Tobold's Blog
Monday, August 01, 2011
 
Blizzard invents a new business model

If you thought that monthly subscriptions or Free2Play games were the only options to monetize a game, Blizzard has news for you: In Diablo III Blizzard will not sell you anything, but will take a cut from players selling each other virtual items for real money. The goal is to offer players the RMT they want, without enabling third parties to profit from it. By not selling things they can also believably claim that the game isn't designed around item sales.

Rob Pardo also said something about the release date of Diablo III: "We're working hard to get to this year, but it's going to be tough. So it either makes this year, or it falls into next year." Translated from company speak this means Diablo III is certain to come out next year.

Some people won't be happy to hear that Diablo III will only run when connected to the internet, even if you are playing the single-player game. I assume this is a necessity for a game with secure virtual items for real money trade: You do not want to have the information about the virtual items client side, where they can be manipulated. Duping gold in Diablo I was possible, but in Diablo III it would create major legal headaches.
Comments:
SOE has been doing this for years with the Station Marketplace.
 
it's the appstore model - profiting from being the marketplace
 
I should be noted thought, that it is very similiar to an appstore model, it still is limited to exchanging items that are in fact never own by either the selling or buying party, and always the property of Blizzard. This is precedential and yet another step in a some direction that sounds either awesome or very scary.
 
Well this model isn't like the appstore from Apple.

In the appstore you buy something to someone who made an application. Here in fact you only pay for the time they spent to get the item.

I see this more as a way to get rid of (or control?) the gold farming market.
 
How are going to overcome the fact that a big chunk of their customers are below the legal age for gambling? This is horribly irresponsible of blizzard and likely to attract the regulation and taxation of big brother.

http://asteriskcrusade.blogspot.com/2011/08/diablo-3-auction-house-to-trade-in-real.html
 
This is one of the worst ideas i'v ever heard of. I admit I'm not a fan of the free2play model either but but this? Why don't they just charge us per minute to play all their games? What happened to buying a single player game and getting the whole game, and nevery having to pay anything for it again?
 
"What happened to buying a single player game and getting the whole game, and nevery having to pay anything for it again?"

Steam and people who irresponsibly buy their games there changed the industry.
 
Why would it be irresponsible to buy a game from Steam? You could argue that we getting nickled and dimed with DLC content is the fault of people buying that DLC content, but Steam has nothing to do with it. Oblivion's famous horse armor DLC which started the trend wasn't on Steam, and lots of other DLC systems aren't on Steam either.

I'd say the main reason that soon we will only be able to buy games with internet connection and a login somewhere is software piracy.
 
Asterisk: Steam and people who irresponsibly buy their games there changed the industry.

Wait what? How is buying from Steam irresponsible? How does Steam even have anything to do with this?

Honestly, I don't care too much about RMT. I definitely would prefer it to be kept behind the scenes rather than blatantly open, but you'd be a fool to deny that this stuff goes on even in D2.

The thing I just find even more egregious is the lack of offline single-player. D2 already had the solution for this: offline/"open" characters (saved to the player's harddrive) are segregated from online/"closed" characters (which are online only, and saved to Blizzard servers).

The only necessity it's for is that it's basically Ubisoft-style "online only" DRM all over again, which I think is a huge mistake, but sadly one that won't be protested, because Diablo 3 has a much bigger audience than Ubisoft games on the PC.
 
If it helps minimize cheating, I can live with it. I might even buy something here or there for small amounts of money.

Negative effects I can think of is that large numbers of professional farmers will now set up shop in game, and this will lead into making public games more of a chore. If any item drops that is worth real money, no one will hesitate to take it.

Is it still the same old loot system? Whoever clicks the fastest?

Good points above about underage people and tax issues.
 
This sort of model nicely negates piracy by forcing players to stay connected to a main server. It also acknowledges gold selling and puts it under the control of the company and players, rather than having it be run by a bunch of hackers from China.

