Blizzard Meltdown

We look at what's been going on at Blizzard recently and how global politics have created a challenging situation for the company.

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Episode Transcript

Speaker 1 (00:04):
Welcome to tech Stuff, a production of I Heart Radios
How Stuff Works. Hey there, and welcome to tech Stuff.
I'm your host, Jonathan Strickland. I'm an executive producer with
I Heart Radio and I love all things tech. And
we are now in the home stretch, my friends, least

(00:24):
as far as Blizzard Entertainment's story so far is concerned.
So in our last episode, which was longer for me
than for you because I had a week of vacation
between that episode and this one, I ended that episode
just as Blizzard was launching what would become one of
its major successes. In fact, it's biggest success, the m

(00:46):
m O RPG, World of Warcraft. Now, I figured before
I go on, it would help to explain what an
m m O RPG is for those of you who
may not know. So those letters stand for massively multiplayer
online role playing game. That helps break it down when
you look at it that way. It's massively multiplayer because

(01:09):
every server which you connect to over the Internet, that's
the online parts, So that part sinking care of. But
every server could have up to thousands of players on
it um. The early version of World of Warcraft had
servers that supported between around to players, at least according
to most accounts. I couldn't find an official Blizzard source

(01:30):
that nailed it down, but somewhere between players per server.
Later versions of World of Warcraft would hike that number
up further, and private servers could potentially hold more players,
but there's a diminishing returns problem because an overloaded server
would not run the game as smoothly and could have
stability issues. On top of that, Blizzard runs this game

(01:54):
on hundreds of servers, and Blizzard calls them realms, which
means you and your fellow gamers would have to choose
which one of your characters will um live on whichever
realm so as you could all play together. You know,
if you were on one realm and your friends were
in a different realm, you would be in different instances
of these fantasy worlds, so you wouldn't be able to

(02:15):
interact with each other. The worlds would all be the same,
but you wouldn't be in the same instance, so you
had to make sure you were all picking the same
server to play on. Role playing games, for their part,
they involve a player taking on the role of a character,
so to some degree you could argue that all games
in which you control some sort of avatar are a

(02:37):
type of role playing game, but stuff like simple arcade
games like you know, Mario Brothers or something, or action
adventure games like tomb Raider have some limited role playing,
but it's very limited. You're really just controlling a digital
character to maneuver through some sort of environment in those games.
Role playing games generally have you taken on more of

(02:57):
the digital avatar's actions, including stuff that isn't so pivotal,
like jumping or attacking or something. And some people take
this further than others. They will type out and chat
using character appropriate phrasing and language, and so they're actually
acting out a role. In fact, there are some servers

(03:18):
that were better known for that kind of play. Other
types of players find that kind of behavior really cringeworthy,
and they'll just chat and modern language and slang. They'll
use you know, abbreviations and stuff to communicate things quickly
to each other, using it more as a strategy game,
and looking at the game is sort of a series
of achievements to to accomplish, and not so much of

(03:41):
playing out a role. Now. I'm not saying either version
of gameplay is better or worse than the other. They're
just different and they appeal to different types of gamers.
I certainly have been the type who have enjoyed role
playing games where I play a role, But I've also
been the type who have I've seen some very awkward
examples of that, and I have wanted to avoid it,

(04:05):
So I get both schools of thought. Now, these games
typically have missions in the form of quests that are
handed out by n PC's or non player characters. These
are computer controlled characters. Players can also join with other
like minded players to form their own groups or guilds,
and they can go on coordinated missions or raids together.

(04:28):
They can also wage war against players from opposing factions.
So m m O RPGs present a real challenge to
game developers because, on the one hand, you want players
to feel as though their actions matter, and it sort
of breaks the illusion that you're inhabiting a fantasy world.
If you, for example, you just finish a quest to

(04:49):
return I don't know a frying pan to an elf,
and then that elf turns around and offers that same
lost frying pan quest to the person who's standing right
next to you in the game, that kind of breaks
the illusion because you literally just did that. But on
the other hand, you can't really let the world change
that much because not everyone in the game world would

(05:13):
be there at the same time, right, so they wouldn't
see the world change until they logged in again, and
then suddenly there would be content that would be unavailable
to them because the world had literally changed at that point.
New players should get the same chance to experience content
the way everyone else does. Now, most of the time,
m m O RPGs air on the side of making

(05:34):
sure everyone gets a chance to play the game the
same way. That means that the game world tends to
be pretty static from day to day, with some minor changes,
like World of Warcraft in particular changes throughout the year
to reflect certain seasonal things like around Halloween, you'll see
some seasonally appropriate stuff appearing in the game, but otherwise

(05:56):
the game world doesn't really change that much unless there's
a major expansion rolled out, and that is one way
that game developers can make big changes to the world.
They can release expansion packs. World of Warcraft has done
this multiple times, and in some cases has made truly
dramatic changes to the online world in the process. The

(06:18):
mythical World and World of Warcraft is called as a roth,
and the game's events generally take place a few years
after the events that were depicted in the real time
strategy game Warcraft three, So that story ends and then
you typically here that four years later you've got the
events of World of Warcraft. Early on, when the game

(06:38):
was first released, players had access to two continents that
they could explore, but later expansion packs increase the game
areas dramatically and then transformed some of the existing ones
quite extensively. Players could choose to play as one of
several races of beings, which in turn determined which faction
they belonged to. So in the original game, you could

(07:00):
be human dwarf or a night elf uh or Gnome
and that represented the Alliance faction. Or you could play
as an orc, a troll, a turn which is a
humanoid with bull like features, sort of like a minotaur
uh and the or minatar if you prefer, and or
the Forsaken, which were a race of undead creatures. They

