In Depth With The Diablo 3 Auction House

Why did Blizzard decide to create this system, and how is it going to pay off for them?

Blizzard’s Cut

Of course, these auction houses won’t be free. Blizzard will be charging sellers two separate transaction fees to participate. The first fee will be billed simply for posting an item for auction. The hope, as explained by more than one Blizzard rep, is that this fee will lead members to think carefully before posting every item they have for sale, and to encourage bartering and social trading instead of outright profiteering. In addition, Blizzard will be taking a “nominal” cut of each sale. They have yet to confirm any specific amount but insist whenever asked that these feels will amount to microtransactions.

But…

“It’s not a cost saving effort”

During the press conference, Pardo insisted more than once that the goal with the auction isn’t to pinch pennies or even to monotize Diablo 3, beyond actually selling the game. “I think the microtransaction thing happening in Asia is really interesting,” he said, but added “that doesn’t mean that I think we have the right kind of games to make that model work over here.”

Naturally, it’s a bit difficult to reconcile the idea that these Auctions aren’t intended to be huge cash cows, with the implication that they’re charging fees to make players think twice before selling everything. Further complicating the matter is that Blizzard also intends to distribute a limited number of free listings per week, as a way for players to ‘get their feet wet’ without having to commit to spending whatever the final price point for the auction ends up being. If that sounds familiar, it’s because it’s the business model employed by stereotypical drug dealers hoping to get a mark hooked. The signs seem to indicate that Blizzard wants to discourage outright profiteering and hoarding of items, but that they expect to make some money off of it and are currently trying to figure out the maximum amount they can charge without making it unpalatable for potential participants.

Of course, there’s a complex range of reasons for providing the Auction, from simple convenience and profit, to the lessons they learned on World of Warcraft. The problems with fraud on World of Warcraft are well known. Not only in the gray market trade in in-game goods that led to the creation of the official WoW actions, but in specific threats to individual members. Obviously, by introducing the real world currency auction at the onset, Blizzard hopes to reign in a significant portion of that gray market, but what’s particularly interesting is the rather candid statement that the world side effect of that trade isn’t that Blizzard is being deprived of tiny amounts of money. Apparently, the biggest problem Blizzard has had to deal with is the account compromises of WoW member accounts. “It’s been a shame’, Pardo mentioned toward the end of the conference.

In fact, the shadow of WoW loomed large over the discussion of the Auction. “I think if we dropped the real money auction house into Wow today that would be unfair. But we’re basically saying from the beginning, we’re saying it’s not the same rules here. Part of the rules of this game are different” Pardo said. People worried that this means players with money or the willingness to camp out on the Diablo 3 Auctions will be able to buy themselves into the upper ranks of D3 players might be disappointed by that.

“We’re not making Diablo into a competitive game,” meaning that players will be playing either solo, or in groups to complete the story as written. There won’t be a ranking system providing players with increased advantages against other players as new missions become available. The items available in the game are also distributed totally at random. Even major bosses won’t drop the same items every time they’re defeated. This means that skill rather than level grinding will matter a lot more, a lot earlier, hopefully creating a balanced play experience that ought to mitigate some of the excesses seen on the WoW auctions. Or, as Pardo put it, “because it’s all random items, it’s not going to be necessary to do frequent balance adjustments. In Diablo it’s more likely we’ll be adjusting classes.”

Many gamers might be concerned that this system is going to create a significantly unfair play environment. We already mentioned the restrictions placed on high level players and the inability to purchase items for a character who isn’t a high enough level to use it. Blizzard seems to think these types of restrictions, combined with the fact that Diablo 3 isn’t a competitive game like WoW, will reign in some of those tendencies if not outright mitigate them. When asked point blank if Blizzard has concerns about the motivation of players using the auction, Pardo stated:

I think that even beyond the auction house, people play for all kinds of reasons. They play for status, some play to kill some time, some play to keep up with friends. Certainly, there may be some people that might want to play Diablo (3) to make some money on the side, but hopefully it doesn’t have a negative impact on other players. If it allows more people to play and enjoy the game, then that’s fine.

That sounds well and good, and I can’t foresee any issues myself, but Blizzard is taking a huge risk. Particularly since they are introducing this feature without any market research. When asked about that, Pardo asserted “I feel like we have a lot of passionate gamers that work here. They exist on the development teams so our market research has always been internal. I’m not a huge fan of just going out there and doing surveys. I don’t think that leads you to the next cool thing, it just tells you what people think about right now.”

Fair enough. The cynical take is that Blizzard just wants to turn a quick buck. Then again, short of outright removing player-to-player interactions or item trading and selling as an aspect of gameplay, these kinds of transactions are going to happen. Blizzard might as well make a buck off the trading of their IP. If by taking a small cut of the action and providing a safe space, they’re able to reign in some of the excesses that have come to define World of Warcraft, it’s like we won’t see a lot of complaints from fans.

Simply put, it doesn’t sound like a rip off, just a smart business decision. That said? As with all things, we’ll save our judgment for the final release.

Our friends over at GameRanx don’t have a problem with the Diablo 3 Auction House. Click through and fine out why.

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2 Comments on In Depth With The Diablo 3 Auction House

CHoedy

On August 4, 2011 at 10:48 am

Im going to make a killing playing this game.

Auctoneer Lex

On August 6, 2011 at 5:56 am

I don’t know about you guys, but I’m really excited about the implementation of a real money auction house in D3. However, only the future can tell if it’s good or not. No matter what, I’m definitely going to play D3 – as a monk!