The Lawbringer: Mailbag 10
by Mathew McCurley 
Mar 16th 2012 at 1:00PM
With Mists of Pandaria information on the horizon, players are clamoring for release dates, beta information, and everything in between. People just want something, anything, to tide them over. How about The Lawbringer? We're talking some Mists beta and the Diablo real money auction house. Won't you join us?
Mailbags are fun because the discussion topics come to me. Readers always have some great questions, and I'm more than happy to delve into an answer or two. This week's questions are ones that I get frequently and, with the recent couple of weeks' being newsworthy and fun, emails sometimes get left in the mud. Well, let's answer some emails.
Our first Lawbringer email comes from Toro, who wants to know what's up with Mists of Pandaria beta access that is guaranteed through subscription to the WoW Annual pass:
Hi Mat,
Love your column on wow insider.Thanks for the email, Toro. The World of Warcraft Annual Pass does provide guaranteed access to the Mists of Pandaria beta, but I do not believe that it specifically says when access will be allowed. There are a few factors to consider when figuring out how Blizzard can incorporate over a million annual pass subscribers into a beta at once and what the solution will be.
I have purchased an Annual WoW pass mainly to get into MoP Beta (free D3 is a nice bonus). Somewhere in the T&Cs (or FAQs) for Annual Pass, I remember seeing a phrase "you will get access to Beta as soon as Beta goes live".
Now, recently rumors around Blizzard inviting people into MoP Beta in waves have started spreading.
I wonder how legal is it, as in – if they promised everyone to gain access to Beta as soon as it goes live, then waves (I.e. Delayed invitation, potentially weeks after Beta started) would be illegal, right?
Thank you,
Toro
One scenario is that the Mists of Pandaria beta is going to be very unlike the recent expansion betas, which have been gameplay- and system-focused, versus The Burning Crusade beta, which focused heavily on content. The content-type beta lasted for a much shorter period of time because the core systems were already in place and the meat of the testing was mainly about flow, numbers, and easily managed factors. Betas that introduced vast system changes like the original vanilla beta, Wrath, and Cataclysm had longer beta periods because of the complexity of the new.
The second scenario is that the Mists of Pandaria beta will last for a good, long while beginning soon and ending just prior to release, which would be around August or September. This long beta would allow extensive testing of the new systems and mechanics changes as well as push new beta testers through testable content.
If the first scenario happens, everyone who is entitled to a beta invite gets one over the course of a short period of time, perhaps a wave or two. The beta would last maybe a month or two and feature (just as cleverly demonstrated in the Diablo III beta) a limited amount of Pandaria content so as to not spoil too much of the fun. This locked-off beta would let Blizzard's faithful test the new mechanics and starting areas for a month or so before release, and that's pretty cool.
If we're going the long route, Blizzard will introduce annual pass holders in waves over the course of a few months. You cannot let in over a million people into a closed beta of a game that's not ready to handle the load. If we're half a year out to Mists of Pandaria, there is no way a beta like this is going to be happening. If it is, we're going to see a late 2012 release, which would not be cool. We will most likely see the first option.
Annual Pass wording
As for the actual question you asked me, I took a look through the annual pass stuff and found some of the wording used relating to your beta invite. Here's the actual text from the advertisement splash page for the Annual Pass:
WoW Annual Pass rewards
Access to the Next WoW Expansion Beta Test – Get a guaranteed spot in the beta test for the next World of Warcraft expansion (at a time to be announced in the future).
The only references to the beta test invitation that I could find in the FAQ were discussing transferability and which game you get invited into. For what it's worth, Blizzard is made up of a good group of people who love their customers enough to not hang the beta carrot out in front of you and then give you a week of play time. You'll get content and some time to play through it, if that's your worry. If not, then we can get pretty critical of the whole ordeal. Until then, let's see what the release window holds.
A minor question
Noelwiz the mage has an interesting question regarding minors and the Diablo III real money auction house. I like this question because it is relevant to yesterday's news that Diablo III is actually being released and all of this is not a fairy tale.