(07:22):
made up a faction called the Horde, and they still do.
The choice of Alliance versus Hoarde determines lots of stuff,
not just who your allies are and who your enemies are,
but also which areas of the map you are able
to explore, and which quests will be available to you,
and which bits of lore you will encounter as you
play through the game. Later expansion packs would increase the

(07:43):
number of races players would have access to, as well
as the types of classes you could play, so not
just your race, you also have to determine what class
you are. This is sort of like what type or
occupation your character has, so a player of either faction
could become either a druid, a hunter, a major, a priest,

(08:06):
a rogue, a warlock, or a warrior. And in addition,
alliance players could be a paladin and Hoarde players could
be a shaman. Again, later expansion packs would increase the
number of playable classes, so for a monthly fee, players
can create a character and go on quests throughout a
persistent online world. They can form alliances with other players,

(08:28):
and they can unlock the somewhat complicated and frankly confusing
story of asar Roth. Now I say confusing only because
I never really got into these games, so I didn't
get an introduction, and by now the lore is so
deep that I can't really suss out what it means.

(08:48):
Blizzard executives hope that the company would be able to
sell around four hundred thousand copies of the game within
its first year of release. They thought, if we can
sell four hundred thousand copies in the United States eights,
then this will be a viable business and we can
run the game. They actually managed to hit four hundred
thousand copies within the first month. That far outperformed their hopes.

(09:13):
Of course, that also meant that they had to quickly
ramp up more servers to host games because they were
starting to fill up to capacity pretty quickly. That's not
a bad problem to have, except in those cases where
players who were joining the game relatively late, we're having
trouble linking up with friends because their friends were on
more crowded servers and there was no availability for them

(09:34):
to log into those same servers. The later expansions, by
the way, include here are all the names. The Burning Crusade,
Wreath of the Lynch King Cataclysm. That's the one that
really dramatically changed the online world and made new areas
accessible while eliminating some traditional areas in the base game.
Mists of Pandaria, Warlords of dran Our Legion, Battle of Azaroth,

(10:00):
and then there's the upcoming shadow Lands expansion. I'm not
going to go into all of these because honestly, I
could do a full episode just dedicated to World of
Warcraft and all these different expansions, but that's really going
too far. But this was generally away for Blizzard Entertainment
to provide ongoing content for dedicated players who might otherwise

(10:20):
have experienced pretty much everything the base game had to offer.
I mean, if you have advanced your character to as
maximum a level as is allowable in the game, and
you've pretty much explored the whole world, you might not
have any reason to keep playing that game. And this
is one of the major differences between an m m
O RPG and a standalone game, right because with a

(10:42):
traditional standalone game, the old style standalone games, you would
go out and purchase the game and that would be it.
You would play the game, and you play it as
long as you wanted, and maybe you finish it, maybe
you don't, whatever, but you've already purchased it. You've you've
laid down your money, and that is the end of
the revenue stream in that traditional app coach. Companies like
Blizzard began to develop expansion titles to generate additional revenue. Right,

(11:05):
you would expand the base game, and typically those expansions
required the player to own the original copy of the
game itself. So in those cases, you would sell the
base game to players. They hopefully love the game, they
want more of it, So you create an expansion that
keeps those players happy. They stay in the game world
they love, and they get to play more content, and

(11:28):
they buy the expansion. That's the most important part. They
put down new money to keep playing the game they've
already played. Plus you might even attract new players to
your game. But those folks have to buy both the
expansion and the original game if they want to get
all the content. They can't just buy the expansion because
the expansion is built on top of the existing game.

(11:49):
So with an m m O RPG, you also have
a monthly subscription fee, and that is a healthy stream
of revenue coming into the company. At its peak, World
of Warcraft had about twelve million active player accounts around
the world. When it originally launched, the base game of
World of Warcraft cost about fifty dollars, and there was

(12:11):
also a collector's edition if you wanted to pony up
eighty bucks a princely Some either version of those games
included a one month subscription, but after that month you
would have to subscribe at one of three plans. The
month to month plan, where you're just paying for each
month of service as you're playing, was fifteen dollars every month.

(12:33):
A three month package would knock that down to being
equivalent to about fourteen dollars per month, and if you
committed to six months of a package it would be
it would even out to more like thirteen dollars per month.
So you know, you buy in bulk and you save money.
I guess. The game was a huge hit, and so
every month those subscriptions were rolling in as additional revenue.

(12:57):
But it was also clear that Blizzard would need to
keep adding or content to keep the players engaged or
else they were likely to become bored and disenchanted and
walk away once their subscription lapsed, and that's where those
expansions came in. The first one, the Burning Crusade, launched
three years after the base game it launched in two
thousand seven. Blizzard had announced it way back in October

(13:19):
two thousand five and intended to launch it earlier, but
as is the case with Blizzard, they wanted to make
sure that the expansion was absolutely as good as it
could be before they pushed it out the door, so
they delayed its launch in order to make sure that
it was right. This is one of those things about
Blizzard that becomes like a an ongoing thing with that company.

(13:41):
They frequently would delay launches in order to try and
get something just right, and I think more often than
not that ended up benefiting the company, because while it
is frustrating to see a launch date get pushed back,
it's way more frustrated to get a broken game and
have to wait for something to get patch so it's playable.

