Monday, August 8, 2011

Blizzard and the Two-Level Deception

Recently we discussed Blizzard's announcement that they are saddling Diablo III with terrible DRM, which they say isn't DRM, but which everyone knows is DRM. I mentioned that there was much to be said about the contemporaneous announcements of a real-money auction house and a ban on modding. Well, the time for that is now.

The auction house is getting good press. After all, it's an example of a very good pattern in business - when there is something you can't stop your customers from doing, embrace it in a way that makes it safer and more convenient for the customers and profitable for you. This is the way of thinking that says the proper response to Napster is not lawsuits, but iTunes. And it says that if your customers are selling their virtual goods on eBay, you should make an in-game auction house and take a cut of each transaction.

There is one little piece of news, though, that is disquieting, and that isn't being reported much: transactions are anonymized. That's weird, right? World of Warcraft's auction house is not anonymized, and Blizzard is the same company that brought us the Real ID fiasco. Why, once money is involved, would they suddenly take the opposite course?

"I love the idea that the reason you need to stay connected is to keep people from cheating, while at the same time creating an infrastructure to purchase equipment straight out with cold, hard cash. Blizzard has no plans to sell items themselves - oh no! - but the sellers are anonymized, so... hm. Apparently you’re supposed to report things like these with a straight face."
—Tycho, The Fire

While Blizzard claims that the auction house will only be player to player, if it's anonymized, there's no way to be sure. If the economy is stagnating, Blizzard can just spawn some epic drops and sell them. They can, in essence, print money. Lack of transparency in this case means we can never know what Blizzard is up to behind the curtain. Even if Blizzard genuinely has no plans to engage in these sorts of actions now, they are leaving the option open. How long before they give in and try it?

Now let's talk about the next announcement: no mods. This seems to go hand-in-hand with the constant connection requirement as an overly-draconian anti-cheating measure. After all, even World of Warcraft supports mods. And the question again becomes - why not just prevent the cheats in multiplayer, and allow single-player to stand alone, as before?

The given answer is unsatisfying at best. The natural reaction, especially with Ubisoft's ludicrous "mission accomplished" still ringing in our ears, is to assume that it's about DRM, in a misguided attempt to thwart privacy. Blizzard has actually thrown fuel on this fire, having one of their VPs claim that DRM never even came up in conversation about this. It's a ridiculous idea, especially since they already said that preventing piracy was one of the reasons for these decisions. So we reject it and congratulate ourselves for spotting their deception and figuring them out, seeing that they just don't want to admit that it's all about DRM.

But this might be exactly what they want. After all, if they are (as I wrote last time) smart enough to see this coming, then the only logical conclusion is that things are going just as planned.

What if the real answer isn't DRM at all? What if the real reason that Blizzard doesn't want you to be able to "cheat" in single-player (despite the impossibility of this) is because then you'd have no reason to use the auction house?

"Who is being cheated? This is the part of the movie where, in a series of retrospective realizations cut with you looking at your own face in the rearview mirror, you come bit by bit to the heart of it. The person you are cheating is Blizzard, Blizzard in the aggregate, with your attempts to interfere with their digital marketplace. You mustn't play offline or goof around with your files or any other naughty business because they are endeavoring to transform your putative ownership into a revenue stream."
—Tycho, Sound and Fury

The auction house is more than a way to legitimize and profit from item selling. It's a continuing income source. It's important enough to Blizzard that they were willing to substantially restrict the single-player experience, cutting off some percentage of their potential market, in order to force it on the single-player users who remain. Blizzard isn't chopping out offline single-player because no one would use it; it's chopping it out because too many people would use it. The ugly surprise hidden behind the DRM smokescreen is that Diablo III is a microtransaction game. The best way to get you to participate is to block off your ability to tweak your character for free, and then force you to play in such a way that paid tweaks are constantly available.

But they'd rather you not think of them as the sort of company that does that. Here's what they want you to think:

PCG: Why did you decide to implement an auction house system instead of typical microtransactions, which have pretty much been turning everything they touch into gold lately?

Bridenbecker: Really, what you're talking about there is the hallmark of what Blizzard's all about. We really try and get into what's in the best interest of players. And any time you introduce that business-to-consumer relationship, it muddles the waters some. So the person starts to think "Why is Blizzard doing this? They're obviously doing it because it's in the best interest of the business." But if it's something where it's player-to-player, it actually takes away some of the questions as to why we're doing it. Just by the very definition of player-to-player, it shows that it's actually for the players. It's about the players.
Nathan Grayson, Blizzard defends Diablo III’s auction house, always-online requirement

Blizzard would love for you to believe that everything they do is designed to make you happier - but if that were really the case, they wouldn't take away your offline single-player. Letting you believe that their decisions are about DRM is still preferable to you seeing the truth. It's very easy to believe the DRM story, since we've heard it before. We can roll our eyes at Blizzard's corporate overlords who just don't understand that DRM is a losing battle, but at least we are used to their viewpoint. We've demonstrated as consumers that we'll complain about it for a while, but then we'll move on. It's a very different story from crippling a product in order to charge players for something they used to be able to do for free.

Imagine if movie theaters could forbid you from bringing in outside food or drink and prevent you from watching films at home. Don't you think they'd do it if they could? Don't you think they'd try to tell you it was to improve your film-watching experience?


  1. Movie theaters do prevent you from watching films at home. Movies are not released on DVD for several months after showing at theaters. Also, by the time you CAN watch movies at home they typically arn't even playing in theaters anymore. Also they do try to forbid you from bringing in outside food and drink (its just not really enforced). I don't think they hide the reasons why... its all about making money.

    Anonymous AHs so Blizz can sell items themselves makes me want to reach for my tin foil hat. But its an interesting theory.

