Blizzard incurs 'substantial loss' from BlizzCon

By Tor Thorsen, GameSpotPosted Sep 17, 2009 5:08 pm PT

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.

158 Comments

  • BurningUp99

    Posted Dec 8, 2009 12:47 pm PT

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

  • AzatiS

    Posted Oct 25, 2009 2:34 am PT

    ""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 ...

  • bigZmanship

    Posted Oct 14, 2009 5:24 am PT

    eve > wow

    go.

  • iRevive

    Posted Oct 12, 2009 7:43 am PT

    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

    Posted Oct 6, 2009 9:43 am PT

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

  • KBFTodd

    Posted Oct 2, 2009 4:31 pm PT

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

  • JakeYourself

    Posted Sep 26, 2009 11:38 am PT

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

  • DarkKnight414

    Posted Sep 22, 2009 11:49 am PT

    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

    Posted Sep 21, 2009 9:57 pm PT

    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

    Posted Sep 20, 2009 8:01 pm PT

    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

    Posted Sep 20, 2009 7:52 pm PT

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

  • Deathscyth-Hell posted Sep 20, 2009 7:16 pm PT (does not meet display criteria. sign in to show)

    Deathscyth-Hell

    Posted Sep 20, 2009 7:16 pm PT (hide)

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

  • Lach0121

    Posted Sep 20, 2009 10:45 am PT

    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

    Posted Sep 20, 2009 10:10 am PT

    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

    Posted Sep 20, 2009 7:04 am PT

    " 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

    Posted Sep 20, 2009 7:02 am PT

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

  • hannify

    Posted Sep 20, 2009 5:56 am PT

    they are owned by activision which are the biggest now so a loss to them is meaningless

  • bennae66

    Posted Sep 19, 2009 11:35 pm PT

    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

    Posted Sep 19, 2009 6:22 pm PT

    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

    Posted Sep 19, 2009 1:29 pm PT

    nek je vala kad su im igre ka karina zadnjih godina

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