(14:02):
The expansion, The Burning Crusade, sold two point four million
copies in the first twenty four hours. Not keep in
mind the original game sold four hundred thousand copies in
the first month. This expansion sold two point four million
copies in twenty four hours. It broke PC game sale
records back in uh those days, so it was the

(14:23):
fastest selling PC game at that time. Now, like the
base game, players would have to cough up some dough
to buy this expansion pack like thirty bucks, and then
they would also then have to maintain their subscription to
continue playing the game. In two thousand and eleven, Blizzard
chose to roll in all the content from the Burning
Crusade into the base game, so if you went and

(14:45):
bought World of Warcraft from two thousand eleven on, the
Burning Crusade was included with it, you wouldn't have to
go out and purchase the expansion pack, and this would
be the start of a trend that the company would
follow over time, leading up to the present practice where
the base game includes all of the previous expansion packs
except for whatever is the most recent one, and that

(15:06):
one you would have to purchase to get access to that,
but everything else would already be included in the base game.
In two thousand eighteen, the company also made the base
game free to all players, so you don't even have
to buy World of Warcraft anymore. You can play the
game for free, or at least you can get access
to the game for free, but you have to pay
for the monthly subscription so that you can actually continue

(15:27):
to play the game. So if you wanted to play
World of Warcraft right now, you would not have to
buy the base game. You would just have to pay
for the monthly subscription to be able to do so.
Blizzard also let players advance up to level twenty without
having to subscribe to the game, giving players a taste,
maybe just enough to get hooked before the players would
hit a level cap that they could not go beyond

(15:49):
without subscribing to the full game. Another thing Blizzard introduced
in World of Warcraft were micro transactions, which really got
started back in two thousand nine. The company allowed players
to spend real world money, you know, cash money, to
buy in game pets for their characters, and the pets

(16:09):
were cosmetic additions that meant that they didn't change the
game play at all. They didn't give advantages to players.
They're just sort of cute additions to the game. And
this was when a player could opt to have a
Pandaran monk with a Pandaran is sort of an anthropomorphic panda.
You could have that as a pet, which is a
bit weird because later on, in another expansion, The Mists

(16:31):
of Pandaria, you could play as a Pandaran. Yikes. Later on,
Blizzard would introduce many other potential micro transactions, and the
company didn't do this, you know, universally. Uh, some in
game items were only sold in certain markets, such as Asia.
Asia had consumables in World of Warcraft that they could purchase,

(16:55):
but in other markets that was not an option. So
it Blizzard was kind of weighing out where these strategies
would work best, and uh, you know, maximizing that revenue
the expansion packs and micro transactions would become an enormous
sea change in the world of video games. Developing games

(17:15):
is expensive. One estimate for the cost of developing World
of Warcraft, the base game of World of Warcraft was
around sixty five million dollars to develop that game, and
of course, businesses exist in order to create profits, so
business owners are always interested in finding new ways to
generate streams of revenue. When it's done well, then it

(17:35):
can enhance the experience of a game, and players typically
are are happy to get more of what they love.
When it's done poorly, it creates a sense that you
have to pay to win the game, and that players
who have more cash to burn end up with an
unfair advantage over everyone else who might really be into
the game, but they might not have the spare change

(17:58):
to buy all the do Dads and nick next. Interestingly,
this tied back to an idea that the original Diablo
team had if you remember from my previous episodes, and
that concept players would end up buying a physical CD
that would contain in game items that they could use
to enhance their characters, like weapons and armor and that
kind of stuff. This was early enough that delivering stuff

(18:22):
digitally online wasn't as popular as using physical media. People
still went out and bought CDs, and some people still do,
but it's increasingly rare and now it's almost all digital delivery. Well. Ultimately,
the Diablo team did not pursue that strategy, which was
probably for the best, since the rampant cheating in that
game would have made that additional material moot Anyway. Recently,

(18:46):
Blizzard Entertainment released World of Warcraft Classic, which updates many
things about the original game, but brings back the game
world and the quests the players could find if they
had logged in way back in two thousand four when
the game for launched. The version of World Warcraft UH
is now running parallel to, but but separate from, the

(19:07):
ongoing official World of Warcraft game that has evolved over
the course of all those expansion sets. So now you've
got two flavors of World of Warcraft. You've got the
one that has evolved over the time since two thousand
four with all those expansion packs, and you have World
of Warcraft Classic. That is the way the game came
out originally, with some enhancements thrown in, and it's a

(19:29):
nod to those loyal fans of the series who missed
the good old days of the original World of Warcraft.
The games subscription fees and the number of active players
means that a rough estimate of the revenue generated by
this game is at its peak around a billion dollars
per year, which is crazy. Uh. That number has fluctuated
over time. It peaked at twelve million, and it went

(19:52):
into decline afterward, but it's still an incredibly popular M
M O RPG and still a healthy moneymaker for Blizzard.
All right. So that's our basic rundown on World of Warcraft.
And of course we could spend a lot more time
going over all of the details, but instead I'm going
to take a quick break and then get back to

(20:12):
what was happening to the company in general over the
last decade or so. So let's take a quick break.
The enormous early success of World of Warcraft had a
downside because it meant that projects like StarCraft two and

(20:35):
Diablo three would actually receive less attention so that Blizzard
could cater to the Wow community World of Warcraft community. Then,
if you listen to my last episode, you know that
two major camps from Blizzard North that was the team
responsible for creating Diablo and Diablo two. Two camps had

(20:57):
split off from Blizzard North to form new video game
development studios, and that left the Blizzard North team severely
understaffed and without key leadership. Diablo three, as a result,
was floundering in development. The art design was stuck at
least a generation behind, the team was having trouble creating
a good game, and Blizzards new owner Vivendi was still

