Since Blizzard dropped the Diablo 3 bombshell on us early Monday, I will post the second article in my series on micro-transaction models next week. For those of you who have been living under the proverbial internet rock (you are missing some awesome memes right now), Blizzard announced that Diablo 3 would feature two auction houses, one using in-game gold as currency and the other using real currency that would be deposited into a Battle.net account wallet and used from there.
The whole system gets more intriguing when you take into account that sales made on the real-money auction house can make their way to your own very real wallet through an unannounced third party or deposited back into your Battle.net wallet for use on anything digital in the Blizzard store, including WoW game time.
If you're a regular reader of The Lawbringer, you already know how excited I get over virtual currency. This is my wheelhouse. I feel like a master carpenter at Wood Con 2011, cosplaying as my favorite oak tree, quercus alnifolia. Pair that with real currency, and excitement levels hit the stratosphere. I may break through the atmosphere at some point. That faint sonic boom you hear will be me hurtling through the air in excitement and wonderment.
Sure, the Diablo real-money transaction (RMT) auction house is not related to World of Warcraft -- or is it? Oh, it very much is. Faithful readers and not faithful alike (how could you, Debbie?) have been writing in questions via Twitter and email asking me to explain the auction house and talk about some of the potential legal and tax issues that could come around because of it. Also, many people want to know how the RMT auction house could benefit World of Warcraft, despite Rob Pardo's saying there are no plans to bring it over to WoW. Let's take a look at your questions.
Dan wants to know how the new Diablo 3 auction house stops gold sellers.
You say that the Diablo 3 money auction house will stop gold sellers but won't the gold sellers just use the auction house like everyone else? Doesn't this make the problem worse?
Yes, gold sellers will use the legitimate means of selling gold through the Blizzard-approved channels -- and that is kind of the point. See, the problem most people have with gold selling isn't necessarily the fact that buying gold equates to cheating in a video game. We already buy items and "cheat "in almost every game we play. The real problem with gold selling is where the gold comes from and the ramifications and consequences of purchasing gold.
Gold in WoW or Diablo doesn't come from magical gold land, where elves pick virtual currency off trees and dance to the sweet, melodic tones of Ke$ha. Gold often comes from shady companies, mostly from China, where player's hard work and security is compromised so hackers can smash and grab gold and sell it back to the very people getting their accounts hacked and their credit cards stolen. The fact that the authenticator is almost a necessity for account security because WoW accounts are targeted so heavily by hackers is appalling. The Diablo auction house cannot stop these activities, but Blizzard could make it less profitable in hopes that it will diminish.
The Diablo real-money auction house isn't designed to stop gold selling but rather to stop the seedy aspects of gold selling that are hurting Blizzard, Blizzard's customers, and the infrastructure surrounding its games. If you take out the credit card fraud and account hacking, create a sanctioned, Blizzard-run venue for the activity that is already happening, and remove the risk, everyone gets involved in the market. Essentially, to stop the risky parts of gold selling, Blizzard has turned everyone into gold sellers. It's pretty ingenious.
And I think that's a good point to reiterate -- this activity is already happening. It's been happening for over a decade in the Diablo franchise alone. Players and dupers create and hack items out of thin air, sell these items to players on unsanctioned auction houses, make a profit, and leave Blizzard out of the loop. It's not fair to Blizzard or to the players trying to be legitimate. This is the response, and I think it's a good one.
Melanie asked me via email this simple question.
Mat, can you please explain how this system works and why it would be good for WoW as well as Diablo 3? Thanks.
I made you a picture, Melanie. I hope you enjoy it.
I think the real-money auction house would work well in WoW as well as Diablo, because WoW needs the same attention to the economic problems and gray market transactions as Diablo does. Players create or find items; players sell items. Players make gold; players sell gold. You get rid of the seedier aspects of gold selling while at the same time cutting Blizzard in on the action, and players get their choice of currency to spend on items made in game. Plus, you'd have to consolidate the auction houses, which would make my suggestion from a few Lawbringers ago come true, and that's awesome.
The ingenious part of the whole endeavor is that Blizzard not only takes cuts from the posting and sales of auctions on the real-money auction house, but there is the option to keep that money in-house or in-brand. Basically, instead of getting your cash money from the sale of an item, you can deposit those funds back into your Blizzard Battle.net wallet and use it to purchase digital items from the Blizzard store, including WoW game time, WoW companion pets, digital copies of games, etc. It's a huge windfall for Blizzard, where money only comes into the system and only digital products, with unlimited quantities, leave the store. It's all net gain. The more money stays in the system, the better it is for Blizzard.