Yep, without WoW Activision-Blizzard would be in alot of trouble. It is funny how wow made ~280 million in revenue last quarter and SC2 appeared to of contributed atleast $40 million in revenue, thats ~320 million in revenue from Blizzard alone or ~43% of Activion-Blizzard revenue and its safe to assume Blizzard spent ~$70 million or less for the quarter meaning Activion-Blizzard should of had a profit of atleast $200 (assuming ~250mill blizzard profit and ~50 million activision loss)

Without Blizzard, Activision would probably be in a similar position to EA - ie losing money.

Average revenue per Wow user worldwide is 9$, Blizzard published the numbers a while back.

So Wow brings around 108 million$/month in revenue.

But it's a lot more complex than that.

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).

The Activision side of the company is profitable too ( 20 millions MW2 20 millions pack = close to 1 billion revenue from MW2 alone...)

But for accounting purpose some of the revenue is not accounted for as it comes in ( I am not an accounting expert I don't understand the details).

A proof of that is that they have a positive cash flow of over 1 billion$ over the last 12 months and that they are sitting on 3.3 billion$ of cash and actually decided on a new stock buy back program of 1 billion$.

If you really want to understand better how it works you have to look at the cash flow of the companies in the industry.

Activision has a 22% Free Cash Flow/revenue which is by far the best in the industry.

By comparison EA FCF/revenue is around 0%....

Microsoft has  FCF/revenue of 34% which is among the best of any company in the world...

hmmmm interesting stuff

They make $289 million in a quarter from MMOs, so I assume that's pretty much all WoW and their statements say the cost of sales of MMORPGs is $61 million, so that'd be the cost of keeping WoW running, so that's $228 million gross then you have to take account of advertising the cost of running Blizzard and whatever else they have going on. I wouldn't be surprised if Overall Blizzard made a profit of about $100-$125 million

Activision is the most profitable public publisher in the business.

However, the only things making money are Call of Duty and Blizzard business.

Their core publishing hasn't made money in years which drags down their overall performance.  Guitar Hero, Transformers, Blur, Spiderman, etc.

So, if folks stop buying Call of Duty or subs start to fall for WOW then Activision will be in big trouble.

I agree, it doesn't make any sense, or it kinda does when I look at the quality of other Activision games. And I definitely agree with the bolded part! I have always been fond of Blizzard, but I have a certain thing called principles, and I follow them no matter what! And not buying games that have ANYTHING to do with Activision is one of them.

Yeah I never understood how all these prominent Western publishers don't make more profits. Activision in particular.

And rest of the world (read everything but America and China) pays more than $13 a months. Plus its obvious anyone that believes they only get $13 a month haven't played Wow. People transfer characters to diffrent servers, transfer characters to another account, purchase stupid special mounts or change sex/race/faction/apperence on their characters. This nets a lot of money. Plus, lets not forget the fact that you have to pay for the game plus both expansions, to actually play it. Also are you sure all of Blizzards earnings are accounted for in this report? I mean why would Activition get any of the money made on Wow?

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.