Hi, i have a interesting question about diablo 3s real money action house. Will the money i make from it be able to be taxed via income taxes?Thanks for the email, Noelwiz. There are two factors we have to consider to answer this question, but before we do that, I need to point out why I loved Noelwiz's email and it gets answered in the column -- the subject of the email was "For Lawbringer Mailbag 10," which means he is dedicated enough to know we're on the 10th mailbag. Nice.
Also, since i am under 18 and there for not allowed to pay taxes or something along those lines, how will it affect me? Will it be like an allowance where its not taxed, or will there have to be something different. Because if an item sells i cant lose money for the base fees, and therefor i am defiantly making an income.
Finally if there were to be a tax would it matter if i cashed out or left it in my blizzard wallet.
Thanks for the help in advanced and i hope this gets answered in the next mailbag, or a article specifically about this - also im ok if u say im under 18.
From noelwiz, 85 mage on kahz'gorth oceanic.
All right, the question: Well, the first factor is whether or not a minor can create a Battle.net account, which is required to use the Diablo III real money auction house. If minors are not allowed to make accounts, we can all just go home, right? So if minors can make Battle.net accounts but minors are not legally allowed to sign certain contracts and documents, who is liable for the minor's actions in regard to the game?
Minors can make accounts
In the United States, minors can make a Battle.net account as long as their parents have also reviewed and accepted the terms on behalf of the minor. Your parents essentially own your account if you're a minor and are granting you access to it under your own name.
We learned and deduced a while back that one of the easiest ways to see how a problem is being dealt with regarding the real money auction house would be to look at eBay's terms of use because of the PayPal/Blizzard connection. It's not exact, but we can get an idea. Here's what eBay says about minors and accounts:
You must be at least 18 years old to be an eBay member.The best answer to this question is that if you're a minor and you're playing Diablo III, it is very important for you to let your parents know about all the features of the gamem because anything groundbreakingly bad that could happen could affect them. Taxes, money earned, and other financial things should be first discussed with a parent. If you are a parent with a child who is going to be playing the game, please monitor their Battle.net activity and make use of Blizzard's available parental control settings. You don't want to make things hard for your parents, kids.
A person under 18 can use an adult's account with the permission of the account holder. However, the account holder is responsible for everything done with that account.
Make sure you follow these guidelines. If you don't, you may be subject to a range of actions, including limits of your buying and selling privileges and suspension of your account.
If you think another member is under 18, please report them to us. Make sure to include any relevant information about why you think the member is underage. If you have an email from the member, please be sure to include a copy of it.
If you've got questions for The Lawbringer, please send them to mat@wowinsider.com.
This column is for entertainment only; if you need legal advice, contact your 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)
Drakkenfyre Mar 16th 2012 1:12PM
Yes, that's Deathwing smoking a hookah.
It's from a cancelled game, WarCraft Adventures: Lord of the Clans.
It came from a miscommunication between Blizzard and the animation team.
They thought it was cute, so left it in.
That should answer all questions that usually comes up with that image.
shotiechan Mar 16th 2012 3:50PM
What on earth did they MEAN for him to be doing, if him toking away on a hookah was the result of a misunderstanding?
suzurambles Mar 16th 2012 3:58PM
I believe the original wording was something like "We want Deathwing to be smoking", in the "Flame and vapor coming off the body of the dragon." sense.
Instead they got the hookah.
Magma Mar 16th 2012 1:14PM
Every time I ever see someone ask a question and I see they say "I've seen rumors spreading about ____", I have to wonder what they're talking about. I'm very involved in the community, in game, the forums, and I never see any of these "rumors". I have to wonder if a single random uninformed friend of theirs mentioned something and they all of a sudden take that to be true.
Narayana Mar 16th 2012 1:40PM
The idea of a phased beta has been floated on both the WoW Insider Show, Legendary and The Instance. So, there's your rumor mill.
I don't think any of these shows has said "this is how it will work." The discussions have been more along the lines of "they might do it this way." However, just talking about it like that is enough to get people going- especially when that way of doing it is so incompatible with one's own thinking.
Personally, I don't think Blizzard would be able to get away with anything but a wide open invite to all Annual Pass subscribers. Whether they said it or not, the general feeling among the AP population is that beta will be open to everyone at the same time AND that it will function in much the same way as previous betas (i.e. NOT a series of "beta weekends"). If Blizzard goes another way, they run the significant risk of turning something that should be unabashedly good into a PR Nightmare.
