Ben Gilbert: evaluation

Transcript context

…So on the technical side, Blizzard obviously had been observing all that had been going on with Warcraft and they built their own and all the third-party tools that were enabling people to play against one another online. They build their own service called Battle.net which is still a huge part of Blizzard today. All of their games run on it. That is like the Xbox Live version. It's their way of owning and controlling how people play online against one another and it also becomes a pretty huge revenue generator for them. First, as they sell advertising on the service for other games, for their own games, for other publisher’s games. But then they also start to monetize it later with World of Warcraft which we’ll get into, monetize it directly in a minute. Yeah. This really foreshadowed what every sort of game publisher or at least a lot of large game publishers would go on to do and become a cornerstone of their business model. Like Valve does this with Steam, and Steam is this incredible distribution channel where they basically can take a cut off every game that gets pumped out and control distribution because everyone already has Steam installed and that's where they go to browse games, and that screen real estate is incredibly valuable. Battle.net is the same way. Xbox Live really controlling all the API surface underneath all the games for a lot of the player management and matchmaking and all that. Really, like paving the way for these other companies that would come later for what their product and business model looked like. Yup. So that was 1997. Then 1998, things start to really snowball here both on the momentum for Blizzard and their games and all these innovations that they’re driving. And on the internet tech bubble era here. So first thing that happens at the very end of ’97, CUC, the new parent company, merges with another holding company called HFS. So CUC which was the current parent company merges with another internet holding company called HFS, and this is the company that owned the Ramada, Howard Johnson, and Days Inn and all these like random hotel assets. The company gets renamed Cendant. And let’s put a pin on that for a sec, we’re going to come right back to it. Immediately after that, Blizzard releases their next big title which is StarCraft. And StarCraft just takes everything that we’ve talked about with Warcraft and the success they had there and Diablo and starting to grow the whole gamer genre and bringing more people into it, and StarCraft just blows past all of that and takes this right into the mainstream. StarCraft becomes the biggest selling game of 1998 anywhere on any platform – console, PC, what-have-you. Sells 1.5 million copies right out of the gate. And it’s basically Warcraft. It’s a real-time strategy game like we talked about but it’s evolved. So the graphics are better, they have sort of an isometric view which is sort of like a quasi 3D. It’s kind of a three-quarters view down under the battlefield instead of just a straight top-down. They have three character races/classes you can play as so it’s really balanced and it’s super, super deep. So this comes out and people love it so much and it's all around the world. And actually, randomly, in South Korea over its lifetime it sells 1 million copies in South Korea. There are only like 50 million people that live in South Korea.…

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