Tuesday, November 17, 2015

You Really Can't Go Wrong With a Third Warlock

So I went ahead and started a third warlock last week so that I could have one of each spec at max level when Legion came out.  That warlock is now sitting at level 60 and working his way through Hellfire Peninsula.  Good progress for just a few days worth of work.

After the warlock is done, I'll likely go back to my alliance group, where I have four more toons that need to be pushed from somewhere in the 60's or 70's through to max level.  Rogue will be up next, followed by priest, then monk then warrior.  Because warriors are always last with me.  For absolutely no good reason.

If I'm able to finish those four up, I'll probably go back and start a third hunter on my new third Horde server.

Meanwhile, Garrison operations alliance side are now making good progress and starting to generate some cash for my toons on that server.  One of the interest side effects of leveling some of these toons from pre-90 is that they didn't have time parked in their garrison accumulating garrison resources, so most of them are running very short on resources by the time they hit max level.  What that means is having to wait a few days in some cases to accumulate enough to upgrade to level 3 and then to build out the various buildings I need for my gold making and leveling strategies.

And yes, I'm well aware that I could build lumber mills for each of them or fly around looking for treasures, but I'm not interested in investing that kind of time.  I'm looking for something that I can do in a minute or two per day with each toon.

So that's the update at this point.



Tuesday, November 10, 2015

Thoughts on Legion Info From Blizzcon and Ding, Level 100 #18

So I could spend the next several hundred words going completely nuts over this and that gameplay element that was introduced at Blizzcon and that we can expect in Legion.  But I went back and looked at reactions that I'd written after the last couple of Blizzcon intros of new expansion content, and it seems I pretty consistently missed the mark.  What I was most excited about in each case either never happened, or ended up being something disappointing.

So I'm going to go with these general comments:

  • The idea of zones scaling to fit where you are and give you more choice about which order you quest in is fantastic.  How it actually works in practice will likely depend on if you are able to leave one of the zones out completely and still hit max level (which I'm guessing will be possible with full heirlooms and other xp boosts).  If that's the case, then I'm a huge fan.  Otherwise, I'm not sure the ability to just change the order in which I quest does all that much for me.  But we'll see.
  • Transmog stuff.  I know this is going to bug most of you immensely, but I'm just not a big transmog guy.  Can't be bothered.  So I honestly don't care.  Big fan of freeing up tabard space though!
  • Artifact weapons.  Sounds cool.  Reserving judgment until I see how it works.  My main worry here is if you'll have the ability to go back and complete an artifact for a second spec on the same character without it being too insanely time consuming.  In the meantime, I'm almost feeling like I need a separate character for each spec.  Of course, that's absurd.  But, we may try that anyway.
  • Class halls.  Same deal.  Sounds cool.  But so did garrisons.
  • Profession overhaul.  Anything that you can do to fix professions at this point will be hugely welcome.  That being said, I'm also going to reserve judgment on this one until I see it in action.
I also managed to hit level 100 on my mage this week, making him my 18th max level character.  Technically my rogue is up next.  He's currently sitting at level 69 in Borean Tundra, so he's got a ways to go.  The mage was fun, but started to feel extremely squishy toward the end of the leveling train.  After the rogue, it'll be shadow priest, then warrior then monk (how did the monk end up last?).

There is a big part of me that wants to go ahead and start another warlock and level them all the way up on another server.  We'll have to see how that goes. If I get around to leveling a third set of toons (probably Horde side, either on Thrall or Drenden), it'll be warlock for sure and then hunter.  After that, not as sure.



Wednesday, November 4, 2015

Analysis of Q3 Earning Release and King Entertainment Acquisition

Activision-Blizzard released their third quarter earnings last night followed by an earnings call this morning.  A few highlights from the release:  GAAP Warcraft revenue was down 5% for the quarter.  Non-GAAP revenue was down 26%.  See my post on the second quarter release for explanation of what the differences between those two are.  On a year-to-date basis, GAAP revenues were up 14% but non-GAAP revenues were down 18%.  Note that based on discussions in the slide deck that they went through in their earnings call, it appears that foreign currency is actually driving a lot of these decreases rather than any real decrease in results.