I don't really see FTP and this sort of thing as a bad thing. It encourages the company to keep games lively and active. Whereas the old box model encouraged companies to pump out endless, slightly improved sequels every year. Lower up front costs with subscriptions or other ongoing charges is the wave of the future for all software and services, not just games.
 
As Tobold said, the "always online" feature is something to prevent piracy. Which will probably NOT work, since the cracking scene seems to be able to work around almost anything that even resembles a DRM.

End result: Original copies of the game full of DRM, pirated copies usually have all that stuff ripped off, making the (stolen) copies even more attractive.

I know people that buy strictly original games and then crack them, if only to get rid of all the annoying crap the developer put in for authentication.
 
DLC is about getting every last dime from already existing customers. My experience with Steam has been making it easy and cheap enough to bring in new customers, the exact opposite. It is, of course, just one data point, but I've probably spent a couple hundred at least, that I would not have otherwise, which means more profit for the developers without them needing to actually develop more content as they would need to with DLC.

@Asterisk: The gambling aspect can potentially be ignored since as I understand it, there is no potential for loss, not counting time. Taxes may be an issue, but only when the item is actually sold, since until then it's a worthless bunch of pixels rather than something with any definite value. Blizzard could build-in some way for individuals to pay the tax automatically, but that may be too complex for them, and without it the sales may be too small and too dispersed for the IRS to spend time on it.
 
@Asterisk:

Rob Pardo states in this interview (http://www.joystiq.com/2011/08/01/diablo-3-to-feature-player-to-player-real-money-auction-house-fo/) that apparently this isn't "real" gambling, since you're not technically paying money on chance, but the foregone conclusion results of said chance. It's a fine line, but I'm sure one their lawyers have pondered over for a long time

@Lyranthe
You're getting the whole game with your purchase. The chance for all these items to drop are still there, it's not like Blizz is selling levels or DLC modules. Its the players who will be moving and regulating content, not the developers
 
Lyranthe, I find it interesting that your immediate reaction is "Diablo 3 will cost me more money because of this."

Whereas many people (myself included) probably looked at it and thought "Diablo 3 will pay me money to play because of this."

Although, having said that, I expect the vast majority of items to be unsellable (due to supply exceeding demand for all but the rarest perfect items), so rather than "get paid to play" it will be more like "play, play, play, play, play, maybe one day win the lottery and get an uber-rare drop" (which you can cash out for like three bucks).
 
Read the disclaimer on Steam. You do not own the game if you buy it from them. They own the rights.
 
Well I'm not convinced "piracy" is anything other than a marketers pitch to hire the security firm he is working for. I'm one of those people who believe that piracy actually causes a net benefit to the producer.

Buying from Steam is irresponsible because if it is successful (and it really aleady is) then many industry/publishing practices will be retooled and I think that will be bad for gaming. There are other download platforms that have better practices.
 
Read the disclaimer on Steam. You do not own the game if you buy it from them. They own the rights.

If you buy software in a box, you don't owe it either, you just acquire a license to use it. If you would actually own the game, copying for your friends would be legal.
 
@Ilaneth

The loot system was announced over a year ago. Apparently in a multiplayer game each player gets their own loot. ie: if a boss drops a sword and two shields for me, my friend might see a hammer, platemail and a rune. No chances for ninjaing, and completely compartmentalized.
 
I am not seeing what the big deal here is.

Nobody is forcing any body to use either of the AHs. If you do not like that it is there, just don't use it.

Not having an AH didn't seem to affect most D2 players.
 
As soon as RL money can be transferred between between players, it opens up the possibility of charging for in-game services. Want me to run you through that dungeon? Buy this trash item from me on the AH for $10, please!

I expect they'd take the next step and add direct cash-for-service infrastructure soon enough. I've previously suggested there could be a market in boosting, so I am not surprised by the direction this is heading.
 
I don't know how you can say piracy is made up by security companies. Go to thepiratebay.com. You'll see tens of thousands of people downloading games. Even if only 2% of the people downloading the game would have bought it, it's still a serious revenue drain.

