Looking back 20 years, can you recall your motivation for starting Blizzard. What your ambitions were for the company?

Mike Morhaime, CEO: Frank and I went to UCLA and we became friends with Allen Adham. He was a smart, ambitious, driven guy with a mission: he was going to start a games company as soon as he graduated.

We actually graduated six months before him and got jobs. But Allen did the hard sell on us, convincing us it was a good idea to quit our nice jobs and join him in this start-up. Neither Frank nor I had any experience making games.

We all loved games, and I was interested in technology and understanding how stuff worked. I had no idea how these developers got all this cool stuff to happen on screen and I wanted to learn.

So would you two have been happy to carry on along salaried lines?

Frank Pearce, executive VP, product development: I don’t know I would have been happy, but it’s probably what I would have continued to do.

Apart from Allen’s persistence, what persuaded you to take the risk: commercial potential or creative opportunities?

FP: Absolutely the latter. It was about making games we wanted to play. And putting the passion we had for playing games into making them.

How long was it before you established your own identity as a games publisher?

FP: I think maybe the key was three Super Nintendo titles: RPM Racing, Rock n’ Roll Racing and Lost Vikings, because all three of them had multiplayer gaming elements in them. And that’s become such an important part of our history and our identity.

Did you always think that would be the future?

MM: I think we always felt that the gaming experience was more gratifying when you could share it with another person, whether working with each other or competing against each other for bragging rights. The three of us were all very competitive people.

Back then people used to classify gaming as very much a solitary pursuit, rather than something social. It was used as a stick to beat the industry with.

MM: Even now I think people who don’t really understand the games business will see someone playing World of Warcraft and think that they’re having a solitary experience, when the reality is that it is anything but that.

What were your ambitions for World of Warcraft when you originally launched it in 2004?

MM: We had differing views internally. At the time, the king of the hill was EverQuest and I think they had half a million subscribers.

So we thought that by making the game more accessible, attracting fans of the Warcraft universe, we might be able to double that. Maybe we could get to a million, we didn’t know.

But we also saw that most EverQuest subscribers came from North America and we thought there might be an opportunity to attract players in Europe.

I think we pegged the opportunity somewhere between 1m and 4m, but internally that was a pretty aggressive forecast.

People thought that was extremely optimistic. We were all completely wrong. So wrong.

It took off immediately. It took us a year to catch up to the demand, in terms of shipping boxes and to support everyone that wanted to play.

FP: Everyone was way wrong about the size of the market. We had people telling us that there was almost no market there. I think Dark Age of Camelot was the biggest at the time, and I think they had 160,000 European subscribers.

MM: Even a couple of weeks before launch we were talking to some wise industry veterans who were telling us that there was no market in Europe. They were telling us horror stories, basically, and we were just silently disagreeing – hoping they were wrong.

FP: We had no idea either, though. I mean it turns out we were wrong as well as them – it was just differently exponential degrees of wrongness.

And certainly no one knew how much it would change Blizzard as an organisation. I don’t think any of us had our eyes closed, I just don’t think it was possible for us to have any idea. The day we launched WoW was the day we transitioned from a company that sold boxed products to a service company.

What is the secret of its success?

FP: It helped a tremendous amount to be building an MMO around an already established franchise that was near and dear to the hearts of Blizzard gamers. I think leveraging the WoW universe was a big factor. I think the fact that we already managed the online BattleNet community was also a factor. We also had an eye for accessibility.

MM: Right out the gate, we had a loyal following of players who had enjoyed our previous games. That meant they were prepared to take a chance on a new experience with us.

FP: I would also attribute some success to the expansion of broadband infrastructure. There is an element of the launch of World of Warcraft being the perfect storm.

Why has no one else been able to emulate its success?

FP: I think one of the big challenges anyone faces if they put a target directly on World of Warcraft is that they’re competing with a development team that has invested about 12 years in creating content for the players. It’s tough to create an experience that can compete with that.

MM: It also probably looks deceptively simple, but this game is so massive and inter-connected. You’ve got the progression from level one to 85, the endgame experience, the guild interaction – all these things are so critical and have to run so smoothly to not frustrate or lose your players. Getting all of the pieces to work well together and not screw something up along the way is very difficult.