For those of you wondering how the whole foreign currency thing works, I'll use an average European subscriber to illustrate.  The subscription rate in Europe is €12.99 per month.  Last year, during the third quarter, the average exhange rate was 1.32 dollars per Euro, so last year, in the third quarter, that subscriber would have shown up on Blizzard's financial statements as generating US$17.15 per month.  This year, the average exchange rate in the third quarter was 1.11, so that same subscriber paying the exact same thing shows up as US$ 14.42, a decrease of 16%.  On a year-to-date basis, that decline would work out to 17.8%.  So that's what I'm referring to above.

Total Blizzard revenue was down 5% for the quarter with operating income down 22%.  Unlike a lot of multinational companies, the currency declines may have a bigger impact on their bottom line, because a lot of their expenses are in the U.S. in dollars, so don't benefit from the same foreign currency changes decreasing expenses as well as revenue.

Year to date, total Blizzard revenue was down 7% with operating income down 30%.

Despite those results, for Activision Blizzard as a whole, it was still an extremely profitable quarter with year to date earnings per share up more than 50% over prior year.  They are sitting at the end of September with almost $4.4 billion of cash on their balance sheet and $4.1 billion of debt, or $300 million of net cash.  Of course, the transaction with King Entertainment, which I'm going to discuss a bit more is going to cause cash to go down, and debt to go up.

One other interesting point came out of the earnings call itself.  The Company noted that they would no longer be disclosing total subscriber metrics for World of Warcraft after this quarter.  What they said on the call was that they believe there were better metrics out there for tracking "engagement."  I suspect this means that rather than information on subscribers, we'll begin to see data disclosed on Monthly Active Users ("MAU's") which is the metric that they use for most of their other platforms, along with information on play time per day per user.

Last but not least, there were absolutely no Warcraft related questions in the Q&A session following the call, which is not completely surprising given the King transaction.

King Entertainment Transaction

So in terms of the King Entertainment transaction, here are a few highlights.  The total purchase price of $5.9 billion is going to be paid using $3.9 billion of cash that they have on hand and $2.3 million of new debt (that is basically just being issued under their existing credit facilities).  They will inherit almost $1 billion of cash from King, so their cash balance following the deal should still be in the $2 billion range.

For the first six months of the year, King Entertainments revenue has been declining at a rate of around 11%.  However, their SEC filings are reported in US dollars, so they are subject to the same foreign currency issues mentioned above for Blizzard.  Their monthly active users grew at about a 3% rate over prior year.

King Entertainment is a little bit more profitable overall than Activision Blizzard.  Here is a great slide from their call this morning that shows how the two companies compare in terms of revenue and EBITDA for the previous twelve months:

Following the completion of the transaction, the combined company will have approximately $6.4 billion of debt.  However, the two companies combined generated around $1.8 billion of free cash flow in 2014, so there should be some really strong opportunities to pay down debt over the next few years.  Even at $6.4 billion, their debt stands at only 2.5x their expected EBITDA, which is a very reasonable ratio.

As further evidence, Activision Blizzard's debt was actually upgraded to investment grade by Moody's following the announcement last night.  Some very interesting comments below from Moody's in connection with the upgrade:

"Activision Blizzard's upgrade to a Baa3 senior unsecured rating reflects its leading position in the growing and fragmented gaming industry, strong diversification across multiple genres and gaming platforms, and strong track record of developing profitable and sustainable franchises with international appeal. The ratings and stable outlook take into account our expectation that management has the ability to make strategic investments to create new intellectual franchise properties to replace aging ones which face the potential risk of decline over time, and leveraging existing ones across various platforms."

