Diablo III cannibalized WoW admits Blizzard

One of the standout data points from Activision's earnings announcement today was that the company's subscription numbers for World of Warcraft have fallen by more than a million in just the last three months. WoW now stands at just 9.1 million subs, but that isn't making Blizzard boss Mike Morhaime nervous.

Morhaime said on the investors call that it's actually quite normal with each WoW expansion pack for players to drop off. Moreover, this time around, before Blizzard launches the Mists of Pandaria expansion, Blizzard fans were pre-occupied with Diablo III, which Morhaime acknowledged had an impact on WoW as well.

"Historically we have seen usage decline towards the end of an expansion cycle. We saw a similar drop in subscribers in the months before Cataclysm, followed by a substantial return of players around the Cataclysm launch. We're also seeing that a number of players took a break from WoW to play Diablo III," he said.

As for Diablo III, while the game did put up record numbers, it also encountered a number of problems, which are well documented. Morhaime took the opportunity on the investors call to once again address concerns about the state of Diablo III.

"While Diablo III was our 14th #1 seller, we did experience some challenges. Due to the unprecedented influx of players a number of service issues arose that we needed to work around the clock to address. The vast majority of these issues were ironed out within a couple weeks of launch. As I mentioned in a letter to players recently, we're not satisfied with just breaking launch records. We want people to play and enjoy Diablo III for a long time," he said.

"We've already made a number of fixes and updates, including activation of the auction house... and the Diablo team has also been working on improvements to in-game rewards and having a player vs. player mode which we hope will enhance the value and longevity of the game."