While E3 is the biggest annual trade show for the video game industry, Blizzcon is often a more significant event for Activision Blizzard (NASDAQ: ATVI) shareholders. The Blizzard wing of the company held its annual convention on Nov. 3 and 4, and while no new games were unveiled, there were important takeaways from the event that investors need to know.
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Starcraft II set to go free-to-play
Blizzcon 2017 kicked off with the news that Starcraft II will be available as a free download as of Nov. 14. Expansion packs will still cost extra, but players will have access to both single-player and multi-player content without needing to make purchases.
With Starcraft II now more than seven years out from its 2010 release and Activision Blizzard making a big push in the e-sports space, it makes sense to transition the title to the free-to-play model. Making the base game more widely available will broaden the potential for expansion pack sales and in-game purchases, and it will also probably have the effect of increasing interest in the title's e-sports events.
New World of Warcraft content
Despite first coming out in 2005, World of Warcraft (WoW) remains a significant revenue generator for Activision Blizzard. At this year's Blizzcon, the publisher announced Battle for Azeroth -- an upcoming expansion pack for the game that will add new environments and gameplay features. The subscription-based World of Warcraft has seen its user base shrink substantially in recent years, but Blizzard has managed to increase subscriber levels with previous expansions, so investors should pay attention to the updates in the pipeline for indications of how much gas WoW has left in the tank.
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The company also showed off a new game mode, dubbed World of Warcraft Classic, that will do away with many of the updates and changes made to the game over the past decade. Players have been making customized servers to create this type of experience, often referred to as "vanilla WoW", for years, but they've typically been shut down by Activision Blizzard. Offering an official version of vanilla WoW looks to be a smart move to keep some of the game's most enthusiastic adherents engaged.
Blizzard no longer releases subscriber numbers for the game, but its 2016 major expansion pack reportedly boosted its player base substantially. The subscription-based MMORPG genre is essentially dead outside of WoW, and it doesn't look as if there are any major new entrants on the horizon, so any improvements and compelling content that Activision Blizzard can add will help sustain the game as the go-to offering in this category.
Updates for Overwatch, Hearthstone, and Heroes of the Storm
In addition to featuring Overwatch e-sports matches and revealing the competition schedule, mobile app, and first round of merchandise for the game's upcoming professional league, Blizzard released a new add-on character and level for its popular first-person shooter. As of the company's September-ended quarter, Activision Blizzard reported that Overwatch's player base had grown to 35 million, and the company has big plans for the title. Overwatch is one of this decade's most successful new game franchises, and while both the new character and map will be available to players free of charge, regular updates should help keep the game's player base engaged and encourage spending on in-game items.
Blizzard also said that it would be adding new characters from Overwatch and World of Warcraft to Heroes of the Storm -- the publisher's free-to-play entry built around characters from its most recognizable video game franchises. The new characters, along with some gameplay overhauls, will make their debut in 2018.
For Hearthstone, its card game based on the World of Warcraft universe, Activision Blizzard will be pushing out another update. The game's last expansion pack led to a double-digit increase in the amount of time players spent with the game, and it's likely that investors can look forward to another surge following the upcoming expansion.
Tying the show together
A focus on e-sports created a unifying theme across the expo's different games and events, with most of Blizzard's big franchises showcased for competitive play. Turning video games into popular spectator sports presents big growth opportunities for Activision Blizzard, so it's encouraging to see the company making it a clear priority across its franchise lineup. Not every one of the company's properties will make a big e-sports splash, and its efforts in the category will hit some bumps and snags along the way, but the concerted push should help the company continue to gain traction in the space.
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