Auctioned Off

Diablo III released on PC in May of 2012, and the fan response was mixed to say the least. For everything Diablo III seemed to do right, it did some other thing wrong, and often for what felt like disingenuous reasons. It forced you online under auspices of enforcing some kind of co-operative sense of community, but many players interpreted it as heavy-handed DRM. It offered a skill and progression system that felt unfamiliar and unnecessarily reductive. And — perhaps most egregious of all — it offered and even encouraged a separate auction-house system where players could buy or sell items for in-game or real money.

Those who experienced Diablo II probably understand at least why the Blizzard team was looking into alternatives. Not only was the act of picking up loot and getting equipment in any cooperative game a cutthroat and largely unfair proposition, there was endless abuse of the limited system that fostered a hazardous black market.

Players, however, suggested from the moment that the Auction House was discussed that the whole point of Diablo was to kill monsters and find loot, and that the very nature of the AH would undermine that fundamental point of the game. It’s been 18 months, and at last, Blizzard has conceded this point and laid out plans to bring the Auction House to an end in March of next year.

But, I wonder on news of this announcement: If Blizzard had it all over to do again, would they actually do anything substantively different? Is this year-too-late decision the mea culpa that a lot of players have been waiting for, or a half-hearted gesture to excise a system that has finally stopped being profitable?

If I were a betting man (and I am), I’d be willing to wager that over the past six months the marketplace has stopped being a cash maker, and instead is becoming an unnecessary and possibly expensive distraction. I can only imagine the resources necessary to update, maintain and host that kind of tool, and if people are less and less likely to use the part of the service that provides direct revenue through fees to Blizzard, then the enthusiasm at the company for sustaining this money sink that consumers don’t even like must have become very low.

I realize I haven’t cracked some secret code or exposed a grand secret here. Essentially this would just mean that a business is making a business decision based on business conditions. Oooooh, scandal!

It’s conjecture, of course, to suggest that Blizzard is just doing away with the Auction House because they’ve squeezed out whatever money was there and now will simply throw away the empty husk — maybe generating a little customer goodwill in the process. After all, Blizzard has demonstrated many times over the years that they are genuinely interested in crafting a valuable gaming experience and refining their products over time to adapt to the changing expectations of players.

And, though players may have expressed dislike for the Auction House, they didn’t dislike it enough to not buy or play the game. Diablo III might not be the hallowed titanic game that its direct predecessor was, but its more than 12 million units sold in 2012 alone is certainly nothing to sneeze at, and after a year and a half it is still extensively played with no shortage of people dropping hundreds of hours into the game, waiting for their own epic drop. And, grudgingly or not, people used the Auction House, though not always with real world money.

Though the first month was a kind of Wild West frontier in the Diablo III commodities market, in the long run the market very much stabilized and skewed dramatically in favor of the in-game gold marketplace. Tales of $250 transactions for some lucky rare item became less and less common, and because both markets sold the same goods with in-game gold becoming increasingly easy to acquire, there was no compelling reason for people to spend cold, hard cash on gear.

I personally made off in the early days with around $60 in real cash from selling and trading on the RMAH (Real Money Auction House), effectively making the game a free-to-play affair for me. It’s hard to feel too frustrated with a system that allowed me to pay virtually nothing on a game I ended up spending days playing.

Even in that light, though, instinctively I joined an underlying sentiment that felt like the Auction House was a distraction — an ugly and unwanted mutation to the shape of the difficulty curve. Running Inferno-difficulty dungeons was no longer about trying to find that legendary piece of gear I could use. It was now about min-maxing the runs so that I could have the best chance to get a broader range of gear I would never use but could sell for gold to someone else. I wasn’t playing the game to equip my own character, but rather playing the game so I could afford to buy my equipment somewhere else.

While it might be tempting to feel like gamers are vindicated by the decision to close the Auction House, I’m not sure they have been. If the financials worked out on the aggregate, and the Auction House made a profit for most of the time it was up, then I don’t necessarily think Blizzard would have done things differently. Yes, they are saying now that the Auction House fundamentally changed the way people played the game for the worse, but does that mean they wouldn’t still do it again the exact same way?

