06-25-2003, 09:35 PM
Well, I just checked the real-time inventory at Ingram Micro Canada. (Ingram Micro is the world's largest distributor. I only checked Canadian stock (Toronto/Vancouver) because it was quick. It is safe to assume that Canadian stock is over 10% of the US stock.
Current stock on all Warcraft titles (WC2, WC Battlechest, WC3): 0 Backordered: 0
Current stock on all Diablo / Diablo2 titles (D2, D2X, D2 Battlechest): 0 Backordered: 0
Granted, this wasn't a very fair test. In another month, they will begin to get in Christmas stock, and then they will probably keep 50,000 or more of the (hopefully) hot titles in stock at any time. On the other hand, they do have quite a few of the newest titles that will get hyped (can you say "Hulk"? :)
My point is, Blizzard/Vivendi isn't getting any revenue from those titles right now. You will see copies in the retail stores, but Vivendi already got their money for them from the distributor. Or they will, depending on the terms (usually 90 days). They might even need to credit some of the outstanding product, if it gets stock balanced from the retailers and the distributors decide to send it back for credit. That doesn't happen too often, but it is where all the $4.99 bargain barrel product comes from.
As for the "initial prfit (profit?)", that depends on a lot of factors. If the distributor thinks that the product will be good enough to not need return privileges, they may buy it outright, and get the product at a substantial discount. The distributor usually gets the largest chunk from the sale of games. It's a safe bet that the manufacturer gets less than half of the retail price.
The cost of general operations, development, promotion and packaging come off the top of what the manufacturer gets back. In the case of BattleNet games, there is an ongoing cost of support, besides the traditional support cost (replacing defective disks, support staff, etc.)
You are right that I don't know what the operating cost of BattleNet is. Blizzard has always been tight-lipped about detail of BattleNet, for obvious security reasons. But, if their current income from BattleNet games is zero, it is pretty safe to bet that the ongoing cost of running BattleNet at this time is coming out of their capital.
My point stands that buying a game company based on their assets of old games is not a great idea. You could probably buy out the folks at ArenaNet for less, and get a development team with a comparable dedication to quality product. Buying Blizzard at this time doesn't get you much more than some real estate, and a bunch of employees that could leave at any time.
(oh, yah- I've been in the games business since 1977, including 15 years in retail)
-rcv-
Current stock on all Warcraft titles (WC2, WC Battlechest, WC3): 0 Backordered: 0
Current stock on all Diablo / Diablo2 titles (D2, D2X, D2 Battlechest): 0 Backordered: 0
Granted, this wasn't a very fair test. In another month, they will begin to get in Christmas stock, and then they will probably keep 50,000 or more of the (hopefully) hot titles in stock at any time. On the other hand, they do have quite a few of the newest titles that will get hyped (can you say "Hulk"? :)
My point is, Blizzard/Vivendi isn't getting any revenue from those titles right now. You will see copies in the retail stores, but Vivendi already got their money for them from the distributor. Or they will, depending on the terms (usually 90 days). They might even need to credit some of the outstanding product, if it gets stock balanced from the retailers and the distributors decide to send it back for credit. That doesn't happen too often, but it is where all the $4.99 bargain barrel product comes from.
As for the "initial prfit (profit?)", that depends on a lot of factors. If the distributor thinks that the product will be good enough to not need return privileges, they may buy it outright, and get the product at a substantial discount. The distributor usually gets the largest chunk from the sale of games. It's a safe bet that the manufacturer gets less than half of the retail price.
The cost of general operations, development, promotion and packaging come off the top of what the manufacturer gets back. In the case of BattleNet games, there is an ongoing cost of support, besides the traditional support cost (replacing defective disks, support staff, etc.)
You are right that I don't know what the operating cost of BattleNet is. Blizzard has always been tight-lipped about detail of BattleNet, for obvious security reasons. But, if their current income from BattleNet games is zero, it is pretty safe to bet that the ongoing cost of running BattleNet at this time is coming out of their capital.
My point stands that buying a game company based on their assets of old games is not a great idea. You could probably buy out the folks at ArenaNet for less, and get a development team with a comparable dedication to quality product. Buying Blizzard at this time doesn't get you much more than some real estate, and a bunch of employees that could leave at any time.
(oh, yah- I've been in the games business since 1977, including 15 years in retail)
-rcv-