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Play Nice: The Rise, Fall, and Future Of Blizzard Entertainment (Schreier, 2024)

·5 mins

I started this book late November last year and I finished it yesterday on April 7th, so it took me about 5 months to finish this book (wow). I’ll have text blurbs for interesting ideas from the book rather than serving as a chronological summary. Also, this will be one of the longer summaries, most of my summaries in the future will likely only be a couple paragraphs or so.

Early Years at Blizzard #

  • 1991: Blizzard was founded as Silicon and Synapse by Allen Adham and Mike Morhaime, graduates from UCLA.

  • Taking contracts from Interplay with assistance from Brian Fargo but created their first game, Warcraft, as a multiplayer fantasy variant of Dune II.

  • Warcraft II emphasized approachability and depth for the sequel and was the first big success, selling 1 million copies, as well as establishing the company structure of QA teams.

  • Diablo was developed by a separate studio (Condor) as a contract.

  • Compensation was continually stifled and there was continual crunch.

  • Starcraft was a massive success, in particular benefitting from internet infrastructure being built in Thailand and South Korea and the start of PC Cafes.

  • Blizzard attempted to make a point and click adventure Warcraft game but canceled it, even after bringing in Steve Meretzky, the legendary designer behind adventure games like Sorceror and Zork Zero.

Before Overwatch #

  • World of Warcraft

    • It was based off the successful EverQuest MMORPG.
    • Relied on homegrown talent from QA/testers
    • Inspired early internet memes and forming a collaboration with South Park.

  • Failure of Titan

    • 2008: development began as a new MMORPG, combining FPS game with sim game.
    • FPS portion was prelude to Overwatch which was a grand success for Blizzard, though not completely satisfying Kotich

  • Heartstone

    • The game idea was incubated by a smaller team (as other developers shifted to work on battle.net)
    • An unexpected hit

  • Diablo 3: launch missteps and the auction house was improperly done

    • Financial people at the game recommended that they don’t overcharge so monetization serves players well - this never happened at the company again
    • Reaper of Souls fixed the game up
    • Morhaime’s regret: not continuing to support the game

  • Heroes of the Storm

    • DotA was a custom map in Warcraft III, developed by Icefrog, foucsed on singular units rather than commanding many
      • Valve contacted the developer and helped create DotA 2
    • Riot Games created League of Legends as another game based on that mode
    • The first time Blizzard missed the boat

  • Battle.net

    • Pat Wyatt came up a novel idea: to provide free online infrastructure for Diablo and Starcraft,
      • Mike Morhaime approved, wanting to serve the players right.
    • He thought of a lucrative, industry-changing initiative: to turn Battle.net into a digital store for a variety of PC games instead of just Blizzard’s (this was shot down by executives who wanted to focus on Blizzard).
    • Big mistake in retrospect

Parental struggle for Blizzard #

  • Initially owned by Davidsons and Associates (an educational game company) which was bought by CUC (a consumer services conglomerate)
    • That company committed substantial financial fraud (overstating merger reserves that were reported as earnings).
  • 1997: Blizzard was sold to publisher Havas which was itself purchased by Vivendi
  • 2008: Activision merged itself with Vivendi Games, with Kotich leveraging his connections at JP Morgan and making the debt into shares to gain ownership
  • 2023: Microsoft buys Activision-Blizzard after turmoil from sexual assault scandals

Esports #

  • After Starcraft took off in Korea, KESPA was founded to handle licensing for the sport
    • contentious meetings between Blizzard and KESPA - ‘you’re the ball’
  • For Starcraft II, Starcraft reached an agreement with the organization.
  • Overwatch emphasized esports with a professional league owned and operated by Blizzard.
    • Blizzard was interested in investing in Twitch but hesitated, leading Amazon to take the company.
    • OVerwatch also introduced lootboxes (1 billion in revenue)
    • They charged $20 million per franchise (Kotich pushed the number so high to get the interest of billionaire sports teams owners to invest)
      • Got owners of NFL teams (ex. Robert Kraft) to invest
      • Overwatch League was different in that the organization was set up to give Blizzard money
  • However, game updates were slow and Team 4 resisted commercialization (including sponsorships)
  • Overwatch 2, with most of its development focused on a PvE mode rather than the main PvP mode, came out half-baked.
  • The pandemic and the switch to YouTube were the final nails in the coffin, with the league ending in 2023

Clashes between Activision and Blizzard #

  • Bobby Kotich grew up always interested in generating profits (with smaller businesses when he was younger)

  • He and his roommate took a look at Mediagenic, started to fail despite creating hits long ago.

    • Kotich acquired the company, renamed it to its old name Activision, and was ruthless, heavily rewarding and punishing the people there.

  • Brought in Armin Zerzha who was hated at Blizzard, fixated on profits

    • He eventually became CFO

  • Blizzards culture contrasted as letting games simmer and given the proper time. This contrasted heavily with Ac culture.

  • Activision’s corporatization of Blizzard

    • Stack ranking introduced.
    • Profit-sharing weighted toward hit games
    • There was still a Blizzard “tax”: High prestige, low pay.
    • QA and testers underpaid, overworked.

Cultural Issues #

  • Frat-like - company retreats to Las Vegas for partying, alcohol and blurred personal-professional boundaries
  • Emphasized a blurring of lines in terms of personal life and corporate life
  • Women pushed out and not in leadership
  • 2023 - California Lawsuit
    • While mildly inaccurate, it highlighted sexist behavior at the company (example, a manager hitting on his suboordinate)
    • WSJ article - Kotich sent email dismissing the lawsuit and saved a COD producer after an investigation suggested that he should be fired

Microsoft Acquisition #

  • $69 billion - October 13, 2023
    • FTC’s lawsuit failed after Xbox promised COD on PS
  • Leadership - Mike Ybarra as President and Xbox’s Matt Booty - emphasized hands off approach
    • Layoffs after and Adham’s two projects cancelled, so he left the company (all founders gone)

Timeline: #

1991 - Founded 1994 - Warcraft: Orcs and Humans 1995 - Warcraft II 1997 - Diablo 1998 - Starcraft 2000 - Diablo II

2004 - World of Warcraft 2010 - Starcraft II: Wings of Liberty 2012 - Diablo III 2014 - Heartstone 2016 - Overwatch

2022 - Diablo Immortal 2022 - Overwatch 2 2023 - Diablo 4