The only other interesting point to note, is that unlike a typical transaction like this, there doesn't appear to be any kind of break-up fee built into the deal if the transaction doesn't close.  In the press release, they indicated that they expect the deal to close in Spring 2016 and they expect it to improve Activision Blizzard's earnings for 2016 by 30%.

So all indications are that this is a good deal for both companies.  It gives Blizzard access to a big player in mobile gaming as well as shfiting up their demographic a bit (King has a much larger percentage of female users than Blizzard, something both companies highlighted on the call).  For King, it gives them a partner than can hopefully help reignite their growth.

What will this mean for the average World of Warcraft player?  I'm sure there will be a lot of discussion on this in the coming months, but my initial reaction is probably not much.  They plan to continue to manage King Entertainment as a separate business unit, much as they do with Blizzard now.  While there is certainly some opportunities for cross promotion and increase mobile interfaces, that was something that Blizzard was working on anyway.  There isn't currently much of anything in terms of cross promotion between Activision and Blizzard, so not sure that aspect of how they operate will change adding one more party to the equation.  So while this is a great overall strategic move for Activision Blizzard as whole, it may not have much impact down in the trenches with individual titles.

One interesting data point that I ran this morning.  If you had chosen to invest 11 years worth of your subscription dollars in Activision Blizzard stock back in late 2008 / early 2009 after they acquired Blizzard from Vivendi, that $1,980 would be worth $8,400 today.  And things continue to look up for Activision Blizzard from here.

Tuesday, October 27, 2015

Loremaster Update

So I have managed to make a crazy amount of progress on Loremaster in the past week.  Part of this progress was actually a little bit of discovery and memory rather than actual questing, but there was a ton of that as well.

So first to the discovery and memory part.  After talking about my progress with some guildies, I was gently reminded that the overall zones achievements are in fact account wide, and that there was one character - my warrior - that I leveled AFTER Cataclysm.  I even talked about it here in this very blog:   Love That Warrior Blog Post

So not only had I leveled this character after the old world reboot, but I did it in Eastern Kingdoms.  (I fortuitously discovered this at the point that Joar was almost completely done with Kalimdor)  So perusing through the epic Joarmama's achievement list, I discovered he had made enormous progress on many many of the zones in Eastern Kingdoms.  By the way - Joarmama - great name for a goblin warrior, am I right?

In the meantime, I had been feverishly working through completing Kalimdor on my warlock and managed to get through all of that last week.  After that, I went back to the warrior and did the last few quests in each zone that he needed to finish them up.

So last week, I was sitting at 890 quests to go, with 397 in Kalimdor and 493 in Eastern Kingdoms (or so I thought, but not really as it turns out).

As of this morning, Kalimdor is done and I have a total of 97 quests to go in Eastern Kingdoms in the two Stranglethorn zones.  And that's not going to take me long at all.

The process itself has been a lot of fun.  Quite a few really cool quests that I hadn't done before and really enjoyed.  A couple of challenging spots as well - typically any quest that involves "weakening" an NPC and then capturing him doesn't work really well when you're one-shotting things immediately.  Main issue in Kalimdor was a quest in Feralas that involved capturing an Ogre-Mage.  The key, unfortunately seemed to be getting naked and giving myself rez sickness, and that seemed to do the trick.  That was only one quest out of hundred, but I would not have been able to complete that zone without it (I tried).

Oh, and Ghostland sucks.  Combine having to run with a serious of quests that don't seem to be well organized geographically, and it was probably my least favorite zone of all.  That one needs a revamp.

So that's it for this week.  Assuming I'm done in the next few days, I'll go back to leveling my alliance toons.  Mage is up next.  He's currently sitting at 78 or so.



Tuesday, October 20, 2015

Revisiting Loremaster

So back in the fall of 2010 I decided to take a crack at finishing up Loremaster on my main.  I got pretty close too.  Within 40-50 quests or so.

I had been planning on it changing with the release of Cataclysm and was planning to get it finished by then.  But then the pre-patch for Cataclysm dropped, and the ability to finish it actually died a couple of weeks before I had anticipated, so I never got it done.  Everything in Eastern Kingdoms and Kalimdor effectively completely reset except for a handful of zones on each continent.  And I never went back.

