Activision Blizzard on Tuesday announced better-than-expected Q3 2011 net revenues and earnings, reporting that the company delivered GAAP net revenues of $754 million, as compared with $745 million for the third quarter of 2010. This gain was achieved via digital channels, accounting for more than 57-percent of the company’s total net revenues. However in a conference call following the Q3 2011 results announcement, Blizzard Entertainment CEO Mike Morhaime admitted that World of Warcraft’s subscription count continues to fall, dropping from 11.1 million subscribers in June to 10.3 million in September — a 7 percent drop. The long-standing fantasy MMORPG saw a 300,000 drop in subscriptions in the six months prior, meaning that Blizzard has lost over a million customers in the first 9 months of 2011.

According to Morhaime, the biggest drop in subscriptions is taking place over in the East. However he also said the game is still one of the most popular titles in China, and currently remains as the most popular subscription-based MMOG in the world. “That said, we know there are improvements that we can make in game content,” he continued. Blizzard plans to retrieve its lost customers with new updates and expansions like the just-announced Mists of Pandaria. There’s even a content update pack launching in the coming weeks although it’s not meant to reel in previous subscribers. “It’s really not intended to go out and drive new user acquisition, that’s a whole other strategy,” he said. “But it does drive engagement with the game, and so that will impact churn if we do it successfully, and will eventually drive win-back, as players tell each other about the content they’re enjoying.” Blizzard previously reported that a sudden loss of subscribers — nearly one million at that — was due to seasoned gamers re-activating their accounts for the release of the third expansion, Cataclysm.

These customers quickly chewed through the new content and then canceled their subscription when the cataclysmic meal was fully consumed. Last month during BlizzCon 2011, the company revealed the game’s fourth expansion pack, Mists of Pandaria. The new expansion reintroduces the elusive pandaren, originally seen in Blizzard’s real-time strategy game Warcraft III, as a playable race and adds a brand-new player class: the martial-arts-focused Monk. The expansion will also provide a range of new content and game features including new quests and dungeons, group scenarios and “challenge” modes, pet battles, and more.

via Blizzard