Blizzard's battle in South Korea over the real money auction house
by Mathew McCurley 
Jan 13th 2012 at 1:00PM
Diablo III is one of Blizzard's most ambitious (if not the single most ambitious) launch of a game in the history of video gaming. Blizzard intends on a worldwide mega-event to launch Diablo III simultaneously in every country, with a massive localization undertaking. Hundreds of millions of dollars have been poured into this product. Countless man-hours have been spent toiling behind computer screens and long nights and painful testing. This is the forge where artifacts are made.
And as the mighty hype machine churns and the release date comes closer and closer until the game is announced, the best-laid plans of men and Blizzard begin to feel the sting of friction. Chaos exists amongst the order. Back in September, we learned that South Korea had denied a rating to Diablo III because of concerns over the real money auction house, a new, hotly debated feature coming to the game. More specifically, the South Korean raters felt that the ability to "cash out" on real-money auctions skirted too close to the gambling line.
This was bad. This was really bad. How could a core feature of one of the most hotly debated and fought-over moves in microtransactions to this day be the cause of release hardships? People frantically checked their backlogs of notes. It didn't make sense. South Korea wasn't an issue, they assured themselves. There was no way.
South Korea's effective ban on Diablo III is most likely at an end now. I'm sorry to cut the story so short without any kind of lingering, omniscient looming like Glider almost achieved. No, Mike Morhaime went to South Korea in September and tried to talk it out. I can only imagine Morhaime, standing tall against the backdrop of the Blizzard flag at the Blizzard South Korean Consulate building, a stadium alight with StarCraft II TvT off in the distance. The meeting of minds takes place. Ultimately, the ability to cash out after making a real money sale on the real money action house will be removed from the South Korean version of the game, most likely. We are still waiting for a release date.
An obvious fear
The potential backlash to the real money auction house in Diablo III had and still has the potential to be a polarizing issue, despite the often-overlooked fact that participation in the auction house is entirely optional. Players don't want to feel forced to spend real money in a game they have already paid for, and companies want to provide a fun and reliable service. How could the real money auction house even be conceived without a worst-case scenario list? It's out there, and I wish that I had it.
No, it is a very real fear that the RMAH would cause some problems. I predicted last week that the Diablo III auction house will be the target of some far-flung, made-up issue that permeates the news cycle for all of 20 minutes before dispersing into a gentle night sky. If the solution to the problem is to flip the switch for your country and you don't get the cash out feature, is all that a country has to do to block Diablo at this point and get the upper hand on Blizzard to make a fuss about cashing out? It's a big product with a lot of wealthy people throwing around a lot of money to make it work.
What we've learned
What I've learned from this whole ordeal is that you can never underestimate the chaos. Diablo III will eventually get a release date, go on to sell millions upon millions of copies, and delight the world with demon-killing antics. There is no doubt about it at this point -- it's a very real product that I have installed on my computer in beta release. All of these things will happen, but not without the bumps along the way.
What does this mean for the real money auction house? Not much, unless you're playing Diablo III in South Korea. What does this mean for the eventual controversy over the real money auction house in the United States and potentially in Europe? Hey, there's always no more cashing out, right?
On Jan. 4, Jay Wilson tweeted that Asia was not what was holding up the Diablo III launch, assuring players that the real money auction house feature and potential issues around the world with gambling concerns and other unforeseen situations would not hold up the launch. Jay Wilson is Diablo III's lead designer, so I'm sure he has some insight into the release of this game. This isn't a column ragging on Blizzard for not releasing its game or my own impatience. I am simply looking at this whole thing from the standpoint of the everyday gamer who will happily tear open the metaphorical package on Diablo III on Day One. Did we really not see the whole gambling issue coming, or was South Korea just thought to be an issue?
Edit: As of Friday morning, South Korea has rated Diablo III 18-and-up, removing any South Korean roadblocks. The issue was over the auction house.
Mat,Thanks for the email, J.A. If you cannot trade in game for the item, you cannot sell it for in-game currency, period. Since game time is not currently a tradeable item in game, you cannot sell game time to players for gold, put them up on the Auction house, etc. This may change in the future. Blizzard may look at the success of the Winged Guardian pet that is tradeable in game but purchased with real money as a sign that game time should also be made to work in a similar way.