(21:21):
kind of a scary shadow over the whole company. So ultimately,
the leaders at Blizzards South decided that to make games
up to the standards of Blizzard, they needed to be
able to oversee the whole process that and they couldn't
really do that from southern California for a team that
was located in the Bay Area in northern California. This

(21:43):
is exactly the kind of thing that Blizzard North was
trying to protect itself from in its early days. And
so with all those considerations, Blizzard South decided to shut
down Blizzard North, and that was the branch that had
formerly been known as on Door. So Blizzard South offered
jobs to the team's up at Blizzard North. They said,

(22:06):
you can still work for Blizzard, but to do it,
you're gonna have to move down to southern California. So
some people, but not everybody, took them up on that offer.
So that meant that it would almost be an entirely
new team working on Diablo three, and as part of that,
they decided to start over from scratch, so that's set

(22:26):
that project back considerably. In October two thousand five, Blizzard
hosted the first blizz Con in Anaheim, California. This was
a convention for fans of the company's games, so attendees
got early looks at games and development, including StarCraft Ghost,
which would ultimately be canceled, so some people got a
chance to kind of get some hands on time with

(22:48):
early builds of games that just never came out. They
attended presentations that were given by Blizzard employees about the
games and the lore around the games, the art design,
all that kind of stuff, and the company would hold
another one in two thousand seven. So between two thousand
and five and two thousand seven was the year. Two
thousand and six. There was no blizz Con that year,

(23:09):
but from two thousand seven onward it would become an
annual event. It became so popular and so useful that
eventually Blizzard decided that in two thousand nine it wouldn't
go to E three anymore. It didn't need to because
it had its own promotional event with a very engaged
group of of users. The community of Blizzard was really

(23:30):
passionate about this, so why would they go to E
three where they would just be another company competing for
attention from press and retailers. And we've seen other companies
follow blizzards lead, and many of them now hold their
own events and either they also attend E three or
they skip E three entirely. Uh. Their events tend to

(23:52):
be a little less elaborate than blizz Con tends to be,
so they don't tend to be full on conferences the
way blizz Con is, but they are similar in effect,
and that it's a company holding its own event on
its own terms instead of sticking with the three. In
two thousand six, the year without a blizz Con, Blizzard

(24:13):
made another big announcement. The studio revealed that it had
entered into a project with the movie studio Legendary Pictures
for the purposes of developing a Warcraft motion picture. Now,
the original plan was to script and shoot a movie
in time for a two thousand nine release, and this

(24:33):
whole move to doing a film wasn't that surprising because
since two thousand Blizzard had been publishing novels that were
set in the Warcraft universe, and they were also exploring
opportunities and other media like comic books. So the original
plan was that Sam Ramy, who had just recently finished
directing Spider Man two, to come over and direct the

(24:54):
Warcraft movie. However, like some other Blizzard projects, this one
hit more than a few snags in development and would
not launch in two thousand nine. There were issues with
the script and there was a real struggle to turn
the film into something other than just another generic fantasy epic.
The Lord of the Rings films had set a pretty

(25:15):
high bar, and there was a real danger of being
viewed as sort of a copycat of that franchise. So
as time went on, Sam Raimi would leave the project
to pursue other opportunities, and Duncan Jones, the son of
David Bowie, signed on to direct the Warcraft movie. Jones
worked with Blizzard to create a new script, reportedly because

(25:35):
he felt that the initial draft fell into the cliche
of humans are the good guys Orcs are the bad guys,
and they fight. He wanted there to be more ambiguity
in the story and for both sides to have motivations
that the audience could get behind. Actually, ultimately some critics
would say that the Orcs got a much deeper presentation

(25:58):
than the humans did, and so almost aired on the
flip side of what Jones was concerned about. Now, all
of this meant that the movies released was delayed multiple times.
It missed the initial plan to premiere in two thousand nine,
it missed another date in two thousand and eleven, and
Blizzard remained tight lipped about the film for a good
long while. Like after they announced it, they didn't really

(26:20):
talk about it so much. But while progress was slow
and intermittent, it was at least happening, and in two
thousand sixteen, the movie was finally ready for audiences, a
decade after it's been announced, and a hundred sixty million
dollars reportedly for the budget. It's global box office got

(26:42):
a little close to half a billion dollars, but it
was still largely viewed as a commercial failure. It actually
made less than fifty million dollars in the United States. Now,
I cannot comment on the quality of the movie because
I never saw it, But on rotten Tomatoes it has
a twenty eight percent approval rating, meaning it's a rotten film.

(27:04):
But just a quick reminder for you guys, on rotten
Tomatoes does not mean that the movie is way worse
than say, a different movie that got a forty percent rating,
because the percentage doesn't actually tell you how good or
bad a film is. Rather, it tells you the percentage
of critics who gave the film either a positive or

(27:26):
a negative review. And these are critics that Rotten Tomatoes
recognizes as legitimate critics, So it's not all critics, it's
a selection of them, And it's really more like saying
around thirty of the critics who reviewed the film gave
it a mediocre to positive response, but it doesn't necessarily
mean that the movie is objectively better or worse than

(27:48):
other movies that have similar scores, or even scores that
are slightly higher slightly lower. Also, I should add that
the audience score for the film is much higher at
seventy six percent. So the critics weren't thrilled with it,
but you know, audiences seemed to be more positive about
the whole thing. Now, considering Blizzard Entertainment's reputation for highly

(28:10):
produced cut scenes and video games, some of which featured
animation that could easily rival that of the c g
I you found in feature films, I'm sure this came
as a major disappointment to the company. It's still exceeded
the performance of most other video game film adaptations, but
that bar wasn't set terribly high to begin with. I mean,

