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Ail said:

Wow costs are a lot higher than you estimate them to be( I think the Wow team itself is  close to a thousand employees now, I read an article about it awhile back)  and Blizzard is spending a lot of money on Diablo 3, and a new MMO. Still Blizzard in itself is very profitable ( I think to remember they made around 400 million$ of profit/year).

Actually Blizzard is making about 50 times as much on Wow then they are using to develop it further/server costs. This was about 2 years ago, maybe Wow isn't as profitable anymore. Some of their other projects might be costly though, but the money on Wow alone is enough to keep all of Blizzards projects running and get a lot of money in their wallets every month.