Instead,theycounttherevenuegainsthroughoutyourcustomerlifetime.Doesn'tsoundlikeabigdeal,doesit?Let'stalkaboutwhythat'ssuchasignificantnotion.
First,thisstatementresoundinglydebunkstheoccasionaldetractingstatementthat"Theyjustwantyoutobuythegame."Whiletheydowantyoutodoso,Blizzard'saimistoextendyourcustomerlifetime-theywantyoutobealong-termsubscriber.Yeah,thatdoesincludeyour15.00amonth,butthat'snoteventheendresult.Theywantyoutohavefun,andstickaroundforthewholeride.
Second,thevalueofboxsalesarevastlydeprecatedagainstyourcustomerlifetime.Again,theywantyoutohavefunandstickaround.Thisistruetosuchadegreethattheydon'tevencountyourbox-salesmoneyagainsttheirrevenue,exceptasabolsteroverthelifeofyoursubscription.
Ofcourse,there'sotherreasonsActivision-Blizzardmeasuresboxsalesthisway.Itreducesfluctuationbetweenquarters,becauseeachquarterisresultinglycomparable.(Forexample,"expansionquarters"wouldalwaysbevastlymoreprofitablethan"non-expansionquarters."Byvaluatingboxsalesoveracustomerlifetime,theykeepeachquarterrelativelysimilar.)
Thereisaninterestinggem,however,tobefoundintheirdiscussionofWrathboxsales:
"RevenuesrelatedtothesaleofWorldofWarcraftboxedsoftware,includingthesaleofexpansionpacksandotherancillaryrevenueswillcontinuetobedeferredandrecognizedratablyovertheestimatedcustomerlifebeginninguponactivationofthesoftwareanddeliveryoftheservices."
That'saprettypackedstatement.Insummary,itmeansthatthemoneyBlizzardmakesfromsellingthegameboxisn'timmediatelycountedintheirperformancemetricsatthetimeofsale.(There'snoDecember"bump"torevenuedirectlyfromthe50ishdollarsyoupayforanexpansion.)