How World of Warcraft became one of the main reasons for Blizzards current troubles and failures.

How World of Warcraft became one of the main reasons for Blizzard's current troubles and failures.

Journalist and author Jason Schreier continues to stir interest in his newly released book Play Nice, which explores the rise and fall of Blizzard Entertainment. In an article for The Atlantic, he shared a new excerpt, reflecting on what exactly led the company to its current troubles and failures. According to the author, World of Warcraft played a significant role in this.

What Went Wrong at Blizzard Entertainment

How a Multi-Billion Dollar Success Story Quickly Turned into a Curse

Over the last three years, while working on a book about the history of the video game company Blizzard Entertainment, I couldn’t shake a troubling question: Why does success feel so terrible? Even as I type that, it seems almost un-American, a rejection of the hard work and ambition that have propelled so many great minds and world-changing ideas.

But Blizzard proves that modest accomplishments can sometimes be more sustainable than astronomical ones. Founded in Irvine, California, by two University of California students, Allen Adham and Mike Morhaime, the company quickly became respected and popular thanks to breakthrough franchises like StarCraft and Diablo. Everything, however, changed in 2004 with the launch of World of Warcraft (WoW), an online game that earned billions of dollars. I started writing Play Nice because I wanted to explore the complex relationship between Blizzard and its eventual parent corporation, Activision. After interviewing over 300 current and former Blizzard employees, I uncovered a tragic tale—a cautionary story about how the relentless pursuit of infinite growth and revisions can destroy a company, no matter how legendary its status.

When Blizzard was founded, the video game industry had not yet grown into the $200 billion business it is today. The Super Nintendo console hadn’t yet launched in America, and Tetris was still one of the most popular games. But Adham and Morhaime saw a unique appeal in this medium. In games, you didn’t just watch events unfold—you controlled them.

Adham and Morhaime founded the company in 1991 with a small amount of seed money from their families, some college-level programming knowledge, and a handful of artists and engineers. Within ten years, their games became critical and commercial hits, selling millions of copies and capturing players around the globe. None of their games invented a genre—Warcraft and StarCraft followed in the footsteps of strategic titles like Dune II and Herzog Zwei, while Diablo shared DNA with games like Rogue and Ultima. But Blizzard had a working formula. Their games stood out for their polish and accessibility, unlike the more intricate offerings from competitors, which, particularly in the early days of PC gaming, seemed to demand that players consult lengthy manuals at every turn. At the same time, Blizzard’s games were complex enough to distinguish casual players from experts. Almost anyone could pick up the game and play, just as anyone could pick up a bat and hit a baseball, but there’s a difference between Little League players and someone like Shohei Ohtani.

Crucially, each game included modes that allowed people to compete or cooperate with each other, first over local area networks (LAN) and later, starting with Warcraft II in 1995, over the internet. Blizzard’s success was intertwined with the growth of the internet, and the company even developed its own platform, Battle.net, which allowed users to play online for free (an unusual move at the time). This was a bold strategy in an era when less than 10 percent of Americans had internet access.

Play nice shop Blizzard

Blizzard Entertainment, once a symbol of gaming innovation and success, has seen its fortunes change dramatically over the years, particularly following the unprecedented success of World of Warcraft (WoW). Released in 2004, WoW was a breakthrough, offering not just multiplayer matches but a persistent, living fantasy world where players could interact and explore independently of their presence in the game. However, this success quickly became a double-edged sword for the company.

Blizzard’s founders, Allen Adham and Mike Morhaime, expected WoW to attract around 1 million subscribers if things went well. Instead, within a year, the game reached 5 million players. The revenue generated by the game’s monthly subscription model ($15 per player) brought Blizzard immense wealth, with some employees receiving bonuses larger than their regular salaries. The success led to massive expansions within the company, from hundreds to thousands of employees, and Blizzard relocated to a sprawling new campus. By 2010, World of Warcraft had over 12 million subscribers and Blizzard had merged with Activision to become Activision Blizzard, the largest publicly traded company in the gaming industry.