(28:33):
just watch the Super Mario Brothers movie, so maybe that
wasn't such a stretch goal. The critical consensus was that
the movie was just too deeply mired in mythology that
might be familiar to hardcore warcraft players but not to
anyone else, and so there are entire sequences that were
inscrutable and absurd to someone just viewing the material. For

(28:53):
the first time. While Duncan Jones expressed a desire to
continue the storyline in two thousand eighteen, he we did
that such a possibility was at best unlikely. Okay, so
let's rewind again to two thousand seven, and you may
wonder why I'm not talking about other games that Blizzard
was making right now. That's because Blizzard was really dedicating

(29:15):
the vast majority of its focus on World of Warcraft,
which again makes sense when you realize how that game
was responsible for the financial performance of the company overall.
So two thousand seven would be a really big year
for Blizzard. Part of that was because they launched the
Burning Crusade, which was the World of Warcraft first expansion
pack that year. Another reason was that the World of

(29:38):
Warcraft game would hit eight point five million subscribers, big milestone.
Blizzard also announced that StarCraft two would officially become a
thing in two thousand seven, and they did that during
their third Worldwide Invitational event, as an event that takes
place in South Korea, where StarCraft competition is huge. But

(30:00):
above all of that was another big corporate move outside
of Blizzards direct control. So Vivendi, the parent company, announced
that it was going into a merger deal with the
video game company Activision, and that would happen towards the
end of two thousand seven when they announced this. The
actual acquisition happened into two thousand eight. So Activision and

(30:21):
Vivindi Games, the division of Vindy that was all about games. Obviously,
they would come together and they would form a new
kind of parent company, publishing company really, and it was
going to be called Activision Blizzard, non Activision Vivendi Activision Blizzard.
That's how much clout Blizzard had. They could demand that

(30:42):
their name would get equal billing with Activision. So this
new company would still trade on the Nasdaq Stock Exchange
under the Activision ticker of a t v I, and
the merger would make Activision Blizzard the world's largest video
game publisher. Activision was writing high at that time from
the release of Call of Duty for Modern Warfare. Vivendi

(31:04):
Games was enjoying the tremendous financial success of World of Warcraft,
and the company, Vivendi Games had a value of eight
point one billion dollars at that time, and according to
UH a lot of sources, they would contribute about one
point seven billion dollars towards this acquisition deal. So when
you lump that cash offering along with the value of

(31:27):
the company, that comes up to nine point eight billion dollars.
That's a lot of cheddar right there, A princely some
if ever there was one. In return, Vivendi would get
a fifty two steak in Activision Blizzard. Activisions CEO, a
guy named Bobby Kodik would head up the new company,

(31:47):
and the two companies completed the acquisition. As I said
in two thousand eight, now skipping ahead a bit just
to stick with this particular part of the story. About
six years later, Codek would lead an investment group to
purchase most of the fifty of the ownership from the Vindy,
and they did it with an offer of eight point
two billion dollars. Now, remember Vivendi Games when it went

(32:10):
into this acquisition was worth eight point one So they
offer eight point two billion dollars and buy back most
of that steak. The Vendi would still hold on to
a little bit more of its ownership of Activision Blizzard,
but it did divest itself of those shares in two
future transactions. One happened in two thousand fourteen and one

(32:31):
for two thousand sixteen, and together they accounted for about
two billion dollars combined um, which I realized I just
said in a redundant and repetitive way. I just want
to reiterate that, as Brendan Sinclair of Games Industry dot
Biz would observe, that would mean that the Vendi itself
would effectively hand over nine point eight billion dollars that

(32:55):
would be the value of the company and the cash
they paid during the acquisition, and in return ten years
later it would net ten point one five billion dollars.
That's a net gain of around three hundred fifty million bucks,
which is a princely sum, but it represents just a
three point five percent gain in value over a decade,
Whereas if you had just purchased shares in the company

(33:18):
back when the acquisition happened and sat on them and
then sold them when Vivendi sold off the final shares,
you would have seen a return of three hundred sixties
seven percent. So not a great move on Vivindy's part.
They made this decision, by the way, because the company, Vivendi,
was in thirteen billion dollars of debt around that time,
so they needed to be able to sell off assets

(33:42):
in order to settle some of that debt. Now, granted,
none of that is really a concern for Blizzard the
video game development company. It was more of a questionable
mark on Blizzards parent company and the decisions of its
executive team, up being Vindi Games. As for Blizzard, the

(34:03):
company was able to operate almost as if it were
an independent studio even under this merger because the revenue
was bringing in made it an incredibly valuable asset, so
it just made sense not to mess with it too much.
So while Activision Blizzard would publish the games, Blizzard the

(34:23):
development company, because it's a different thing, would otherwise operate
without too much interference from anyone higher up on the chain,
at least for the time being, because Blizzard had that
much clout. In two thousand and eight, it was more Warcraft,
with music from the game's becoming tracks on iTunes and
the second expansion for Wow, that being Wrath of the

(34:44):
lich King that launched at the end of two thousand eight,
and like its predecessor, the expansion pack broke PC sales
records for most copies sold within twenty four hours, and
around that time, while hit a subscription base of eleven
million players almost at its peak. Blizzard would not release
another title until and that's when StarCraft two Wings of

(35:08):
Liberty finally came out, twelve years after the original title
had published way back in now. Along with the game,
Blizzard released an updated version of its battle Net service. Eventually,
Blizzard would update battle nets so that it was sort
of a universal log in for all Blizzard games, including