    No mods is a given when dealing with a player driven economy that uses real money. Things need to remain a fair playing field and mods make this complicated.

    IDEALLY there would still be an additional separate single player mode where you could use any mod you want and do whatever you want. That would be great and I do agree with your idea that a strong reason against including this was to encourage (force) people to be online and exposed to the AH and social pressures for the sake of making money. It is a little annoying seeing their execs issuing PR statements claiming ignorance of these things.. but for a company this large with a gamer marker this rabid it would probably be much worse about the desire to make money here.

  2. The revenue Blizzard would get from selling items on the RMAH is a joke. Not worth the risk.

    Even if Blizzard was evil and had no goal but taking as much of your money as they can, secretly cheating the RMAH by selling their own items would be a TERRIBLE business move.

    The extra income (miniscule compared to total revenue) would not be worth the damage caused when their scam was inevitably revealed.

  3. just curious to the nay-sayers, a) what makes you think blizzard WOULDN'T sell items in game when tons of other games and companies do this, and b) why would that be such a bad thing?

    there are plenty of games (nexxon games, aria games, etc.) where people use real money to buy digital items directly from the game company themselves. so why would this be so shocking? because they're trying to hide it and mix it in with p2p transactions?

  4. Gold selling is big business. It's large enough to impact the economy in certain countries. It's hard to get a solid number but I've seen estimates in the billions. With a b.

    Now of course that includes gold selling in other games but what I'm trying to get at here is that the business of buying and selling items in game is at least in the same ballpark as making and selling the game itself.

    Virtual items are incredibly profitable. Ask Valve, ask Microsoft, ask anyone else in the game. This is a very smart and a very sneaky move.

  5. "The trading of virtual currency for real cash employs hundreds of thousands of people worldwide and generates between $200 million and $1 billion annually, according to a 2008 survey conducted by Richard Heeks at the University of Manchester."

  6. If they want a F2P Diablo MMO, make that. Don't try to sell me some $50 box "single player" game that I can't even play offline because you want to wring every last cent out of your audience without cannibalizing the WoW cash cow. This is sad, but I think I won't be trying Diablo now.

  7. Why would blizzard need anonymous selling to sell items themselves?

    They own the game. They could easily create some mule accounts and put rare items on them.

    Likely, the anonymity is to prevent people from realizing that 95% of the items on the AH will be coming from chinese farmers.

  8. Blizzard seems bent on bringing real life social inequalities into their games, specifically how much money people have.

    Compare this to WoW during the first year or so, when there was nothing but the inital cash cost of buying the game and the monthly fee. There was a threshold for getting into the game, but ultimately everyone started out at level 1 with the same possibilites in-game as anyone else. This is what some companies use micro-transactions today call "No Cash Advantage", which ensures no one can buy their way to an advantage gameplay-wise.

    Always online DRM is not the issue for me, mmorpg's have required you to be online without it becoming an issue. No modding is regrettable but not a deal-breaker, it's PVP and a balanced game that is uninfluenced by mods is desirable. No offline singleplayer is justifiable if only to create a steady income to support further development. But these restrictions apply to everyone and ensures a level playing field.

    But I can't stop other players from buying their way to better gear, I can't stop others from stacking the odds in their favor. Even if I choose not to buy any items I can not be on equal footing with someone who does, regardless of skill and effort.

    Gameplay should be offered to all players on equal terms, my having more money should not make the game easier for me. If a game can be said to have a winner, then surely the victor should in all cases be assumed to be the most skilled?

  9. Strepto, no modding should be a deal breaker. It's one more way that corporate America is chipping away at ownership writes. If I buy a game, I should be able to do whatever I want with it provided I don't copy and resell it or hack it and distribute deleterious code. By charging the same price for a game you can't mod, they are materially decreasing the value of the product. You aren't even really buying a license to the game any more, it's just a half-assed overpriced 1-time subscription fee.

  10. If there's anything I learned from playing WoW, it's that you can't really buy the good end-game stuff from the AH. Sure, there is some epic loot that can boost you a little bit but all my gold was mainly spent on mats for raiding and my flying mount. Other than that, the truly good gear had to be earned no matter what.

    My guess is, when the game actually does come out, buying this gear with real money will be stupid because you, a skilled player, with a skilled group, could easily replace the gear or obtain equal gear.

  11. I really doubt they'll sell items themselves. Instead they'll promote casual sellers to use Battlenet ebalance instead of PayPal so Blizzard ends up with %100 of the money from the transaction while only having to give a digital game or service in exchange.

  12. If you want to go even further down the conspiracy theory rabbit hole, think about this: They're removing stat points and skill points, meaning the only ways left to customize your character are weapons, armor, skill runes, and dyes - all of which are loot drops, and therefore potential auction house money-generators.

  13. Why does Blizzard have to be a liar? It's no secret they're in the business of making money. And they have historically done a great job marrying that with the business of providing entertainment. As long as they continue to make games that so many people enjoy, and they make a profit doing so, what's there to complain about?

    If there is a big demand for games that offer no social connection like achievements or multiplayer or sharing of ditigal stuff, someone can make a game to fill that niche. But your assertion that games must support such an offline mode is not based on the current trend of reality. Wallets speak the truth, and wallets want online, social interaction in games with as much of a fair playing field as possible.

    Now, it's a very valid request that a game support both modes so that people who want to cheat themselves only, or play on laptops in cars on road trips while their parents are driving, have a means of doing so. But it costs money for a game company to build that additional mode, and it's not unreasonable of them to decide that feature is out of scope. I know that I wouldn't want Diablo 3's release to have to be pushed out farther, and possibly its price increased, so that the developers can build a feature I care nothing about. And I'm sure they've done their homework and found that such a feature isn't profitable enough to warrant the extra work. They'll let someone else serve that shrinking target audience.