I don’t imagine for a second that they’ve been sitting around for the past year and a half high-fiving each other over what a great experience it provides for the player, and only just got the memo. I’m not under the impression that Blizzard is so slow to the punch that they’re just figuring out the negative impacts of the Auction House now after 18 months. And now that they’ve publicly identified this problem, I can’t help but notice that they aren’t talking about fixing it for another six months.

I feel cynical when I think about it, and cynical isn’t a place I like to be. It feels a bit like when my ten-year-old, who is hungry all the time now, goes into the fridge, eats most of a treat I’d been saving for myself, and then later points out that he shouldn’t have done that. Well, that’s great, but you did do that, and frankly I think you’d do it again, because I think you knew it was wrong from the start and made a calculated decision that you could live with that. After all, getting a treat and feeling a little guilty is probably better than not getting a treat and feeling hungry from the moral high ground.

Which, of course, brings up the question: If I were Blizzard, would I have done it any different than they did? What call would I make if someone said, “You can do this thing that will provide possibly millions of dollars in revenue over an 18-month lifespan, and though you will deal with a slight loss of player goodwill you will still sell 12 million copies of your game. The only real downside is that it will make the game slightly worse.”

Would I put in the Auction House myself, and show up a year-and-a half later saying, “Oops, sorry. That might’ve sucked for you guys a bit. Well, no more, kind customers! Enough is enough! We are definitely getting rid of this thing that is not fun for you as soon as possible. Which is to say in six months. Probably when it finally stops making us money.

“Again, we’re sorry.”

I’m not sure if I would make that call or not. Would you?

Comments

Aaauughh, how do you manage to put what my brain has inside into outside words that explain it >_<

Yup

They knew early on that the AH ruined the Skinner box, but probably hoped it would make enough money to make up for it, but Diablo 2 had an enormously long tale. It sold for $30 for years and years and it still sells for $20. That's silly for a thirteen year old game. Yes they sold 12 million copies, but after the luke warm reception I imagine sales dropped off in a way most Blizzard games don't.

They want to sell expansions, so they need to make Diablo 3 a game worth picking up in 2014 which means they need to fix it's more glaring problems. They are fixing the loot system (see the console version) and by getting rid of the AH they are giving players a reason to actually try to get loot. Blizzard certainly has shrewd business people on the payroll, but they also have very talented and passionate designers. I'm glad they finally realized how bad they f*cked up Diablo 3 despite selling tons of copies.

I don't think the delayed AH removal has all that much to do with squeezing cash out of it, but more to do with the timing of the expansion. They remove the AH and put in the new loot system, all the people who bought it at launch come back to check out the changes creating buzz for free. A month later they release an expansion that honestly looks kind of cool, but fairly thin on content and it will sell much better.

I was glad to hear this news!

After I had played Diablo 3 for a while, the AH kind of ruined the game because a big part of the game was (obviously) obtaining better loot, and (at least in pre-Inferno difficulties) upgrades to any piece of gear I would find while adventuring could fairly readily be had on the gold AH.

So unless I pretended the AH didn't exist, there wasn't much point to the "regular" gameplay, because after visiting the AH, I was even less likely than normal to get a loot drop that was better than what I already had equipped.

I might jump back into the game after this change goes live.

Mean Red Worms wrote:
They want to sell expansions, so they need to make Diablo 3 a game worth picking up in 2014 which means they need to fix it's more glaring problems.

You are spot on.

The auction house and loot changes have worked a minor marketing marvel on me. Despite my effort to stay in a rational, critical place (a place I prefer to be), this announcement carried me directly from "Diablo 3 is non-functional" to "so... how much for the expansion?".

The effects of the AH on the game did a lot to make me stop playing, just as the RL money side opened up. Considering how many hours I put into Diablo II, hell, into Path of Exile, that says a lot. Removing the AH, rebalancing the loot drops to reflect that, and modifying the crafting system to make it worth doing, all need to be done.