(35:29):
World of Warcraft. Eager gamers Zurg rushed the stores to
get their copies of StarCraft two. Oh and you know what,
I never even talked about the Zurg rush and the
previous episode, but I guess I should because it's a
meme that goes beyond the games itself. So here we go.
So in the StarCraft games, one of the three faction

(35:49):
or races that you can control as a player are
an insectoid race called the Zerg z e r G.
An early unit that you can produce with the Zurg
are these zurg Lings, which are not terribly powerful, but
if you're fast, if you're really a fast player, you
can produce a whole bunch of them early on in
the game. So there's a tactic that was really developed

(36:12):
in South Korea where StarCraft is a popular sport, and
that tactic is to produce as many Zurglings as you
possibly can early in the game, and then you send
them to overwhelm and wipe out an opponent while your
opponent is still just getting set up. It's called a
zerg rush. Also in the lore is that Korean players

(36:33):
who use this tactic would end up responding to opponents.
Their opponents would cry out an alarm, they say, oh
my god, zurg rush, and the South Koreans would respond
with key ki ki k e k e k e.
That's similar to how you would write l O l
O l L, you know, laugh out loud, over and
over lola la la uh. And it was meant to

(36:54):
convey a kind of mischievous chuckle. The meme got popular
enough for Google to use it in an Easter egg
in two thousand twelve. And if you search the term
zerg rush and Google to get a little playable game
in which lower case oh letters start to come out
and destroy all your search results. It's adorable anyway. The
general reception was that StarCraft two was more than worth

(37:17):
the weight it delivered upon its promise. The game was
set just a few years after the events of the
StarCraft brood War expansion packs, So even though the actual
game came out twelve years later, it was set four
years later. It would be followed by three expansion packs
of its own, the first two of which gave more

(37:38):
in depth treatment to one of the three factions in
the game. The Human faction was actually taken care of
in the initial release of the base game, which, you know.
Typical critics loved the game. They said it was one
of the best RTS titles for the PC. Ever. Now,
when we come back, I'm going to catch you up
on what's been going on since StarCraft two with Blizzard Entertainment.

(37:59):
But first let's take another quick break. StarCraft two debuted
in mid Blizzard Entertainment put out another expansion for World
of Warcraft in eleven, but otherwise no new titles in
Blizzard published Diablo three to great anticipation, and once again

(38:23):
the company saw one of its titles break records for
the most copies sold within twenty four hours. Now, as
I mentioned earlier, this version of Diablo three was different
from what the creators of Diablo had originally intended. The
leaders behind the Diablo franchise had not been part of
Blizzard since two thousand three, when they all left in

(38:44):
mass and UH and Blizzard North, the studio that had
actually developed Diablo and Diablo two ceased to exist in
two thousand five. So the team that built Diablo three
included some folks who were famous for working on other
big games for different companies. For example, Leonard Boyarski, who
worked as a head designer on the game, had been

(39:05):
one of the original creators for the game series Fallout.
And there was also j Wilson, who worked on titles
like Company of Heroes and Warhammer for d K, and
he served as the lead designer for Diablo three. In
some ways, the game was very similar to previous versions
of Diablo. It had an emphasis on loot to boost
a player's abilities and stats. It used an overhead view

(39:28):
that was similar to the isometric view that Diablo and
Diablo two used. It also had some new things like
destructible environments where you could have certain effects that actually
would affect the environment you were in. That was new.
All the other environments and Diablo and Diablo two, although
they were randomly generated, were largely static, so that was

(39:48):
kind of cool. Um this was done. It was made
possible by the fact that Blizzard was using its own
proprietary engine that had been built out of a previously
established game engine. One thing that Diablo three had that
did not excite people too much was a requirement for
all gamers, which was, if you want to play the game,
you had to have a persistent online connection. Even if

(40:11):
you were only playing as a single player. So you're
playing a single player game, the game exists on your computer,
you still had to have a persistent Internet connection to
Blizzards servers. UH. This was a DRM feature. DRM stands
for Digital Rights Management. It was meant to ensure that

(40:31):
the people who were playing the game, we're using authorized
copies of the game, because Blizzard had seen many of
its titles pirated. StarCraft two in particular, had a huge
problem with people pirating the game. So this was a
way to make sure that the people who were playing
the game were doing so on authorized copies and they
had purchased the game. The online requirement left some critics

(40:54):
and some players unhappy. UH. Server issues during high demand
made this worse. I mean, if a server goes down,
you cannot verify that your copy is legitimate. You could
have gone out and bought a game, spent money supporting
the video game company, brought it home and found out
you can't play it because their authentication server is down.

(41:16):
That's not great. That is an example of how legitimate
players can feel like they're being punished for playing by
the rules when they say, Hey, if I had broken
the rules and I had found a way to get
around this, I could actually play the game I I
paid for, So why are you punishing me? Which is
a pretty legit argument if you ask me. Um, It's

(41:36):
it's not easy to explain to a player why they
can't enjoy a single player experience on a game they've
purchased and installed on their computer just because their internet
connection goes down or a server goes offline. So that
was a kind of black mark against Diablo three. Now,
since Diablo three, we've seen lots of other games used
this same method of DRN and I don't think gamers

(41:58):
are any happier about this. A lot of them have
sort of become used to it, just because it's become
kind of a common uh strategy among a lot of
different game developers. Now between two thousand and twelve and
two thousand fourteen, Blizzard released expansion packs for StarCraft two
and World of Warcraft, as well as a console version
of Diabo three, but that was it. There were no

(42:21):
other new games coming out in two thousand twelve to
two thousand fourteen, But in two thousand fourteen, Blizzard would
actually release a brand new game. Now, granted, it was
a brand new game that was still tied to the
Warcraft universe, so it wasn't totally original i p. But
the game was called Hearthstone, still an incredibly popular game.
This is a digital card games similar to physical trading

(42:43):
card games like Magic the Gathering. So in Hearthstone, you
are a player who's building a deck of cards. It
contains various units and abilities, and you're using it in
an effort to take down opponents who have their own
deck of cards, and your opponents might be computer controlled
or there might be other human players. More importantly, it's
a game that's absolutely married to the concept of micro transactions.