On my server, I see a lot of trade channel advertisement offering to sell prepaid game card for gold. Is this go against the Term of Service? Even if it's doesn't go against the ToS, trustworthiness issue will stop reasonable people from buying these through trade channel. So, do you think Blizzard will issue an official support for this type of transaction? We know they offer the Guardian Cub to counter gold buying problems, but imagine if players can buy prepaid time card then securely sell them in-game (via Auction House). I'd imagine this would be more vastly successful than the Guardian Cub and Blizzard might actually stop losing subscribers if people can paid for their subscription via gold.
-J.A.
See you guys next week.
This column is for entertainment only; if you need legal advice, contact a lawyer. For comments or general questions about law or for The Lawbringer, contact Mat at mat@wowinsider.com.
Filed under: Analysis / Opinion, The Lawbringer
Reader Comments (Page 1 of 2)
Kunikenwad! Jan 13th 2012 1:14PM
(The new) Daeity, over at Digital Castration has been following this issue for quite some time. His posts are incredibly insightful.
http://daeity.blogspot.com/
NuclearSaturday Jan 13th 2012 1:19PM
Wow this is the first I've heard of Diablo III's real money auction house. So am I correct in assuming that an industrious player could potentially make their living using the in-game auction house? How much does an individual stand to make?
kingoomieiii Jan 13th 2012 1:37PM
No one knows. Prices will likely fluctuate wildly for a little white, until it settles in. I can see super-rare items selling for $30 and up, though.
I wonder if the posting charge will be real money on that AH.
Aalokor Jan 13th 2012 1:45PM
potentially a lot at first, but I can't imagine it would pan out to be more than a few dollars per hour once it flattens out.
At first, there will be a few lucky random drops, which will sell for big money. the more early sales go for, the more people will try to start farming for equipment, which will definitely drop the prices quickly, dropping the price of all but the best gear to a few dollars, at which point, only the extremely rare will make any money at all.
that's my prediction any way.
Davio Jan 13th 2012 1:48PM
Yes they could, and whatever people will pay.
Although I've seen a lot of people excited about selling gear for real money, but no-one excited about buying it... will have to see what the actual take-up rate is.
N-train Jan 13th 2012 1:59PM
I remember friends who could sell max level, decked-out characters for enough money to buy a whole new cd key (and hence a whole new account to make another max level decked out character to sell) and still have a fair amount of money on the side. It certainly wasn't a livable amount of money, but it was enough over time to pay for some nice computer upgrades.
However, its worth noting that this was well into Diablo's life-cycle, where you could both sell characters (not possible in D3) and people had found a pretty standard rate for characters and items.
Ultimately I'd say it's pretty unreasonable to a make a living wage off selling stuff, but I'd imagine the first couple weeks or months with the game being popular, fresh, and with PvP just getting started, there's certainly a lot of money to be made.
Jabadabadana Jan 13th 2012 2:14PM
The lack of visible buying may be made up by people who spend some of what they make selling to buy stuff for themselves, thus perpetuating the cycle.
Or it might be 99% selling to 1% buying.
Or it might be like gold selling in WoW. I've met one (1) person who has admitted to buying gold. And yet if there wasn't a viable market, we wouldn't be inundated with spam about it. (buying gold may be shameful to most who do it, but if they're already willing to spend real money, they are a market for this ah.)
Snuzzle Jan 13th 2012 4:01PM
Id imagine it would be fairly trivial for the average gamer to make enough for his monthly sbscription and perhaps a decent amount of "play money". I think hardcore AH tycoons could very realistically make an actual living on D3 money. I'm also recalling back in the day when an ex told me he'd paid $300 for a rare EQ item. I wasn't an MMO gamer so I was appalled at the time. Now I can easily see how a teen with a lot of disposable income or a hardcore competitve player would pay that and more without qualms for, say, HM DS25 loot (if it was buyable).
krisgamache Jan 13th 2012 1:31PM
What is up with the syntax in this article?
"On Jan. 4, Jay Wilson tweeted that Asia was not what was holding up the Diablo III launch, assuring players that the real money auction house feature and potential issues around the world with gambling concerns and other unforeseen situations."