Also, I think that Blizzard has numbers that indicate that most people who are invited to be in a beta end up doing little else than playing for 30 minutes to see a few things and say they did it and logging off to avoid spoilers.
JACKALX619 Mar 16th 2012 1:15PM
I dunno if it was answered and I missed it, but what about the taxation portion? Do we need to "claim" any money earned? Just curious.
Nopunin10did Mar 16th 2012 1:35PM
Unless I've read it completely wrong, I don't believe Blizzard will ever let you retrieve any money from your Blizzard wallet.
Thus, it might exist in the Blizzard-space, but you never actually earn any real money. Therefore, no taxes. For all intents and purposes, the "real money" auction house uses money that doesn't actually exist.
When you buy into the Blizzard wallet, you are effectively gifting them the money in exchange for a proxy currency. It is not a real asset. If Blizzard had to shut down the server, they would owe you nothing.
mbison Mar 16th 2012 4:09PM
Last I read you will indeed be able to "cash out" money from the Diablo 3 Cash Auction house.
Thander Mar 16th 2012 5:12PM
It's a gray area, so no one knows for sure. I definitely think you do need to report it if you are cashing out and putting it in your bank account. That is income like any other. If that is your only income, I don't think you would have to report it. You won't make enough money through that to pay taxes.
The IRS says you are only required to file taxes if make over $9,500 or something around that. If you have other sources of income though, you definitely could be over that dollar amount. If your regular salary is $25,000 and you make $1000 from Diablo 3, that has to be reported.
I know there are exceptions for things like garage sales where you don't have to report it if under a certain amount. I don't know if that would apply to Diablo 3 trades/auction house.
Jon Mar 16th 2012 7:11PM
"The IRS says you are only required to file taxes if make over $9,500 or something around that."
Please cite your source.
This is blatantly incorrect, and I encourage anyone reading to discuss tax information with their accountant.
Being a minor does not stop you from having to file a tax return and possibly pay income tax. Neither does making under $9,500. IIRC, the minimum is about $400, though again I highly recommend consulting with a CPA for tax information and not some random Joe Schmo on the internet.
If you make under $9,500 and over $400 but haven't filed a tax return, the IRS would like to have a word with you about paying some interest and penalties.
Thander Mar 25th 2012 10:35PM
@Jon
http://www.irs.gov/individuals/article/0,,id=96623,00.html
If you go through the yes/no stuff:
No special circumstances. (the first page)
Not a dependent.
Single.
Under 65.
Gross income less than $9,500.
"Based on the information provided, you do not need to file a Federal Income Tax return for this year unless you need to receive a refund of payments already made."
Puntable Mar 16th 2012 1:24PM
The annual pass did say "as soon as" for the first day it was available. By the second day, the wording had been changed.
hwacha Mar 16th 2012 1:41PM
I remembered reading that too!
And this, reporded by our dear Wow Insider on October 21st: "You will also gain access to the beta of the next World of Warcraft expansion as soon as it goes live."
I wonder, if I signed up while that phrase was still up, will I get it immediately? ;)
Joe Mar 16th 2012 1:53PM
Well, one thing to consider is that the term "beta" really doesn't have any specific meaning anymore.
So Blizzard could very well have a testing phase of the sort that in the past they would have called a beta, but instead this time they call it a "pre-beta test". And that wording alone is enough to allow Blizzard to not invite the Annual Pass members.
So, as to when you'll get access? You'll get access as soon as Blizzard calls it a "beta"; but there's no way of knowing what they might decide to call a beta.
David.Blake Mar 16th 2012 2:22PM
@hwacha
If you signed up while that text was printed, you would legally be entitled to access to the beta as soon as it was available because this was a term of the wow annual pass contract. This is assuming, of course, that there's not some other fine print which gives Blizz discretion to delay the date.