But...

So, the AH is bad, and the good people at Blizzard are getting rid of it... in six months. Denmark. Rotten. Something.

I'd have made the game better from the get-go.

It was now about min-maxing the runs so that I could have the best chance to get a broader range of gear I would never use but could sell for gold to someone else.

I probably don't know well enough how the loot is generated in D3. How does min-maxing your character affect the loot?

On the whole topic -- I thought that the AH was exactly the kind of real/in-game economy symbiosis which Neil Stephenson described Reamde. Those who want to farm, farm, and those who want to breeze through the game, pay the farmers in real currency. It is interesting that the real world implementation proved this symbiosis unsustainable. Or maybe Blizzard just didn't strike the right balance of grind and fun to make this arrangement acceptable to a critically large part of the players base.

I probably don't know well enough how the loot is generated in D3. How does min-maxing your character affect the loot?

You don't min-max to improve your ability to get a specific loot drop, but you do min-max to improve your ability to quickly move through an optimized loot run.

The idea is not to find a strong single item, it is to get a large number of promising mid-range items and then sell them off. So, the point becomes to min-max against efficiency and speed, creating very specific stats and skillsets.

Gorilla.800.lbs wrote:
I thought that the AH was exactly the kind of real/in-game economy symbiosis which Neil Stephenson described Reamde. Those who want to farm, farm, and those who want to breeze through the game, pay the farmers in real currency.

I haven't read that one, but I would argue there is a third category: those who want to play and be challenged by a game's core mechanics, and not concern themselves with the economy. In D3, the core game and the economy were too tightly coupled to allow that option.

I stopped playing Diablo 3 before I ever hit the "loot wall" - I beat Normal mode a couple times, and got most of the way through a Nightmare run, and that was enough for me - and I felt like I got my money's worth, so I'm not particularly upset about the auction house nonsense even though I understand the reasons it sucked.

That said, I'm really glad they're taking it out and revamping the loot system for the expansion. Makes me considerably more excited about picking it up, and who knows, maybe I'll revisit the base game too.

So, did they do the right thing? No, probably not initially. But it didn't seriously harm my enjoyment as a casual fan of the franchise, so I can't claim too much umbrage about it.

I'm looking forward to hearing Weekend Confirmed this week to get Garnett Lee's comments. He was against the RMAH from the moment it was announced, and I remember the discussion on the show getting pretty heated, as he was adamant it would hurt the game while others didn't think it would be a huge deal. Sounds like Blizzard has admitted he was right after all.

The question in your article is complicated by the Bizzard/Activision relationship. How much of any of the Auction house decision is Bizzard itself, and how much is Activision saying "thou shalt"? I can easily imagine Activision doing exactly the same all over again, and am less convinced Bizzard would. Based of course on impressionable gut guesswork, as opposed to any rational analysis.

Ravenlock wrote:
I stopped playing Diablo 3 before I ever hit the "loot wall" - I beat Normal mode a couple times, and got most of the way through a Nightmare run, and that was enough for me - and I felt like I got my money's worth, so I'm not particularly upset about the auction house nonsense even though I understand the reasons it sucked.

So, did they do the right thing? No, probably not initially. But it didn't seriously harm my enjoyment as a casual fan of the franchise, so I can't claim too much umbrage about it.

The thing is, even as a casual fan, it screwed you too indirectly, because if the item treadmill had been properly designed from the start, you'd have kept going "Man, this axe is awesome! Look at how much more it does than my previous axe! And it plays so different! gotta keep playing to find something more interesting!".

Instead, you got items that made you go "eh, I guess I finished the Easy mode, if the game is just more of this, except with bigger damage numbers, I'm done".

And that's before getting into all the ways the game was patched to discourage bot-farming (which never worked anyway)... Yes I played this way longer than I should have u_u

Mousetrap wrote:
The question in your article is complicated by the Bizzard/Activision relationship. How much of any of the Auction house decision is Bizzard itself, and how much is Activision saying "thou shalt"? I can easily imagine Activision doing exactly the same all over again, and am less convinced Bizzard would.

