World of Warcraft has lost more than one million subscribers in the first three months of 2013, as gamers leave for free to play alternatives.
Game creator Activision Blizzard announced a fall from 9.6 million users in the previous quarter to 8.3 million.
The company behind the hugely popular fantasy franchise said despite a rise in profits it faces difficult times ahead.
Activision suggested competing titles and uncertainty around new consoles were partly to blame.
World of Warcraft subscribers have fallen to the current level from a peak of 12 million in 2010.
Further decline is likely, according to Activision chief executive Bobby Kotick.
He said: “We expect to have fewer subscribers at year end than we do today.”
He added that free and cheaper games available on mobile devices had made the industry “far more competitive”.
Activision has promised heavy investment in World of Warcraft to engage players and address the decline in subscribers.
New storylines and experiences will be introduced faster although no major updates are expected this year.
The video games industry has been struggling to reverse falling sales in the face of competition from mobile platforms.
Anticipation of forthcoming new consoles from Sony and Microsoft may have put off gamers from buying new titles.
Microsoft’s new Xbox is due to launch on May 21st and the new Sony PlayStation 4 is also expected to go on sale before the end of 2013
