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Wednesday, May 24, 2006

The Bidding War

The greatest bidding war in the history of gaming is going on behind closed doors.

What's a console exclusive for World of Warcraft worth, anyway? 50 million? 100 million? More? I'm not sure there's even a method to accurately value the fanchise, but I do know that whatever it's actually worth, Sony or Microsoft will overpay significantly.

Here are two reasons why I believe this is happening.
1) Sony and Microsoft desperately need this game.
If Sony gets this game, it gives consumers at lease one compelling reason to drop $599 and buy the console. Right now, outside of Japan, Sony has nothing--just a bloated, overpriced console with no AAA launch titles announced and zero momentum. Finding a negative article on Sony right now is like falling out of a boat and finding water. They're going to need at least a few huge announcements to turn this around.

If Microsoft gets WOW, on the other hand, it's practically a death blow to the PS3. Let's see, the PS3 launches versus Gears of War, Halo 3, and--World of Warcraft? What? I want to pay $200 more and miss out on those three games? Not likely.

So if you're Sony, you desperately need the momentum. If you're Microsoft, you desperately want to stop Sony from getting any momentum. And desperation translates into a bidding war.

2) Blizzard isn't stupid.
So let me try to figure out why getting paid $100 million NOT to do something is a bad idea. If Blizzard promises not to spend thousands of development hours creating a version of WOW for a particular console, doesn't add hundreds of servers, doesn't hire new support staff--in fact, does nothing--someone will pay them a staggering amount of money?

Hmm. And the downside for Blizzard here is--?

That's right. There is no downside. Not with the amounts of money that I'm sure are getting thrown around right now.

Here's one more thing: if the PS3 U.S. launch either slips into 2007 or turns out to largely be a paper launch (one or the other is highly likely), Sony will be even more desperate to give gamers a reason to wait. What better reason than this game?