World of Warcraft saw 1.1 million subscribers lost in the first quarter of 2012 and after every quarter in 2011 it has seen a drop in subscribers (1.8 million in total), Blizzard's latest earning call revealed. In a bid to counter the losses, Blizzard had introduced free expansion upgrades: free upgrades to level 90 and free fast flying to locations.

Blizzard said the drop of subscribers is mainly in the East, as MMO-Champion reported, and due to the launch of Diablo 3. Blizzard sold 10 million copies of Diablo 3. Around 1.2 million copies were sold due to the World of Warcraft annual pass, a year-long subscription for the MMORPG.

Subscribers' losses are also because of users waiting for the new expansion, Mists of Pandaria, launching September 25. Mists of Pandaria will hopefully launch as soon as possible in Eastern markets according to Blizzard; however, a Q3 release is unlikely. Blizzard also said in the earnings call that it will utilize TV and online advertisements during the build-up to the launch.

There are also 16.9 million Battle.net subscribers, the service connecting Blizzard games including World of Wacraft and Diablo 3.

Away from WoW and Diablo 3, Blizzard cited upcoming releases Skylander Giants and Call of Duty: Black Ops 2 as setting up a strong year-end outlook. The games' predecessors, Skylanders: Spyro's Adventure and Call of Duty: Modern Warfare 3, took first and third place in retail for the first half of 2012. Diablo 3 placed second in the results.

Blizzard also touched on the Heart of the Swarm expansion for Starcraft 2. A beta is "coming soon," while multi-player is playable at Gamescom in Germany.

It's natural for World of Warcraft to lose a percentage of subscribers because there's going to be a slowdown. The MMOG is seven years old and has seen competition since its release. Talking of competition, it's going to be interesting to see if the hyped MMORPG Guild Wars 2 dents World of Wacraft's subscriber numbers. Guild Wars 2 releases August 28.