Monday, 1 August 2011

Diablo 3: who wants to be a professional gamer?

And the heavens shall tremble reads Blizzard's Diablo 3 website. Well the games press is certainly trembling today as Blizzard announces that players will be able to sell each other in-game items for real world money in forthcoming title Diablo 3.

And Lo! Lord Pardo decreed that their bank balances shall tremble!

The Washington Post covered this story in their business section, presumably they consider this news may affect Activision Blizzard's share price.

Gamasutra heard it straight from the horse's mouth, Mr Rob Pardo explaining the details in a press conference at Blizzard's Irvine CA office.

Then for the big news. Pardo began by discussing the importance of trading items in Diablo, how it had been done online in Diablo II: via manual exchanges, forum posts, or IRC, and "shady third party sites full of gray market stuff." He said, "We can make it better."

With the Diablo III Auction House, players will have a fully-integrated marketplace that allows them to buy and sell items, gold, and components with real-world currency (tentatively divided into U.S. dollars and euros, among others) in their respective territories. According to him, it's based on the World of Warcraft Auction House, but with refinements. Diablo III's iteration allows for auto-bidding and instant buyouts, smart searches based on class, a shared stash, and secure item transfers.

Pardo was swift to mention that it's not an official "Blizzard Store," but a clearinghouse for players to have an open market to facilitate the trading of in-game items with each other. Players will be anonymous during trades, and there will be restrictions on the buying and selling of goods with real-world currency for those who choose to play in Hardcore mode.

He then outlined initial details of transactions. There will be a fee for both item listings and sales. Should players accept in-game currency, their payment will go toward their e-balance, which covers auction items, WoW subscriptions, and pets. Should players decide to cash out their items, a currently-unannounced third-party payment provider will handle the transaction and take a percentage of the sale. There won't be any limits on item trading, but there will be a 24-hour cooling period before players can resell a purchased item.

Pardo intimated that if Blizzard didn't take the steps to bring e-commerce in-house, someone else would step in and profit from it. "Players want this... We could take a harder stance, but with Diablo, we think [the Auction House] will end up being a good thing," he said. The fact that in-game bartering and selling had "become a metagame of its own," in his words, was another motivator for launching the new feature. 

This post was brought to you by the Activision CEO and the Powers of Darkness.

This move incurs a number of legal risks which I believe Blizzard is prepared for and wants to tackle head on.

This article on Eve Online covers some of the implications that follow virtual money becoming real money.

In particular I would draw your attention to the part where the author discusses the games developer becoming effectively a bank.

Under Blizzard's proposed system a player would send them real money, that they would keep in escrow in an account assigned to the player until s/he found items that s/he wished to purchase whereupon they would transfer money from his/her account to the seller.

If it's a real account with real money in that rather sounds like a bank, doesn't it? Sure it's a bank with rather unusual restrictions but I can put money in, take money out and authorise payments to third parties.

There's also the gambling issue. If I do a Pindleskin run knowing I will probably get nothing but I have a 1 in a million chance of a Windforce worth $2000 then isn't that essentially just a reskinned online fruit machine? Do gambling laws apply?

I think that Blizzard is trying to push back the legal restrictions on what is acceptable. This may result in no one really complaining in which case practices considered somewhat shocking now will become commonplace and can later be defended on the grounds that they are usual practice. They may be bitterly contested by lobby groups or class actions in which case Blizzard is likely to throw an army of lawyers into the arena (and they'll be able to afford to from their cut of all the transactions). Blizzard may lose in court in which case they may try to lobby the legislature for law reform.

It's even possible that Blizzard may establish this as normal practice by buying off court actions by settling them. If what they are doing is enforcably wrong but no cases ever get to court because they always settle then after a while what they are doing becomes standard industry practice, is adopted by their competitors and is suddenly much harder to root out.

It makes sense for games companies to take over the third party market. It wouldn't surprise me if more money has been made on World Of Warcraft by people who are not Blizzard than the company itself. It's worth a lot of money to take control of this business.

Whatever happens the MMO hobby will change. I do think the rest of the industry should let Blizzard be an early adopter in this and let them take the risks. But imagine if in a few years this is a battle Blizzard has won for the developers. Imagine crafting in Prime knowing each master crafted epic is worth $5 real cash that will clear a few days after you sell the item. Very interesting eh?


  1. Given the sheer randomness of the stats on drops, it seem like DIII is an environment where players with tons of spare time stand to potentially make a lot of money selling items off. More paranoid possibilities also present themselves.

  2. I think the big test will be whether they can avoid the duping that dominated D1 and D2. I suspect they will, I noticed very little cheating in WoW.

    I think that's the real reason why the always online requirement is there - because they don't want you to find items they can't verify centrally.

    I don't think item farming is going to be all that interesting. Either duping will happen and everything findable will be worthless. Or it will be relatively fair and legit but with millions of people looking only a few cookie cutter items will be considered worth selling - Windforce, Vampiregaze etc.

  3. I sense this will all backfire horribly. And watch it turn out that much like PayPal, people will be complaining because they won't be able to get their money from Blizzard-Activision-Satan.

