AGDC '07: Blizzard president Mike Morhaime

AUSTIN, Texas--Earlier today, Blizzard president Mike Morhaime kicked off the Austin Game Developers Conference with a keynote address discussing the business behind the massively multiplayer online role-playing game World of Warcraft.

With more than 9 million subscribers worldwide, the game far outstripped the company's expectations. As Morhaime explained, that success brought with it some unique problems. For example, when the game launched, Blizzard had to stop sending boxed copies to retailers for a time because their servers couldn't handle any more users than were already playing.

Morhaime's keynote address also touched on a handful of larger issues in the industry, from the growing international presence in online gaming, to real-money trading of in-game items, and short shelf lives for most games. The executive sat down with GameSpot to answer a few questions on those subjects, as well as to discuss what happened with the company's aborted return to consoles, whether the success of World of Warcraft could serve to keep a Starcraft MMOG on the back burner, and how it's dealing with Warcraft's big-screen adaptation.

GS: In your presentation, you talked about the Super Nintendo Entertainment System racing game RPM Racing, but didn't mention it by name. I've noticed I don't see much beyond World of Warcraft, Starcraft, Diablo, and Warcraft associated with the Blizzard name anymore.

MM: When we first started, our initial name was Silicon and Synapse. We kept that name for a few years, and then decided to change it because it was high concept. Nobody really understood what it meant. So we changed the name to Chaos Studios. Then we found out someone was using the name Chaos Technologies, and they wanted six figures for us to continue using it. So we picked something different, and that's when we switched to Blizzard, which was about the same time we started self-publishing our titles like Warcraft: Orcs and Humans. The console games weren't published under the Blizzard brand, which is why you don't associate them with Blizzard. A few years back, we ended up approaching Interplay and buying the rights to all our earlier Interplay titles. So we do own the rights and did release some of them as Game Boy titles.

GS: Do you think titles like Lost Vikings, Blackthorne, and Justice League Task Force count as brand withdrawals?

MM: I think if we were to do them today, they might. But back then, most of them were actually pretty good titles. RPM Racing is probably an exception to that. We weren't particularly proud of the title, and we banged it out pretty quick.

GS: That was how you guys started, three guys and $20,000. You didn't have a lot of leverage with publishers back then. Now, a lot of the AGDC panels and talks here touch on the issue of how independent or unknown developers can get much-needed attention for their projects. Having come from that bootstraps startup position yourself, how is a startup these days with little funding and no leverage over publishers supposed to break through into the big time?

MM: I think that there are some opportunities now that didn't exist a few years ago. You've got platforms like Xbox Live Arcade, and maybe even portable games. Games don't have to be big anymore, so you've got a market for smaller games where you can focus just on gameplay and putting out something great without a team of 50 people. And you can use those types of things to build your development capabilities.

GS: You also said that Blizzard wasn't prepared for the success of World of Warcraft, at least not on the scope that it had achieved. If WOW hadn't been a hit, what was the company's plan B?

MM: I don't think there was any doubt that we had a hit. It's just that we didn't expect it to be such a big hit so soon. If it sold reasonably well, it was still going to be a successful title for us.

GS: Does the overwhelming success of it mean that a hypothetical Starcraft MMOG would be pushed further out because you have this thriving community that you don't want to cannibalize?

MM: Not necessarily. It's actually more a question of us not wanting to cannibalize the resources that are going into supporting the game. We can't just take the World of Warcraft team and have them work on another game. But what we can do is staff up the World of Warcraft team and gradually peel off some of our developers to start working on something new. But it will take time. And we're at the stage right now where we're starting to think about what we want to do next.

GS: When do you think you'll want to talk about what you're doing next?

MM: Probably not for a long time.

GS: You mentioned that Burning Crusade and Diablo both missed the holiday-release window, but both were successful despite that. There's always been this huge buildup of blockbuster titles in the fourth quarter, and a lot of analysts think it still is a seasonal market. In your opinion, is gaming something that can thrive 12 months a year, or does the industry still pigeonhole itself into the holiday market?

MM: I think yes and yes. I agree with all of that. I think it's still a seasonal market, and if you look at the numbers, you'll see that. There is a lift you get from being on the shelves in the fourth quarter. But I think even more important than that is the quality of the games, and the ones that just aren't that good don't have the shelf life of the ones that are. And if you're sacrificing your shelf life for your seasonal lift, I don't think it [pans] out. It's hard to prove that, though, because you can't do both things with one title.

GS: You talked about how the most important quarter for a publicly traded company is the current quarter, and the reward for exceeding expectations seems to be nothing but higher expectations. Given the explosive growth of World of Warcraft, is there any way you can match that same exponential curve, or do you have to keep expectations grounded?

MM: We do try to keep our expectations conservative. We've always done that. We try not to forecast for our best possible scenarios. We try to be conservative and cautious, but I still think there's a lot of potential in the online games market. I think that there are a lot of international markets that haven't come online yet. There's a lot more we can do with World of Warcraft to keep the game fresh and interesting. Also, we are working on other titles like Starcraft 2, and we have other things planned that I'm not able to talk about.