(43:05):
Now you can play the game without making in game purchases,
but the fastest way to augment a deck is to
buy packs of virtual cards, so it's like buying a
booster pack, and then you can construct a deck of
thirty cards that best matches your playing style. You can't
guarantee that you're going to have any particular card in

(43:25):
your hand when you start off, but you can create
a deck that's more likely to be useful at various
stages of a match. The game is free to play,
so you can play Hearthstone without ever spending a dime
on it if you want to. But if you're going
up against other players who are purchasing booster packs, that
might prove to be a challenge because your odds of
getting a card you might really need uh in order

(43:48):
to build a good deck are low, and it takes
a lot more time to earn booster packs than it
does to just buy them out right. Blizzards released a
lot of new cards for the games several times since
it has introduced Hearthstone, and in November two thousand nineteen,
the company announced not only an expansion for the game,

(44:08):
but also a new game mode within Hearthstone called Battlegrounds,
which is what is called an auto battler. And I
had to actually look this up because I had no
idea what an auto battler was. I play video games,
but I had not come across this term. So in
an Auto Battler. There is a board upon which players

(44:28):
can place pieces, and it's kind of like a chess
game you but you can actually figure out where you're
going to put each piece, and the pieces they select
and the positions that they take determine their side's strengths
and weaknesses, and their opponent does the same thing on
their side. Then they get matched up together and the

(44:50):
conflict automatically resolves, So players are not directing anything at
that point. They've already made all their choices based upon
the pieces they've picked and the position as they've chosen,
and the computer system determines which side wins based on
the criteria, and it all sounds like a type of game.
I'd be really really terrible at As for Hearthstone, it

(45:11):
has been in the news recently as of the recording
of this podcast due to some political controversies and Blizzards
response to them. So in October two thousand nineteen, a
professional Hearthstone player express support for Hong Kong protesters, who
as of this recording are still protesting against the Chinese
government for reasons that are far too complicated to get

(45:31):
into in this podcast, but are very important. Blizzard banned
the player who supported Hong Kong from the tournament that
the player was participating in and banned them from all
future tournaments, and essentially you said you don't get to
earn any money off of Hearthstone anymore. And they cited
a rule that said players are not allowed to do

(45:53):
anything that would bring the game or Blizzard into disrepute
or to hurt their public imag in some way. But
that really opens up an entire can of worms, because
a lot of people suggested that it made Blizzard appear
to be complicit with the actions and philosophy of the
Chinese government, which if you've listened to my episode about

(46:14):
why is everything made in China, you'll understand that's not
necessarily a great thing. And after a lot of criticism,
the company walked back some of the penalties it placed
on this professional gamer. They reduced those penalties, but they
didn't remove them entirely. And the situation was made more
complicated by the fact that the Chinese government Tencent, owns

(46:35):
a stake in Activision Blizzard. So this led to a
big discussion about how more and more companies are at
least becoming partly dependent upon Chinese companies, and that Chinese
companies by and large are state backed entities or even
state owned entities, which means that the Chinese government itself
has influence over those companies. And so you could argue

(46:59):
that through these Chinese companies, the Chinese government is exerting
political influence on companies that are in other parts of
the world. UH, and that appears to be what happened
in this case. So it's still a situation that's unfolding
as of the recording of this episode. UH. And it's
something that has extended far beyond just Blizzard. There's been

(47:21):
a lot of discussion about this for other types of companies,
largely media companies. Let's get back to the timeline. In
two thousand fifteen, Blizzard released Heroes of the Storm, which
was a multiplayer online battle arena game or mobile UH.
This game features characters from various Blizzard titles and pits
players in an arena in which teams try to establish

(47:42):
control over the playing area. So generally speaking, with a
mobile UH, typically you play as part of a team
and you have a goal of protecting your team and
your little home base while you battle for control of
the playing board, and your ultimate goal is to defeat
the opposing team by either completely exhausting their resources by

(48:04):
killing off all of their their units, or by invading
their side of the board and taking it over and
making sure that they don't have control over any part
of the board. There are various ways of getting to
a win scenario, so this game kind of marries strategy
with action. In two thousand and sixteen, Blizzard released the
team based shooter Overwatch, and this game has lots of

(48:25):
different modes of play, ranging from stuff like zone offense
or defense games or escort missions and other types of games.
But it's all in the style of a first person
shooter with a you know, team based first person shooter.
So players take on the roles of one of several characters.
I think there's up to thirty now. Each of those

(48:45):
characters have their own strengths and weaknesses and abilities, and
play is really fast paced and a good team, like
a team that actually knows each other's strengths, they can
really coordinate to be incredibly effective. Watching a team where
they really you know each other and they know how
to communicate, watching them play this game is insane. Um.