However, WoW’s explosive growth came with consequences. The pressure to constantly update the game and meet players’ expectations forced Blizzard to shift talent from other projects to keep WoW running. This led to delays and cancellations of other games, and Blizzard’s renowned culture of innovation started to erode. The team behind WoW, known as Team 2, began to view themselves as more important than other departments, boasting that their work funded the salaries of the rest of the company.

The immense success of WoW set an unrealistic bar for future projects. One of Blizzard’s most ambitious follow-up efforts, Titan, was envisioned as a revolutionary game combining elements of first-person shooters and life simulation. However, the project became bloated and unfocused. After seven years of development and $80 million in costs, Blizzard canceled Titan in 2013. This cancellation marked a significant failure for the company and its parent, Activision Blizzard, as it represented not only a financial loss but a missed opportunity for a new hit game.

Meanwhile, World of Warcraft began to decline, losing subscribers quarter after quarter. Blizzard’s plan to release new expansions annually fell apart, and although the company launched two other hits, Hearthstone and Overwatch, these projects nearly faced cancellation as resources were diverted to support WoW. For Activision’s CEO Bobby Kotick, this wasn’t enough. He wanted consistent, reliable growth, not the erratic profits Blizzard was delivering. To achieve this, Kotick pushed for more financial oversight, bringing in a new CFO and a team of business experts, shifting Blizzard’s philosophy from “make great games and the money will follow” to a more profit-driven mindset.

In October 2018, Morhaime resigned, stating that it was time for someone else to lead Blizzard. As Activision’s influence increased, many of Blizzard’s veteran employees left, including key figures, without the company even acknowledging their departures publicly. Blizzard began to suffer from repeated PR disasters, project cancellations, and growing dissatisfaction from Activision when key titles, like sequels to Diablo and Overwatch, were delayed for years.

The company’s troubles escalated in 2021 when the state of California filed a lawsuit against Activision Blizzard, accusing the company of sexual misconduct and discrimination, with much of the focus on Blizzard. Current and former employees spoke out about the toxic work environment they had experienced. Blizzard responded by changing leadership, firing or reprimanding dozens of employees, and even renaming characters in its games who had been named after alleged perpetrators. The lawsuit was later settled for $54 million, but the damage to Blizzard’s reputation was severe.

In 2022, things took another dramatic turn when Microsoft announced it would acquire Activision Blizzard for $69 billion, signaling the end of an era for the once-legendary game developer.

Play nice books Blizzard

Today, Blizzard is clearly not the company it once was. Despite having millions of players and successful games, it has not released new franchises in nearly a decade and continues to grapple with the reputational and organizational damage inflicted in recent years. There were many factors, but a direct line can be drawn from Blizzard’s current troubles to the billions of dollars generated by World of Warcraft (WoW). If it weren’t for that sudden success and the attempts to accelerate growth, Blizzard would likely be a very different company today — perhaps more stable and confident.

Other video game producers have faced similar problems. Epic Games, once known for its numerous games and technological innovations, released Fortnite in 2017 and watched it turn into a cultural phenomenon; Epic grew exponentially and abandoned most of its other projects when this game became a hit. Rockstar, the company behind Grand Theft Auto, has not released a new installment in the series since 2013, largely due to the billions earned from the previous game and its online component, which sold a total of 200 million copies but required enormous resources. Independent creators of hits like Hollow Knight and Stardew Valley struggle to timely release sequels, undoubtedly at least partly due to the creative pressure to surpass the mastery that millions of people have come to love.

Not everyone plays video games. But many have felt the consequences of immense success that changed what they once cherished, whether it’s a rock band scaling back its music to attract a larger audience or a search engine using artificial intelligence to lure insatiable investors. Why spend resources creating new products when the old ones make so much money? Creative people often hope that one big hit will set them on the path to greatness, but achieving that goal can also mean losing their soul. As a former Blizzard designer told me, “When millions turn into billions, everything changes.”