  4. Ha ha, is it bad that I'm willing to pay £5 just for the fun of getting indignant at Blizzard and demanding my money?

  5. I suspect the "always online" requirement is just an anti-piracy measure. They could certainly run the game offline single-player, with no trading, and no movement between single-player and games.

    The legal issues are fascinating. Is it gambling? You don't pay any money to pull the handle on the fruit machine. But that doesn't mean they don't have issues - as a web developer I've built websites for plenty of competitions, and here (Australia) you certainly need a permit to run a competition and give away prizes, whether it's a game of chance or skill.

    Speaking of gambling, the "is it a bank?" question actually reminds me a little of my TAB (sports betting) account. I can move money into that account from my credit card. My balance goes up and down as I place winning and losing bets. And I can cash out into a bank account. It's not a bank, but I'm sure there are layers of regulations they need to deal with.

    I'll bet that this feature has caused more work for more lawyers than it has for programmers and artists!! :-)

    If we hear that Blizzard have moved their official business address to the Cayman Islands or some such, we'll know the legal issues all proved too hard. :-)

  6. "You don't pay any money to pull the handle on the fruit machine."

    Yes you do. You pay them $60 for all the pulls you want.

    Or put it this way. If $60 up front then pulls are free is a non-gambling business model can I launch a slot machine game with that business model and avoid gambling laws? If it's only gambling because it's pay per go?

    "If we hear that Blizzard have moved their official business address to the Cayman Islands."

    Ha ha. I wonder why everyone doesn't officially reside in the Cayman Islands.

  7. The "no solo play offline" bit pisses me off in every single instance I find. It's bearable in MMOs because of their nature, but the appeal of a Diablo-type game has never been the MMO-lite flavor of the thing. I'll stick with Torchlight, thanks.

    Still... it will be very interesting to watch and see what happens with D3. I'm not pleased with the potential this has to move the market further into shark-infested DRM waters, but hey, if they don't want my patronage, so be it. Indies to great work, like the humble indie bundle stuff.

  8. "Pardo intimated that if Blizzard didn't take the steps to bring e-commerce in-house, someone else would step in and profit from it."

    "I do think the rest of the industry should let Blizzard be an early adopter in this and let them take the risks. "

    It's not really a new idea though. Real currency for ingame item auctioning has been around for a while in Asian games. Blizzard is just the first big-named developer to copy the idea.

  9. Lisa, that's kinda like saying Ultima Online wasn't a new idea. Technically you're correct but if this goes to plan then the MMO hobby will be radically changed by 2013.

  10. I'm going to have to call shenanigans on the "gambling" thing also. Loot isn't considered virtual currency, let alone real currency, nor is it "intended" to be used as such. It's "intended" to be used to advance your character.

    Yes, you have the option to sell the item for virtual or - in this case - even real currency.

    Would a contest that is giving away an XBox be considered gambling because the winner could "potentially" sell the item? Does a Steam contest that rewards games to your Steam account qualify as gambling because I could, in theory, sell the Steam account?

    There's also more than one way to get virtual items (gear drops). You can buy off the AH and (try to) sell it at a higher value - possibly making RL money in the process. Items can be given by friends, etc. The item has to come frome somewhere, I understand that but to simply say random loot -> RL money = gambling, seems wrong.

  11. Yup I think you're probably right but we won't know for sure until it goes to court (which may never happen).

    Here's part of the definition from an online dictionary:

    gam·ble (gmbl)
    v. gam·bled, gam·bling, gam·bles
    a. To bet on an uncertain outcome, as of a contest.
    b. To play a game of chance for stakes.

    Definition 1.b. sounds pretty close to what you will be doing magic farming. It's a game, it's a game of chance, so the only issue is are virtual items worth potentially thousands considered "stakes".

    That's defined as :
    "a. Money or property risked in a wager or gambling game. "

    I think it's property but it's not risked. You don't have to pay Blizzard a Windforce if you don't get one.

    A clever lawyer though could argue that the $60 price of the game is effectively a "stake" and the risk is whether the chance of the game gives you enough items to sell to cover your $60.

    We won't know for sure until there's case law or very specific statue law.

  12. There's already something similar - Premium Bonds are a savings product in the UK that don't pay any interest - instead, every £1 invested in Premium Bonds is entered into a regular prize draw. Unlike a lottery ticket, if you don't win yuo don't lose your stake - you are entered into every prize draw until you decide to cash the bonds in. That would be identical to buying your $60 game and having multiple chances at getting sellable loot.

    As far as I know, Premium Bonds have a specific legal exemption from the gambling laws because they are a government-sold "investment" product. No bank or other financial company operates anything similar, which makes me suspect that they're not allowed to. Which menas that Blizzard could be seen to be messing with a government owned monopoly, at least in the UK...

  13. I think that's a bit of stretch. I don't think many people would equate playing Diablo 3 with owning premium bonds. Nor do I think the government is possessive about it or has a monopoly - every newsagent sells scratchcards which are much closer to a competing service (although of course you don't retain your stake).