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Two Interesting Developments

Richard Aihoshi Posted:
Columns The Free Zone 0

Although the month or two after E3 can sometimes be slower than usual in terms of news, there was still quite a bit going on in the MMOG space over the past couple of weeks. A number of items caught my attention over this span. The top two, both involving potentially intriguing changes, were Perfect World's latest western acquisition and the departure of Blizzard's Chief Creative Officer.

Perfect World to acquire Digital Extremes

Late last month, Perfect World announced it had made a non-binding offer to purchase the London ON-based studio. The wording means the deal may not go through, but I've seen or heard nothing to suggest it won't. So, I'm assuming it will happen. Warframe wasn't explicitly named, but it's hard to see the armor suit-themed free to play cooperative shooter not being included.

One of my initial reactions was to remember that Digital Extremes was a partner on the Unreal series of first-person shooters. While I'm not reading anything more than simple coincidence into it, I also noted that the other company, Epic, previously received a large Asian investment, reportedly $330 million for either 40 or 48 percent ownership. I doubt the amount involved this time is anywhere near being in this ballpark. 

Naturally, I also wonder why the deal came about. It's possible the studio was on the market because the game isn't profitable, but I hadn't seen any rumors to this effect. In either case, I'm interested in what will happen to Warframe. If I assume Perfect World believes it can succeed in the enormously competitive domestic Chinese market, it raises questions as to what changes are needed, especially any that differ from what the team has planned.

I also suspect that the company has more in mind than just continuing to operate this one title the same way Digital Extremes has since launch last spring. So, I'll be watching for signs of any larger intentions. It's still very early even to guess. But why let that stop me? Considering the studio's historical high point plus where it's at now, I'll go with a free to play squad-based online FPS incorporating some form of character persistency.

Not exactly daring, I know. If you're willing to go farther out on a limb, feel free to do so in the comments.

Rob Pardo leaving Blizzard

Late last week, the former design lead on World of Warcraft announced his departure. He said nothing about why he's leaving after 17 years, and gave no indication as to his plans except to say he's looking forward to new challenges after some family time. In any case, the speculative buzz about this news began immediately.

One line of speculation holds that he was “forced” out because of Titan. While there's no known basis to think this is so, it's also not completely implausible. The project dates back to at least 2008, possibly 2007. Indications are that it was based on a new IP. As of mid-2013, there still hadn't been sufficient progress to announce the game. And that's apparently not all. It also seems that after five-plus years, a presumably significant change of direction was deemed necessary.

So, unless Blizzard has a big surprise under wraps, it will be at least a dozen years between the launches of its first and second MMOGs. I can only wonder how much this cost in terms of unrealized revenue and profit. Hundreds of millions? More? Whatever the amount, it doesn't feel like much of a stretch to lay at least some of the responsibility for this, maybe a good-sized chunk, at the feet of the Chief Creative Officer. 

A case can also be made to factor in Diablo III. All-platform sales reportedly reached the 15 million mark earlier this year, a figure that far exceeds what the vast majority of games could even dream of. But what matters more is how it has performed relative to Activision Blizzard's (and Tencent's) internal expectations. I suspect that even if they aren't unhappy, they're also not thrilled. Furthermore, despite pretty favorable review scores, the overall reaction including players' opinions has been less than overwhelming.

As for what Pardo is likely to do next, there's certainly precedent to think he'll open a new studio. Over the years, a number of developers who held senior positions at Blizzard have done so; some familiar ones here are the three co-founders of ArenaNet and the former head of Red 5. While I'm in a speculative mood, I'll guess this will happen and that, as in both these cases, Asian money will enter the picture at some point in time.

Closing queries

What other western development studios look like candidates to be acquired by Asian publishers?

In what ways and to what degree has Perfect World's acquisition of Cryptic been beneficial and/or detrimental? Will Warframe and Digital Extremes benefit?

Why do you think Rob Pardo left Blizzard, and what's he likely to do next? 

If you controlled a cash-rich Asian publisher like Tencent or Nexon, how much would you be willing to fund Rob Pardo to start a studio and to create a new MMOG?

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Richard Aihoshi

Richard Aihoshi / Richard Aihoshi has been writing about the MMOG industry since the mid-1990s, always with a global perspective. He has observed the emergence and growth of the free to play business model from its early days in both hemispheres.