(49:05):
I've played the game casually online with people I didn't know,
and we are obviously nowhere close to as effective because
we don't have that level of communication and familiarity. Also,
I found out that I am most useful as a
support class character, like someone who gives healing boosts and stuff,
because it turns out people can move faster than I

(49:27):
can see, and so if I land a shot on someone,
it's almost always by accident. So I'm really impressed by
people who are really good at this game. Over time,
Blizzard has released updates to Overwatch with new characters. It
didn't start off with thirty, but that's how many it
has now, and the company has reported that since its release,
the game has earned a billion dollars in revenue with

(49:49):
more than fifty million players. And like many other Blizzard games,
this one also has micro transactions, which players can purchase lootboxes.
Opening up a lootbox gives you a chance to win
certain types of items. You will get items in every
loot box you open. It might not be the ones
you want, but you'll get something, and they have different

(50:10):
levels of rarity, so some you might just get a
bunch of common pieces of of cosmetic stuff like that's
not meant to influence the actual gameplay. You're not supposed
to get any advantages, like you're not gonna be able
to jump higher or move faster or anything. You'll look different,
or you might have a different catchphrase you can say
in the game, or a different pose you might make

(50:33):
before after a match, but otherwise it's not supposed to
really affect gameplay. So the idea is that, yeah, it's
a way to make money, but you could play the
game without ever buying a lootbox and it's not going
to change the actual gameplay. However, lootboxes in general are
now a controversial topic. A lot of governments around the
world are investigating as to whether or not they constitute gambling,

(50:57):
since you cannot guarantee you're going to get a particular
item when you purchase the lootbox. But these are things
that are obviously of monetary value, or else they would
not be able to sell lootboxes. It's um something that
has not yet been resolved, so we'll have to revisit
that concept in the future. During blizz Con twenty nineteen,

(51:17):
Blizzard announced that it was working on the sequel to
Overwatch Overwatch two, and that it would allow players to
port over the stuff they've unlocked from the first game,
which is good because if you spend a lot of
time and or money unlocking your favorite costumes for your
favorite characters, you'd probably be a little ticked off if
that didn't transfer over to the sequel. Other upcoming Blizzard

(51:40):
games include Diablo Immortal, which was it is a Diablo
game based for mobile devices like smartphones. When they announced
that at blizz Con a while back, um it did
not get a good reception. Fans really unhappy because they
really wanted a full blown Diablo see quell and look

(52:01):
like they were going to have to settle for a
what they viewed as a watered down experience for mobile. However,
in blizz Con twenty nineteen, the company did announce the
Diablo four, the the actual full PC sequel to Diablo
three uh, and that got a slightly better response. Some
other little notes. In two thousand eighteen, Michael Mooreheim, one

(52:23):
of the three original founders of the company, announced that
he was leaving Lizzard, although he would remain on as
sort of an advisory role. He had been serving as
president for you know, a couple of decades, and Jay
Alan Brack, who had been with the company since two
thousand six and who had served as the executive producer
of World of Warcraft, would take over as the president

(52:45):
of the company the following summer. In two thousand nineteen,
Frank Pierce, the third original co founder, announced that he
was retiring and would leave Blizzard as well. Now you
might remember from a previous episode I mentioned and that
Alan Adham had left in the mid two thousand's he
wanted to pursue a career in in finance. He had

(53:08):
been totally burnt out on the process of developing games
and he needed to kind of step away. Well, he
actually returned to Blizzard in two thousand and sixteen, so
he still serves as a senior vice president at Blizzard Entertainment.
So while he was the first of the original founders
to leave, he's now the last one to still be
there because he came back in sixteen. He's also the

(53:29):
founder that Pierce and Moreheim both credited with being the
actual force that brought the company together. So I just
find it interesting that he returned not long before the
other two co founders decided to step away. Now, over
the last year or so, the company has been at
the center of criticism not just because of the Hong
Kong controversy, but also because they cut jobs while they

(53:52):
were also posting record profits, which that seemed weird to people.
There's been a concern that Activision is pushing a more
aggressive approach to managing costs and maximizing profits at the
expense of the quality of the games. You know, this
is tough for a company that really established a reputation
of making sure a game is absolutely the best it

(54:14):
can be before it launches, So that's been an issue
for Blizzard recently as well. That being said, there's still
an enormous amount of anticipation for Blizzard games. That their
games tend to be really well received by critics and
by fans alike. It's not a guarantee in every case, obviously,
but they've got a really strong track record, so they're

(54:38):
still weathering some pretty rough criticisms, and the Activision connection
remains something that a lot of fans are very leery about.
But I expect that we're gonna continue to see a
lot of passionate support and anticipation around their games, and
blizz Con every year is a testament to that because

(54:58):
it sells out within half an hour of tickets going
on sale. So I believe that it happens every year
in Anaheim, California. I have never been. I know I've
got friends who go there or have gone there pretty
much every year. One of these years, I'm gonna have
to try and get my way over there. But you know, hey, Blizzard,
if you ever want meet out there, let me know.

(55:20):
Otherwise I'll just have to take some vacation time. Not
that I am above that. I'd be happy to, but
if I can get there forming order, I'll just come
out there, you know. So that wraps up this episode
of text Stuff, this exhaustive look at Blizzard. It was
fun to take a deeper look at this company and

(55:40):
to really look at some of the things that drove
the decisions behind making those games, as well as some
of the stories, like the controversies behind them that I
wasn't really familiar with before I started researching this. If
you guys have suggestions for future episodes of tech Stuff,
send me an email the addresses tech Stuff at how
stuff works dot com or drop me a line on

(56:01):
Facebook or Twitter. Hand over both of those is tech
Stuff hs W. Don't forget we have our website tech
Stuff Podcast dot com that has our archive of every
episode text Stuff has ever recorded, and you can also
find a link to our online store, where every purchase
you make goes to help the show. We greatly appreciate it,
and I'll talk to you again really soon. Text Stuff

(56:28):
is a production of I Heart Radio's How Stuff Works.
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