Blizzard Entertainment Inc.’s highly anticipated release of Diablo III last week should end the Irvine company’s sales slump, while providing a boost to the sluggish gaming industry.
Pre-sale orders for the role playing game broke a record for Santa Monica parent Activision Blizzard Inc., as nearly 824,000 gamers placed early purchases through the week ending May 12. That outpaced No. 2 Tom Clancy’s Ghost Recon: Future Soldier by some 451,000 units, according to VGChartz.
Company watchers expect 5 million copies to sell in the second quarter, providing a revenue boost of at least $300 million in retail sales.
That’s a welcomed bump for Blizzard, which has seen revenue slump in the last year amid a big subscription drop for its flagship World of Warcraft franchise and no new game releases.
It posted revenue of $251 million in the recently ended quarter, down 30% from a year earlier.
The company reported an operating profit of $89 million, down 81% from a year ago.
Blizzard ended the first quarter with about 10.2 million World of Warcraft subscribers, flat from the end of the fourth quarter. The fantasy game remains the top multiplayer online role playing game but had seen some 900,000 gamers drop Warcraft subscriptions the preceding two quarters.
Blizzard’s customers pay about $40 for World of Warcraft and $15 a month to play it online.
Blizzard saw revenue of $1.24 billion in 2011, down 25% from 2010.
The company, which is ultimately part of Vivendi SA in France, is the largest software maker in Orange County and employs about 1,000 people here.
The Warcraft subscription drop helped promp Blizzard to cut 600 employees from its global operations for the “long-term health” of the company, Chief Executive and cofounder Mike Morhaime said at the time.
The cuts, which amounted to nearly 13% of Blizzard’s companywide employment of 4,700, followed a string of recent setbacks.
In January the company announced it would skip its regular fan event BlizzCon this year.
It had held the event at the Anaheim Convention Center since the inaugural show in 2005.
In late February Blizzard said in its forecast it planned to launch two Blizzard titles in 2012.
Blizzard told the Business Journal late last year it had planned to launch three games in 2012 for the first time in its history, a claim the company continually touted during its annual fanfest BlizzCon.
Blizzard, in typical fashion, threw a massive launch party May 15 for Diablo III in Irvine, where some 2,500 fans lined up for hours to buy the $60 game at midnight, get copies signed by developers and meet the brains behind the franchise.
Launch Events
Game Stop at Irvine Spectrum was among more than 8,000 retailers around the world that held midnight launch events.
Diablo III players take the roll of barbarian, witch doctor, wizard, monk, or demon hunter as they fight evil forces in a labyrinth of supernatural encounters and settings.
In a new twist, the game features an auction house that allows players to trade objects for real cash.
A dozen years have passed since Blizzard released Diablo II, and the industry has gone through quite a sea change since then with the emergence of the wildly successful social networking and app gaming market, evident in such hits as Finland-based Rovio Entertain-ment Ltd.’s Angry Birds franchise and San Francisco-based Zynga Inc.’s CityVille, Mafia Wars and Words with Friends titles.
Diablo II, released in 2000, sold more than 1 million copies in the first two weeks, making it the fastest-selling game in history at the time. The Diablo franchise has sold more than 20.5 million copies to date.
“This game has been a long time in the making, and our community has been supportive of us every step of the way,” Morhaime said in recent conference call with analysts.
Blizzard employed some painstaking initiatives to prevent game-play disruptions before a roll-out that included an open beta test for anyone interested in testing out Diablo III.
More than 2 million participated in that trial run, which was part of a lengthy testing cycle critical in “polishing and preparing Diablo III for launch,” according to Morhaime.
Despite those efforts, widespread server problems prohibited many players from accessing the game last week. Angry gamers took to the Web to voice their frustrations, using Facebook, Twitter, and other social networking sites to sound off, dampening some of the initial fervor around the launch. “You should be able to play it fine,” Morhaime said last week during an event at the Center Club in Costa Mesa.