This model will be difficult to pirate (you can't fake a registration code because it is being checked, and if you steal it the real owner will get pissed when he can't play and complain), but even if you could, the pirate will still end paying if he wants to engage in the game economy.
 
"Read the disclaimer on Steam. You do not own the game if you buy it from them. They own the rights."

In America, the law works through a systems of checks and hurdles. Just because 15 lawyers and a lobbyist say "this is legal" doesnt mean that the law is sound. Many "laws" make it to the books only to be struck down later from challenges.

"Nobody is forcing any body to use either of the AHs. If you do not like that it is there, just don't use it."

The issue is the mixing of entertaining rewards with real life consequences. Games are markets toward young people who often arnt educated/equipped to make responsible choices. Openning this door could lead to Big brother forcing Blizz to actually enforce the age restrictions on the game.
 
The Problem I see with the AH system is the correllation between ingame gold and real currency. You will be able to sell gold for $$$ with players setting the price. You will have busy little monkeys farming way more gold than a normal player can, driving gold price down. After a while everything that lands on the gold AH will cost so much gold, that normal players who don't farm their ass off will be driven to spend $$$ either to buy gold or items from the currency AH. Good for Blizzard, bad for me.
 
You will have busy little monkeys farming way more gold than a normal player can, driving gold price down. After a while everything that lands on the gold AH will cost so much gold, that normal players who don't farm their ass off will be driven to spend $$$ either to buy gold or items from the currency AH.

Won't happen. Because the busy little monkeys will farm items as well as gold, and also will be item sellers, keeping prices low.
 
4c22cb52: I don't know how you can say piracy is made up by security companies. Go to thepiratebay.com. You'll see tens of thousands of people downloading games. Even if only 2% of the people downloading the game would have bought it, it's still a serious revenue drain.

Piracy isn't as simple as people stealing because they want to. One recent study has even shown that the top pirates are also the top content buyers.

http://torrentfreak.com/suppressed-report-found-busted-pirate-site-users-were-good-consumers-110719/

Perhaps people are pirating because there's so much crappy content out there that they use piracy as a way to demo content. Others simply don't have the money, but will buy the content when they do.

Watch Gabe Newell's take on Piracy:
http://www.youtube.com/watch?v=pLC_zZ5fqFk

That's why I feel that piracy is hardly the issue people make it out to be. Certainly it's a possible problem, but when you, as a game creator, worry more about some random person on the internet experiencing your game for free than actually creating quality content, then that's when you've failed.

@Asterisk: This is also why I have trouble understanding your position against Steam. Gabe Newell has taken a rather pro-consumer stance for its service, and the service it provides has treated me extremely well.
 
@Asterisk: This is also why I have trouble understanding your position against Steam. Gabe Newell has taken a rather pro-consumer stance for its service, and the service it provides has treated me extremely well.

Steam does seem to provide a quality service to its users..its legions of fans can attest to that..but many content individuals does not a healthy market make. Mcodonalds and Walmart also serve billions of happy clients..largely with ease of access improvements..but were they good for the overall direction of the food or retail industry?

Steam promotes draconian DRM, kills the small business land stores, strangles development of boxes and tends to promote irresponsible deals with large corporate publishers (2kgames to name one)

Id steam is succesful things will be worse off for gaming industry as a whole even if individuals benefit.
 
You can play games on Steam in offline mode. So I have problems to understand how exactly their "draconian" DRM is hurting you. Unless, of course, you were planning to pirate their games.

The "strangles the development of boxes" you just made up. And the last part is just the opposite: Steam promotes indie games far more than shops selling boxes ever did.
 
"You can play games on Steam in offline mode. "

This is like the debate whether birth control is killing human. You cant play or patch the game without Steam. Thats the problem. Other down loaders just put the game on your hard drive Supporting lack of choice for everyone is irresponsible consuming even if the choice isnt important to you.