So now I'm taking another look at it again, anticipating a long drought of new content between now and when Legion drops in early 2017 (joke!).

As of this morning, I have 890 quests to go, 397 in Kalimdor and 493 in Eastern Kingdoms.  So I think I'm going to work on it a bit, in between fiddling with leveling on my Alliance toons.  I had my 17th toon hit 100 last week, so I now have 5 to go to have a max level of each class from each faction.  And given how fast the leveling process is now, I could finish those 5 easily in 2 months or less, so I've got plenty of time to finish this up.  The mage is up next, who will be further boosted by a nice shiny new heirloom ring out of my shipyard missions.

So that's it for my Warcraft entertainment these days.  I'm going to be going back and doing some old school questing rather than worrying about more and more garrison missions to accumulate more and more gold that I'm not actually sure what I'm going to do with anyway.



Tuesday, October 6, 2015

Too Much Speed for Immersion

So I've discovered that the downside of leveling my alliance lowbies one at a time is that it really brings home just how incredibly fast leveling is these days.  Most place, I'm only getting in one or two quest chains in any given zone before I'm ready to move on to the next.  In Uldum for example, I managed to unlock Ramkahen and went to talk to the first guy, killed some scarabs and some raiders and I was done and off to Twilight Highlands.

In Twilight Highlands, after babysitting Anduid around Stormwind for a while, I didn't even get far enough in the actual zone to unlock the portal back to Stormwind before it was time for Pandaria.

And I'm doing absolutely nothing unusual to boost my leveling speed.  Just wearing my heirlooms and queuing for dungeons regularly.

It makes me glad that I did all of those zones at level when they were current, because it sometimes feels a bit sad that I'm missing out on the story.  On the other hand, given that this would be my 17th time reading this particular story, it's probably not all that critical for me personally.

It does make me want to go back and finish up Loremaster on my main.  I got really really close before Cataclysm dropped.  I was down to less than 50 quests to go to get it completely knocked out and I just never quite got it over the finish line, so all of that work effectively evaporated once Cataclysm launched.  I think I'll probably finish up the druid before I take that on though.

In the meantime, I'm still just enjoying playing the game.  There's not much in the way of news, so rather than get upset over every little twist and speculation, I'm just focusing on playing.  As much as I love my various Warcraft podcasters, it also means I'm not listening to much these days.  I'll pick things back up once the beta goes live.  Hopefully that's before March.

My druid is sitting at level 87 now and on his way to Kun-Lai.  It's at least possible I'll have him all the way to 100 before the end of this week.  Then it will be time to decide if I want to move on to the mage, or take on the Loremaster challenge on Joar.



Tuesday, September 29, 2015

On To The Lowbies! And Ding, Level 100 #15 and #16

So I managed to get my last two alliance level 90's pushed through to 100 over the last couple of weeks - my shaman and my paladin.  Both came in right at that 9 - 9 1/2 hour mark on played time which seems to be pretty consistent.  Note that I'm not doing anything extraordinary to cheese these - just using garrison potions and full heirlooms.  Their are clearly opportunities to level much faster than this using stacked bonus objectives and the huge xp boost potions.  But I still enjoy the questing process, so this is basically just straight questing with some bonuses added in.

So with all of my previous max level toons now sitting at 100, I'm moving on to working through some lowbies.  Rather than the previous approach that I've taken of leveling them each a bit at a time to maximize rested xp, I've decided I'm just going to bang them out one at a time, so that rather than having a bunch of toons stuck at some mid to high level but not max when the next expansion launches, I'll instead have several more hopefully sitting at 100.  We'll see if I can get all of them there in that amount of time.

Next up is my alliance druid, who is currently at level 76 and working his way through Northrend.  After that, I will probably do my alliance mage, just to leverage a shiny new heirloom ring I got from a shipyard mission.