If you did sign up with this language and Blizzard refused to grant you day-1 beta access, Blizzard would be in breach of their obligations under your contract. If blizzard breached it's contract you would be entitled to:
(a) money damages;
(b) (possibly. see below) rescission of the contract (wherein you are refunded your money and released from your obligation to sign on for 12 months, but Blizzard would also be released from its corresponding obligations); OR (NOT AND)
(c) an order of specific performance requiring blizzard to give you day-1 beta access. (you could only get this if you knew in advance you weren't going to get day-1 access. Obviously, you can't be given retroactive access).
To receive any of these remedies, you'd have to at least send a demand letter to blizzard and possibly sue them if they don't concede to your demand. I see several practical or other difficulties though. First, how do you calculate money damages for a lack of Beta access? $5 per day? $15 per month (same as the subscription fee)? You'd probably never be able to dream up enough in money damages for it to be worth your money (or even time) to sue Blizzard.
Second, if you wanted to go the rescission route, you'd have to prove that Blizzard's breach of contract by failing to give you day-1 beta access was a *substantial* term of the WoW annual pass contract. You could prove this by showing that for you, immediate access to the Beta was a primary or significant inducement for you to sign up for the annual pass (i.e. without day-1 beta access you wouldn't have signed up)
Third, if you wanted to get a court order forcing Blizzard to allow you access to the beta, you'd have to file a motion for a preliminary injunction. You'd have to convince a court that your claim was likely meritorious (i.e. that you have a strong case on paper, which I think you could do if you have a screenshot of the "as soon as it's available" language) you'd probably win) and also that injunctive relief, rather than plain old money damages is the appropriate course of action. I'd say it's a toss-up on whether a court would force blizzard to grant you Beta access.
So, technically, yes you would be entitled to day-1 beta access, but Blizz could most likely easily screw you out of it because it knows the red-tape and logistical barriers to you gaining day-1 access are substantial. If you really took it to a court, though, blizzard would probably just give you beta access as quick as you could. I bet you could get a case on and a preliminary motion before a court within about 1-2 weeks. Once it hit Blizzard's lawyers, they'd probably just give you a beta key and have you sign a settlement agreement making the case go away.
Thander Mar 16th 2012 5:21PM
Yeah, I think the author missed that part of the letter. I think this was the real question: Can a company (Blizzard) change the language of an agreement later on and grandfather the new words to people who signed the agreement before the changes?
cursedmonk87 Mar 16th 2012 1:40PM
Also note that cashing out of the Real-Money AH will require a PayPal account and the same rules as eBay will apply. I haven't sold on eBay/used PayPal in a long time, but I remember it being a pretty serious ToS, and yes if you're under 18 your parents will be responsible for the maintaining and ownership of the account. I think if you're using the AH funds to pay for Blizzard stuff, it's a self-contained system that won't be taxed. As far as transferring over to PayPal, I'm pretty sure it's still tax-free because there will be fees involved in using the PayPal service. I don't know the laws but I don't think the income is taxable unless you reach a certain threshold, and I doubt anyone will reach that cap selling digital swords and armor for real-life pennies. Then again there's bound to be exceptions.
cursedmonk87 Mar 16th 2012 1:45PM
That is, of course, if they actually are going through with the transferable funds from the AH, which personally I find to be imbalanced and game-breaking.
I think it should be self-contained, the real money is people buying the digital "Blizzard money" points and the points you accrue can pay for Blizzard services, so essentially, by playing the game and the AH, other people will be paying for your subscription and such.
Joe Mar 16th 2012 1:49PM
When it comes to the "beta access" that Annual Pass buyers get, my advice is: don't go into it with any specific expectations.
If you can't wait to try out something specific in the Annual Pass beta thing, there's a good chance you'll be disappointed because it's probably not going to be a "full game, here's everything for you to play with" type of beta. It's hard to say what will and won't be in it, but it almost certainly won't be everything.
Don't get me wrong, it will be fun; I'm just saying, try not to build up expectations in your mind.
As to legally what we have to get... well, I'm sure the fine print is such that Blizzard has themselves completely covered so that practically anything they care to do will count as "beta access".
rovingbandit21 Mar 16th 2012 2:02PM
Why is it now days Beta seems to equal v1.0 Demo? Beta used to actually mean something and now its just the way to get demos out without shareware. Some of my fondest memories was swapping floppies with my friends to try new games.