Assuring players that XXX what?
KPB Jan 13th 2012 2:08PM
I'd strongly recommend against buying game time in trade. What typically happens is that the seller is on hacked account using a stolen CC. They will let you enter the code for your game time first because they know it will work but a couple days or a week later when the victim realizes their cc has been stolen they will dispute the charge and Blizzard will remove your game time and you are SOL and won't get your gold back.
Jon Jan 13th 2012 2:58PM
I don't see the connection to gambling. At least, not any more than trading on the stock market constitutes gambling. Is that illegal in South Korea too?
Al Jan 13th 2012 5:44PM
Stocks don't have pretty graphics, whistles and bells like poker machines and D3 to keep people playing. You'll also know the true odds and risks going into a stock market as well.
pwherman Jan 14th 2012 6:26PM
Actually, stocks have pretty graphics (company logos, colors to indicate market performance), buy/sell alerts, and a nice bell that goes off at the beginning of trading (in the U.S. anyway). And you may think you know the "true" odds and risks, but recent history has once again proven that to be untrue. The definition of gambling is to bet on an uncertain outcome, and any player's/investor's final outcome is far from certain.
Scooter Jan 16th 2012 12:34AM
My concern is the impact this will have in gaming. How will it change the way game that come after it are made? The more it becomes accepted to spend money after you bought a game the more concerned I am that the game I buy is actually complete.
Lets use DLC as an example. The concept was to allow additional content to be added to popular games. It was great at first but then Dragon Age comes along and shows us that the "complete" game we were being sold in fact isn't. Developers not only had enough time to make the DLC but they also added an in-game salesman. Not all games can be as great as Dragon Age, but how many of them will have DLC at launch? A game needs to stand on its own.
How long before we see more in-game salesmen? How long before the RMAH is no longer optional or is the only feature? Every time we see a new "feature" the reality is something else is taken away.
If game companies are so strapped for cash they need to focus on these two things.
1. Stop paying executives exorbitant salaries unless they earn it
2. Focus on ways to make game development cheaper without taking away from game quality.
lifebinder Jan 13th 2012 3:52PM
Regarding the email:
I think the real downfall of the Guardian Cub was that demand was limited. Few people are so completionist that they must have every pet on every character. In fact, most collectors that I know only collect on one character. This means that the saturation point is better figured as a percentage of accounts, not avatars, and that absolute number is going to be much lower.
However, selling game time wouldn't have the same limitation; game time is a highly desired commodity, and purchasing one does not preclude purchasing another. Supply will be low and demand will be high. In short, game time could actually kill gold farming, or at least legitimize it somewhat.
Starlin Jan 13th 2012 4:06PM
Mat, isn't Blizzard backing down in South Korea kind of a cop out that the RMAH is gambling? If they really believed it was not gambling they should have fought the issue instead of caving at the first sign of losing a region.
Mathew McCurley Jan 13th 2012 4:12PM
Nah. It's more along the lines of "if we fight this, it will delay the worldwide release by X months, so it's not worth it." Later, they can fight it and see if they can patch the cash out option back in.
Al Jan 13th 2012 5:42PM
That's assuming they're "principle over profit". If they were, they wouldn't be doing the system in the first place.
Phoenix Psaltery Jan 13th 2012 6:05PM
It's not gambling at all, and to claim it is displays a lack of understanding of the RMAH.
As an example, Second Life residents have had the ability to convert game currency into real world funds for seven years, and many players have used that ability to create viable incomes, in most cases as a supplement to their regular incomes, and in a few cases as a full time income.
Of course, the difference is that in Second Life we can actually create original items of our own design, while in D3 it will just be a matter of selling items that have dropped, but I still don't see how this amounts to gambling.
For that matter, if it was, American law would prevent it from going forward, just as gambling casinos were removed from Second Life several years ago.
Hotball Jan 13th 2012 10:01PM
I guess the thinking about gambling is that, by definition, gambling means getting money purely or largely by chance. The problem with RMAH is, most valuable equipments on the AH are mostly got by chance too. So there are indeed some similarities with gambling.
Of course, it's still a gray area, as it's still not the same as gambling, but I can understand why some people may have problem with this.