My son and I were talking about Richard Garriott's Shroud of the Avatar Kickstarter game. We were specifically discussing the 'personalized multiplayer' aspect of the game. He mentioned he wished he had more money to help support nudging the industry more towards this direction. I mentioned that even if the title was more of an indy hit, you didn't need big numbers to be profitable. Ultima Online is still running and it has around 100k subscribers. (Which, SW:ToR fans, is good news. EA will keep a profitable MMO running for a long, long time even if it doesn't have a WoW-sized player base.)
Later on I thought about how World of Warcraft effects everyone's perceptions of success, especially the ardent defenders of the game. Now, to be clear, I am *not* saying that WoW is dying. Far from it, but there are things in the subscriber numbers to notice and watch. At its peak WoW had 12 million subscribers (Blizzard press release for October 2010). As of date of this post the official subscriber numbers are at 9.6 million subscribers. The numbers have been lower, surged a bit at the release of Mists of Pandaria, and have dropped back down. Most of the defenders tend to focus on the raw numbers. To be fair, they rightfully say that WoW's numbers are still impressive (they are) and that most MMOs would love to have a player base equal to what WoW has lost. 2.4 million subscribers would stellar for 99% of the MMOS out there.
The thing is, the defenders haven't discussed the dip in subscribers from a business perspective. Any business (and Blizzard is a business first) would be very concerned to have lost from 20% to 25% (at one time) of their market. Losing that many people means something has gone wrong. It could be internal mistakes or a failure to adapt to external changes. When you look at Mists of Pandaria from this angle you can see why some of the design decisions were made. Perhaps not as a primary factor, but definitely as a significant one. The loss of subscribers helps explain why Blizzard went back and recycled some of the concepts from Vanilla and Burning Crusade (tiered raids you have to progress through, alt-unfriendlyness, etc). Going back to systems, albeit with a fresh coat of paint, whict originally brought in a lot of subscribers is worth trying.
If we look at that loss a bit differently it can actually be positive for WoW in the long run. In some ways the loss is permanent. People's lives change and they just won't play an MMO, any MMO again. In other ways that loss is good if it means people went to a different MMO and are having fun. Ignoring the inevitable WoW-bashers in other games, most of the people playing other MMOs are having more fun with their current MMO than WoW. This is good for the industry as a whole when each MMO can find its (profitable) niche. More experients, more successes, more people playing MMOs (or MMO-likes, such as Shroud of the Avatar), even WoW. Having WoW (or any big MMO) can be nice because it gives us a common language to talk about MMOS in game terms. It isn't so nice when to succeed people try to imitate WoW or call themselves WoW-killers *cough*sw:tor/warhammer*cough*. As players we need those experiments to push the genre. Without it we're stuck with Blizzard trying to reinvent WoW each expansion and the inevitable stagnation and player-base decay that will occur. So the next time someone gets defensive about WoW's decline in subscriber, introduce them to the idea that it could be a good thing for WoW in the long run. :)
 Blizzard is a very competitive, very hard-nosed business-oriented company. If you look at when they release cinematics, patches, expansions and when their competitors do the same you'll find a fair amount of matching up on the dates. While they disinenuously say they develop on their own cycle without paying attention to competitors (a tactic Apple uses all the time) there are too many coincidences for them not to be trying to compete. Now if I was an Activision-Blizzard shareholder I'd be happy about this. If I was a competitor I'd try to make sure I was ready for Blizzard to mess with me.