Responding to the part I bolded: If we were talking about pre-WoW Blizzard, I might agree. The way I see it, the post-WoW Blizzard is quite different than the old Blizzard I knew and loved, Activision buyout or not.

When AH was announced, my interest in the game dropped below zero right away.
Glad they got rid off it! Might have a look at it now.

I'm glad they're doing this, but like others, also understand why they tried in the first place. On paper it looks great to be bringing into a safe and secure system you can tax something that players are doing on their own anyway.

Unfortunately, while the latter still represented a kind of loot wall, it was largely indirect to a lot of the D2 players in its heyday. Meanwhile, in D3 it introduced it as an eventual requirement almost right away.

I attribute all this to a trend in video games I'm not a big fan of, this idea that all game designers must now include monetization schemes in all levels of the design process. It's not good enough to generate box sales anymore (especially if you're not even offering that). Nowadays even the biggest publishers with the strongest track records must be thinking ARPU and ARPPU and designing ways to get players to continually pay.

Ok, so maybe not so much a trend per se, but rather a return to form. The money folks would love nothing more than a return to the days of Pinball and Arcade machines, especially when they can rely on gamers to now provide the hardware themselves

This announcement has rekindled my interest in Diablo 3. I think the removal of the Auction House for a remodeled loot system is a very good move to attempt to reignite that feeling of a well earned reward, not only for time played, but the difficulty of certain areas and enemies defeated. Also, that childlike ecstasy when chance was on your side and luck smiled upon you with an earth shattering drop at an unexpected time. Diablo 3, in my view, certainly lacked that feeling of achievement, and a sense of well earned progression while the Auction House was an option.

Yes. The AH was an option, an option that could be ignored, but when every other player around you was constantly kitted out in ever changing top notch gear, forging onwards with ease while you were not exactly pulling your weight curtailed the enjoyment, and blotted out the sense of belonging, for lack of a better word. That made it difficult to maintain a stand-off with the AH.

I spent a fair share of time in the Auction House towards the end of my time with Diablo 3, both buying and selling items, for in-game currency. I also spent a fair share of time idle while waiting for friends to finish up in the Auction House towards the end of my time with Diablo 3. It most definitely played a part in my lack of desire to log-in as time progressed, until I eventually forgot about the game altogether.

I had washed my hands of Diablo 3 after a few months, where-in I had completed normal mode once, started a few different classes but never further than the second act, and ventured into the early stages of a single solitary nightmare run. Compare this to my love affair with Diablo 2, and it's a world apart. I played Diablo 2 on a daily basis, for years.

The AH was not the only cause for a diminishing return on enjoyment, but it was one of the main contributers to it. This is why I am pleased with the news of its pending closure, while also considering a return to the game as a result. I'm also intrigued to see if the difficulty has been tweaked (to be more challenging) and if the skills have evolved (to be more viable across the board).

Even in that light, though, instinctively I joined an underlying sentiment that felt like the Auction House was a distraction — an ugly and unwanted mutation to the shape of the difficulty curve. Running Inferno-difficulty dungeons was no longer about trying to find that legendary piece of gear I could use. It was now about min-maxing the runs so that I could have the best chance to get a broader range of gear I would never use but could sell for gold to someone else. I wasn’t playing the game to equip my own character, but rather playing the game so I could afford to buy my equipment somewhere else.

This sums up my experience perfectly. Once my bags were full of crap I couldn't use but might want to sell someday maybe on the AH, and all my auction slots were full and had to be monitored and rotated whether I was playing that actual game or not, I gave up pretending I was involved in any type of epic battle against evil, and that right there was all she wrote.

Get rid of the always-online requirement and we'll talk.

And, though players may have expressed dislike for the Auction House, they didn’t dislike it enough to not buy or play the game.

Some of us avoided it.