Steam strangles the development of boxes and indies buy using their market muscle to sign products elusively on Steam.
 
1) The amount of self space that local stores dedicated to PC games was shrinking monthly long before steam. Steam has no effect on them, and if it didn't exist you'd see a lot more people worrying that PC game was dying altogether. The local shops make their money on selling and buying used console games. Not something Steam can do effectively. If you're worried about local shops, Gamefly should be your internet bete noire.

2) Steam encourages lots of small, interesting games. Games that you would never exist in a box-only market, because a 15 dollar game that appeals to 1% of gamers takes up just as much space as COD 25: The Black Ops of WW2 or w/e. In short, it's the answer (and maybe the cause) of the sequel obsession of the big game houses.
 
I'm aware of the "people who pirate a lot buy a lot" argument. Hell, I've been pirating since Napster was hot shit. I can tell you that the amount of $ I spent on music took a steep steep nosedive.

Assume you are a mediocre game developer. Would you really want people getting full demos of your crap game? Of course you wouldn't. It would hurt sales. (this is why the music industry bit it so hard; their whole model was taking one hit song and selling 12 tracks of tripe with it)

It may not bother you that bad to mediocre games are punished by piracy. It does bother the people who make games. And since 90% of everything is crap, it hurts the overall game industry (since by definition half of all games will be below average, and the majority will not be excellent).

Steam makes a lot of sense for everyone involved.
 
The RMT doesn't bother me as it's already happening in similiar games just not through the publisher. And in this case the transactions are all between players.

What I do really hate is the constant connection requirement. While we'd all like to believe that you can always have a perfect hiccup free connection that just isn't reality. And if for some reason my internet breaks down for a day I don't want my Single Player games being disabled as well. In the end I imagine I'll download a crack to work around the requirement just for rainy days.
 
4c22cb52: Assume you are a mediocre game developer. Would you really want people getting full demos of your crap game? Of course you wouldn't. It would hurt sales. (this is why the music industry bit it so hard; their whole model was taking one hit song and selling 12 tracks of tripe with it)

It may not bother you that bad to mediocre games are punished by piracy. It does bother the people who make games.


You're right. I don't care that bad games are punished by piracy, because they're bad and they're not worth the money. You know what will get my money? Turning that mediocre game into a great game. As a mediocre game developer, you by definition have room to grow and become better.

And since 90% of everything is crap, it hurts the overall game industry (since by definition half of all games will be below average, and the majority will not be excellent).

I would say that allowing mediocre game developers to fester and continue to create bad hurts the overall game industry. Have you ever met a person who is negative all the time and never changes? That person will drag everyone else around them down as well.

This was actually cited as the cause for the collapse of the game industry in 1983: there was so much shovelware and lack of quality control for the Atari 2600 that it caused consumers to lose confidence in buying new video games.

Anyways, it's a moot point. The PC game industry has still in spite of all this rampant piracy (or maybe it was because of it). 2010 was a record year (growing 20% over the previous year), and is predicted to continue that growth.
 
Psychotiz, you're missing my point.

You can't get rid of mediocre games. Just can't be done. And being mediocre doesn't mean the game is worthless.

Why? Because if you killed off the bottom 90% of games, then guess what? What was once in the top ten percent is now mediocre, by definition. You can't beat it; any industry is going to have a spread of products, from bad to good to great.

If you sap the profits to be made with mediocre products, you're going to end with a top tier product that has to carry the whole industry. Given the weight these products carry, you won't see innovative or risky games; you'll see a lot of sequels based on successful franchises.

Been to the movies or a game store lately?

I've been playing Warband: Mount & Blade recently. It's a really fun game (to me). For $15 bucks, it's awesome. If I paid $50 for it, I would be f'ing furious. In a lot of senses its a cheap, mediocre game. The graphics are horrible. But it's fun in its own way. In a Steam free world, games like Warband wouldn't exist. That would be a real shame. That's the beauty of steam.
 
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