GS: Talking about the international market, we've seen a lot of games that are huge hits like Lineage and Lineage II in Korea, but when they are brought to other markets, they don't succeed as much. In your keynote, you said Blizzard advocates one game with styles of play that appeal to each region. That can't be a one-size-fits-all solution, can it? Certainly there are successes that need to be tailored specifically to a region.

MM: That's true. That's just not our approach.

GS: Do you ever worry about a jack-of-all-trades approach that shortchanges the game's potential?

MM: No, because I also talked about sometimes when you make certain design decisions, that sometimes there is a superior approach. So we're not talking about decisions that create an inferior game. We're talking about decisions that actually make the game better.

GS: Can you give an example?

MM: An example would be with Starcraft and Warcraft III--even World of Warcraft, I guess, would qualify for this. Our games work very well in game rooms (Internet cafes) now because we know that there are game rooms. But even before that, they worked very well in game rooms because we considered the fact that you might want to share the game with your family. One copy of the game, one system, four different people playing it. We designed the game to work well in that environment, so you can each have your own profile and be in different places in the single-player campaign. That allowed us to be a very well-behaved game-room game. That's just being aware that different people are going to be enjoying your game differently.

GS: It's amazing that Starcraft is still unavailable in a Korean-language edition. Will Starcraft II have a Korean language version?

MM: [Laughs.] Absolutely.

GS: The out-of-game market exists because players in the game feel that whatever it is they're looking to buy is really worth real money to them. Whether they bought it or earned it, they feel it has value. How do you take the value out of it for the gold farmers but leave the players feeling that all of their gear and their gold is valuable?

MM: It's challenging. We monitor these activities, and at some point, the amount of time they have to spend to get these items and transfer them to another WOW player becomes too much, and it's just no longer worth their time. And there are certain things in the game that were designed to make it less desirable. For instance, a lot of the best items in the game are soul-bound and can't be transferred player to player.

GS: How often do you get asked about Starcraft: Ghost?

MM: Pretty often.

GS: What happened with Starcraft: Ghost?

MM: We were late to market with a game that was not shaping up to be competitive to some of the other top games that were coming out. We looked at it and realized that there was an awful lot of work we needed to do. Our window was closing on the older-generation platforms, so we had to make a decision whether we would basically take what we'd done onto the next generation of hardware and start from scratch. Ideally, we wanted to release Ghost on the older generation and have our sequel come out on next-generation systems. And then we looked at all the resource needs we had on the PC side of the business with World of Warcraft and our other titles, and we just decided that the resources were spent better on focusing our efforts on our PC titles, so we put Ghost on indefinite hold.

GS: Is cracking back into the console market still on the company's list of objectives?

MM: It is not.

GS: Why was the console market worth getting into in the last generation, but now you're backing away from it?

MM: We thought we would be able to do it without impacting our PC teams. We just had to make a priority call when it became clear that we were getting late to the market with these things, and we were not creating something that would live up to the Blizzard quality I've been talking about without additional resources. Now it's pretty clear that we really could use those resources helping us out on World of Warcraft and other things. Ideally, you try to do everything, but one of my points this morning was about not trying to do everything at the same time and focusing on what's important. And that's what we did.

GS: Last year it didn't seem to matter what session you went to at the Austin Game Conference, all people were talking about was World of Warcraft. Do you ever get sick of hearing about it?

MM: Nope! [Laughs.]

GS: Well, you'll enjoy the rest of your stay in Austin then, I'm sure.

MM: One thing I'm really looking forward to is our Warcraft movie, which we are in the script phase of.

GS: Are you a cinephile?

MM: Well, I love movies.

GS: That counts. When did you start to think that the games you were working on could be movies?

MM: A long time ago. We've been trying to get Hollywood interested in our games as long as I can remember, going back to the Starcraft days. We had been pitching different studios, and what we kept getting back was, "Fantasy movies don't sell." Literally, that was what they told us. We were like, "No you don't understand, we want to make a good fantasy movie. If you make a good one, people will see it."

Then Lord of the Rings came out. And it was doing great. Harry Potter, there's another one. Now they had to admit fantasy movies would sell if they were good. And they said, "Yeah, but your stuff's too similar to Lord of the Rings, and we don't want to go head-to-head with that." We said, "Well OK, they're done."

Finally we hooked up with the Legendary Pictures guys. They're very excited. They seem to get it, and they've put out some very good movies.

GS: Does it matter to you if it stars top-tier celebrities, or would you prefer they find unknowns to inherit the role?

MM: I'd like to see some names in it, but more important than that is the quality of the acting, the production, the direction, and everything.

GS: Are there any hang-ups about it being a game-based movie?

MM: Actually, one of the great things about Legendary is they don't look at it as a video game-based movie, and neither do we. They look at it as this fantasy world that happens to have some games based around it. It's a fantasy world that's strong enough to stand on its own, and it deserves a movie that's strong enough to stand on its own.

GS: Are Starcraft and Diablo strong enough worlds that they could stand on their own in movies?

MM: Absolutely.