Diablo III might not be the hallowed titanic game that its direct predecessor was, but its more than 12 million units sold in 2012 alone is certainly nothing to sneeze at

Where D2 moved more than twenty million units in a much smaller computer and gaming market.

and after a year and a half it is still extensively played with no shortage of people dropping hundreds of hours into the game, waiting for their own epic drop

Yet, if your guess about why it's closing is accurate, not enough.

I wasn’t playing the game to equip my own character, but rather playing the game so I could afford to buy my equipment somewhere else.

Which is confirming what the detractors were saying, that the AH would screw up what made the earlier iterations great. It seemed nearly certain that this would happen, that the drops would be tuned for maximum Blizzard revenue, not maximum player enjoyment, and what you're saying there is a strong confirmation that this was an accurate prediction.

The game, very simply, would have been better with no AH. The existing trading systems in D2 worked well, but Blizzard wanted a piece of that action, so they screwed up their game to get it. In trying to force their way into that market, they destroyed the market itself.

People are still trading D2 items. Not that many anymore, but there is still a market, and the game still has a little life left in it.

We'll have to see what happens with D4, but I think Blizzard is busily burning their bridges. They still sold lots of D3, but not that many people were all that educated about what was going on. Now that 12 million people have been, to greater or lesser degrees, burned by greed, will they pony up again for D4?

Malor wrote:
And, though players may have expressed dislike for the Auction House, they didn’t dislike it enough to not buy or play the game.

Some of us avoided it.

Put me on that list, too.

Back in the early naughts (2000-2004 or so), I was a big Blizzard fan. I played a lot of D2 (and its expansion), Warcraft 2 (Battle.net edition), a good bit of Warcraft 3, and to a lesser extent, Starcraft. From my perspective, WoW seemed to have changed Blizzard for the worse. The design decisions made (or at least revealed) late in the development of D3 (linear skill unlocks, RMAH, and always-on DRM) was all the confirmation I needed to know that the Blizzard I once knew and loved was no more, and that I was effectively no longer their target market.

Delmarqo wrote:
Nowadays even the biggest publishers with the strongest track records must be thinking ARPU and ARPPU and designing ways to get players to continually pay.

Ok, so maybe not so much a trend per se, but rather a return to form. The money folks would love nothing more than a return to the days of Pinball and Arcade machines, especially when they can rely on gamers to now provide the hardware themselves :)

I think you're very right to tie the monetization scheme to the arcade era. For those interested, Raph Koster (who is a really bright guy) wrote about ARPU vs. ARPPU back in 2009.

Edit: double-posting is awesome!

I'm playing the console version coop couch on Normal (Medium). The legendary items just fall like rain. My stash has nothing but rares or better in it and it's 140 and still going. Gonna have to salvage the lower level rares soon. At level 40 in the middle of Nightmare, my wizard has a legendary weapon, legendary amulet, legendary armor, legendary ring, with the rest of the equipment being rare. No grinding was necessary to achieve this.

My wife's barbarian has no less than 3 level-appropriate legendary weapons at the moment - two one-handed ones and a 2-handed sword. They're so good, she just scraps the rares.

That's quite a contrast to my run on PC, through Normal and into the early stages of Nightmare. I was blessed with mediocre item, after mediocre item. The AH literally bettered everything I had with its bottom of the barrel listings, nevermind those that were the most sought after.

I can still remember getting a great shield in Diablo 2, for my Paladin. I can still recall a really useful helmet, for my Druid, that I used for the entirety of Normal mode. I will never forget seeing a superb sword drop for my Barbarian, and using it well into the end of the following act. In Diablo 3 I cannot recall a single item that dropped being anything other than an afterthought to sell on the AH to lower level players.

Perhaps it was just luck, plain and simple. But I stayed away from the AH until the latter stages of Normal where I was the weakest of our group due to sub-standard gear. Upon complaining about my drops I found out that the AH was where everyone else had kitted out their entire character. Kill to loot items may as well have became kill to refresh listings.

