

" so whats a few million expense when 10's of millions will be added to the coffers within a weeks time from subscription payments. " Ya, I hear they get about 100 million a month from wow. That's pretty nuts.

thecraponahat
thecraponahat

Seeeesh! so what they can make triple the profit on a single game

bennae66
bennae66

if i ran blizzard and had that many zombies paying such a constant steam of revenue (you know who im talking about, wow fans) then blizzcon really is a drop in the ocean. yeah, so whats a few million expense when 10's of millions will be added to the coffers within a weeks time from subscription payments. business is business and blizzard knows how to play the game better than the gamers. good on them. i cant wait for starcraft 2, but you cant pay me to play a mmorpgssspptthgtsttuggperrg because i have things to do, and many different games to play.

Humanseye
Humanseye

I'm pretty sure if they cut back the frills a bit, like maybe 50 100" LCD TV's rather than 100's, and such, they'd break even. Like they said in the story, they spend money on tons of worthless stuff. I think it is clear they don't WANT to break even...they are not trying, that's for sure. Not to say if they could, that they would refuse to make money, but, it's not like they tried at all to cut back on spending. Plus more publicity now with their 'we lost money at blizzcon' press release. I'm sure they made back the entire event now in ad and game sales.

tindrli
tindrli

nek je vala kad su im igre ka karina zadnjih godina

2w-sephiroth
2w-sephiroth

I am pretty sure that both Blizzard and all their fans are happy to spend a little bit of money for a freaking awesome event. I will surely get Starcraft 2 and Diablo 3 once I get a real decent computer.

ShimmerMan
ShimmerMan

The loss they took from organizing Blizzcon they probably make back before Blizzcon had even finished - from interest on their quad zillion million WOW gold.. wait not WOW gold... I mean dollars, they have sitting in the bank.

Dazza102
Dazza102

They have their own private E3, its just a giant biased hype channel for Blizzard to preach to the already converted. I don't know why the ESA doesn't just get Blizzard to organize E3.. they do a better job IMO. That said though I don't approve a game developer having its own trade show, the whole fun of the trade show is the competitive factor. I mean just look at QuakeCon.. how many terrible games have been hyped there lol.. now it'll be even worse since ZeniMax will get Peter Hines to organize it.. HURRAY Foo Fighters and Winona Rider for everyone!! wooo... BlizzCon > QuakeCon.

_el_Greco_
_el_Greco_

Well, it's good to know that Blizzard still has a heart that's not... cold... ; ))

magusat999
magusat999

MattHopeKids: Blizzard is one of those companies that ALWAYS takes way too long to ship it's games ("It's done when it's done" mindset). There is a point when "making the best game" becomes "taking ridiculously way too long to release". By now Blizzard should know how to release a game at the proper time, like when their fans are rabid for it... not after their fan base has moved on to other venues and people barely remember the Series' name anymore. You can be on time, or you can be late. Not specific to only Blizzard, but a lot of games fall by the wayside because of tardy releases.

magusat999
magusat999

WHy is this article written as if it is some big company meltdown - I think the "Loss" angle is lost at this part: '"We treat BlizzCon as an operating expense," the company said in a statement." It's an operating expense - just like paper clips, not some bottom-line burdening loss, like the title mis-leads you to believe the article is about. They aren't even considering shutting it down - so this article might as well have been a nice article about Blizzcon. What a waste of reading...

Seljek
Seljek

In order for them to do this, they must figure that they make just as much back in publicity. After all, they don't like the customers... they like the customers' money. They would not do this without a figured profit in the long run.

evaneself
evaneself

Expelled from fat. Not swollen prices, expelled from those who do nothing.

SrTVBR
SrTVBR

Worth treat us (fans) well because in return we will love even more them (blizzard) and their awesome games.

MegaWang
MegaWang

[This message was deleted at the request of a moderator or administrator]

CaptainCrazy
CaptainCrazy

It's all about the shareholders. They never like a company to take a loss on anything. Heck, they even freak out when a company misses a profit estimate by 1%!

LordAsher
LordAsher

Blizzard, I have to say this, I love your Diablo line, that is by far one of the best games ever made in my own opinion. But quit b******* about losing money for BlizzCon, you spend all the money getting the hype up, hiring all these big celebs and putting f*** tons of money into getting this thing set up and then you b**** about not making any money off of it? You may be a big company but obviously its not made you smarter... if the hypes there then its there, no need to spend all the money to glorify it. I'm sure the people who paid $125 per ticket feel just as ripped off as you. Sale lower priced tickets, don't blow your cash on all the big stuff, just set up a few computers for the new things and move on. Your a huge, famous company... people will still pay to get in and you wont be losing any money for it not being flashy!

MattHopeKids
MattHopeKids

Why complain that someone is actually taking their time on a game? If more companies took longer to develop games, we'd have fewer crappy games, and more stellar awesome games. I can't wait for Diablo3 but I also know that it's gunna be simply amazing because Blizzard is putting so much time and effort into it. Just please don't start charging to go online, it would destroy the game.

szwierzy
szwierzy

jmrwacko--- More games?! That's not Blizzard, and I don't think that will ever be Blizzard. They were celebrated for nearly a decade for releasing one game done right at one time. That formula has been wildly profitable for them, and I kind of shudder over the idea that they would change that and start crapping out games left and right. We already have video game mills, and they aren't exactly beloved (EA.) Blizzard has its faults, but this isn't one of them,and I am just as anxious as everybody to get my hands on SC2 and D3.

mietha
mietha

They are bringing in, on the low end, 3-4 million dollars. First off, I call BS. Secondly, if they can't run a con for 3 million dollars, they are losing money by design, not necessity. They just want something else to whine about. Boo hoo, poor us. "Substantial loss" my ass.

franwex
franwex

The reason why Blizzard games take so long is because they have small development teams, with pretty much unlimited budget. A smaller team is easier to oversee and they can also add more details and fine tune games. Really, what makes Blizzard games fun is the small details and their OCD like polish.

sirkel28
sirkel28

Yeah whatever, they make $15 times 11 million subscribers a month plus they still charge for expansion packs and they can't manage to make money, ookaay!?

clqtte
clqtte

The queen of Zerg might bring more money to Blizzar? I consider. They should spend more time to finish their games...

breakitapart
breakitapart

Since when did the Government start to run BlizzCon?! :)

Lucidmike78
Lucidmike78

Well, considering they have been raking in 100+ million dollars a month since the launch of WOW, they can afford it. And its not like this money is going to waste. It's just marketing dollars that will encourage users to keep playing. Its like Microsoft saying a billion dollar donation to fight world hunger is a substantial loss for them. I'm sure that money comes back to them eventually a few times over. In the end, people that would have normally gone without food or a free concert all benefit. =)

carmig
carmig

Who cares?! Then dump BlizzCon! I play the games for their merit alone, not because Blizzard throws a party. I'd rather Blizzard gets off their butt and gets Diablo III finished and distributed anyway! How much friggen longer?

prioritymail
prioritymail

They treat their fans pretty well to want to lose money on this every year

HenriKFM
HenriKFM

So it's obvious: BlizzCon's main purpose is publicity.

jmrwacko
jmrwacko

People are all buying into the hype that Blizzard really cares about its customers, but if they really wanted to invigorate the game market they would put more games, and a wider variety of games, into development. They certainly have the resources to work on more than three games, not to mention that Activision-Blizzard is its own producer. Why no Starcraft-based FPS? Why no Warcraft IV? Why no WoW II; only WoW expansions? I still am under the deep impression that Blizzard is succumbing to its own gluttony after discovering their MMO cash cow.