You mentioned the benefit of an MMO built around a brand and universe people care about. Those arguments certainly apply to Star Wars, so what are your views for the prospect’s of EA’s upcoming The Old Republic?

MM: It certainly is a strong franchise and BioWare’s a great developer. We hope they make an enjoyable game because they’re going to bring in a lot of new players to MMOs, and their idea of whether or not they like this type of game is going to be determined by that experience.

FP: This is a game that has an opportunity to grow the MMO market if done right and therefore is very important to the industry as a whole, not just EA.

What are your thoughts on in-game advertising within World of Warcraft? The size of your audience must make it hugely attractive for major brands.

FP: I think you have to evaluate all the business models and determine what makes the most sense.

So if we have a business model that involves players subscribing for $15 a month, I don’t think it makes sense to also subject them to advertising.

If someone was offering a free-to-play experience and they needed to supplement their revenue with in-game ads, I think that’s a reasonable approach, but we don’t need to.

MM: I don’t agree 100 per cent, because I think if the advertising is appropriate to the content, then it would make sense. If we made a sports game, for instance, then I can totally see us having advertising in and around the stadium and that doesn’t spoil the experience at all. But in a fantasy game like WoW, I just don’t see how you could do that.

How does it feel for WoW to have become a cultural touchstone? For it to be referenced and parodied in all sorts of areas?

FP: It’s fantastic. Have you seen the South Park episode? We loved it and it was the only episode they’ve ever created to win an Emmy.

MM: The teams here work so hard creating this content and it’s really gratifying to see the impact that has not only on our players but on popular culture in general.

FP: I think it’s great for developers to know that their work is relevant to so many people in so many different ways, especially for a dev team that’s been working on content for the same franchise for 10 years.

Has life changed, post-Activision merger? Activision said they’d bought Blizzard because they liked how you operated and they’d leave you alone – and it turned out that this wasn’t BS.

FP: Don’t say Activision bought Blizzard – now you’ve got Mike riled…

MM: Our parent company Vivendi bought Activision.

Well, after whatever happened happened, what’s life been like?

MM: We wouldn’t have supported the merger had we not believed Bobby and Activision understood how special Blizzard is and weren’t supportive of our values.

We were convinced that they did, that the two businesses were complementary and that we wouldn’t be giving up our creative autonomy in any way. And that’s exactly how it has panned out.

How do you feel when Bobby takes flak for not being sympathetic or empathetic to the creative elements of this industry?

MM: I have an advantage there because I know Bobby personally and we have very long, in-depth conversations, so my view of him is not limited to small sound bites taken out of context.

I can tell you that Bobby has been very supportive of Blizzard and that we have a great relationship with him. I don’t think the public image that some people have of him is fair or accurate.

There’s been talk about you moving onto consoles, especially since those job postings on your site. What can you tell us about that?

MM: We are looking for a couple of console developers, yes. At this stage though, it’s basically an investigation to see if it makes sense for Diablo to be a console game as well as a PC game.

We haven’t made any decisions yet, but a lot us feel that if ever there was a Blizzard franchise that could play well as a console game, then that’s probably it.

The other ongoing speculation surrounds Project Titan. What can you tell us about that?

MM: You’re referring to our unannounced MMO project, which is unannounced, so I can’t really tell you much about it.

FP: And there are lots of projects that we’re not talking about.

MM: Fortunately you don’t know about any of them.

Wow, how much don’t I know? Can you put a number on my unknown unknowns?

MM: We can’t I’m afraid. But on Titan what we can say is that we think of it as a next generation MMO. We’ve learned a lot over the past 12 years in developing and running WoW, so we’ve called upon some of our most experienced developers to seed a new project.

It’s definitely not going to be a sequel or replacement for WoW. It will be a different experience set in a different world. But we don’t have anything else to say.

But it’s completely original IP, yes?

MM: That’s right. We’ve been kicking this idea around for a few years now.

Finally, what are your thoughts on the transition between boxed product and digital distribution?

MM: There is still a very large segment of our player base that prefers to have boxed product so we’ve seen retail sales continue to do very well. We want to provide our players with the choice to install our games however they like.

We see retail continuing to be an important part of our business for the foreseeable future.

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