I really think the Auction House threw things off, based on the loot drop differences. My wife and I just played for 3 hours tonight. She got an upgrade of a Legendary 2-handed sword. I got plans for two Legendary weapons, one of which I crafted because it was level-appropriate. I got a new Legendary amulet (replacing my lower level one) and a Legendary Wizard Hat, too. This felt more or less typical for us. It's actually a little on the dry side since we didn't get any good rares.

We don't even read the blue stats anymore. Anything less than rare immediately goes into the salvage bin. I'm not sure this is a healthy item drop distribution, TBH.

Removing Auction House at this point will do little to resuscitate the game.

Jay Wilson is the second worst thing to happen to Blizzard, the first thing being Bobby Kotick.

Some games are irreparably broken in design, and no amount of patching will fix them.

One of the most glaring flaws in Diablo3 is the fact that they now compose "random" dungeons out of giant set-pieces of art, significantly reducing the randomization which is at heart of a roguelike.

Other flaws included inability to customize character stats, too much stuff being done "for you", boss areas now being isolated scripted sequences, convoluted/overbearing/stupid plot, and a lack of a graphic option which would turn off the horrible bloom/blur effect... forcing people to resort to a DLL hack to get the game to look decent.

shihonage wrote:
Removing Auction House at this point will do little to resuscitate the game.

Jay Wilson is the second worst thing to happen to Blizzard, the first thing being Bobby Kotick.

Some games are irreparably broken in design, and no amount of patching will fix them.

One of the most glaring flaws in Diablo3 is the fact that they now compose "random" dungeons out of giant set-pieces of art, significantly reducing the randomization which is at heart of a roguelike.

Other flaws included inability to customize character stats, too much stuff being done "for you", boss areas now being isolated scripted sequences, convoluted/overbearing/stupid plot, and a lack of a graphic option which would turn off the horrible bloom/blur effect... forcing people to resort to a DLL hack to get the game to look decent.

Kotick is an easy "boogey man" to pick on.. but outside of "feeling" do we have any real evidence that Kotick was responsible for anything at Blizzard (good or bad)?

It's far more likely that it's because of pressures to continue feeding the machine that is now a 4,700 person company with fading revenue from (former cash cow) World of Warcraft. Combine that with the overall decline in the VideoGame biz (side note decent read here http://stream.wsj.com/story/latest-h...) and you have a recipe for "failed experimentation".

I call it a failed experimentation because that is what it felt like to me.. a solution to a problem that didn't really exist. Blizzard thought that creating a "safe haven" for trades with a side benefit to a bit of RMT for their most dedicated would be a net good.. what they didn't account for is that millions of farmers will always "out play" the semi-hardcore and thus create the environment in D3 that resulted.

As well.. its a crowded field now.. with F2P clones as well as slickly designed and well managed lower budget titles. I'm not sure a Diablo type game in today's market is ever going to be another "blockbuster" of the type a company like Blizzard needs.

You have a different perspective on life and business when you wake up every morning and have to figure out how to justify and support 4,700 people on your payroll..vs 50. And its a testament to Blizzard and their success (remember Blizzard hasn't been in control of their destiny way before Activision entered the picture) that for the most part it appears the Corporate Parent has let well enough alone (supported by the fact that all 3 founders are still in management roles)

Kotick isn't some micro-managing suit that swoops in once a month and tries to get everyone to do something different from what they are doing.. I don't personally know the man..but one of the brothers I work for is a personal friend and I have met him once in our NY office (I shook his hand and told him I wanted a Bard Class in WoW) and he seemed personable enough..certainly highly intelligent.

Not sure how well or poorly consoles sales are doing.. but it could be that they alone with the expansion provide enough juice to still make Diablo a profitable franchise for Blizzard on a go forward.

Personally their biggest challenge is yet to come.. at some point Blizzard will have to blink.. either force WoW subscribers directly to a new game (i.e. Wow 2) OR run something in parallel and hope that you don't piss off either side.

I'm not sure why, but reading about the changes to Diablo III reminded me that I always meant to go back and put some more time into Guild Wars 2. And I am. And it's good.