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Blizzard Reveals Real Money-Powered  Diablo III  Auction House
Blizzard Reveals Real Money-Powered Diablo III Auction House
August 1, 2011 | By Sterling McGarvey

August 1, 2011 | By Sterling McGarvey
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    40 comments
More: Console/PC, Social/Online, Design, Business/Marketing



At a Gamasutra-attended Diablo III event held at Blizzard's Irvine, California HQ, game design EVP Rob Pardo discussed the game's Battle.net integration -- including a player-driven, real money transaction-powered economy -- and discussed its release date.

While Pardo shared no concrete details on Diablo III's launch, including pricing tiers or release date, he did say, "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."

What he did discuss in depth is the developer's blueprint regarding integration of its Battle.net service with the game, and also plans to implement an online auction system similar to that in place for World of Warcraft.

Toward the end of a two hour presentation -- most of which was spent detailing franchise lore and demonstrating character classes -- Pardo dove into details regarding the next evolution of Blizzard's online service.

Diablo III will continue some of the Battle.net features incorporated into StarCraft II, including Real ID integration, which offers a persistent friends list and cross-game chat for players to communicate across other Blizzard titles.

He also revealed that as with StarCraft II, a persistent internet connection will be required to play -- in both single player and multiplayer modes. All character data will be stored server-side with Blizzard. When asked about the publisher's stance on online-only play, Pardo responded, "We understand, and we know that there's a group out there -- there are times when I don't have internet either, like when I'm traveling on a flight -- but we believe the positives outweigh the negatives."

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 Battle.net 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.

When asked if he had any concerns about Diablo III's auctions turning into widespread item speculation, he hinted that the regional breakup of currency would play a factor. "In WoW auctions, you're looking at a few thousand people cornering the market, whereas Diablo's regionalization makes it tougher to speculate. But we'll monitor it closely." He also compared his idea of user-driven item pricing to the iPhone App Store, in which inflated app prices self-corrected as buyers dictated what they would pay for applications.

When asked about the regional breakdown of the shop, Pardo said, "The primary reason why we're doing the Auction House per [real world] currency is for usability, and in some cases, with legality -- it's the easiest way to do it... There are going to be so many items in each auction house in every currency that there shouldn't even be need to shopping around in different currency houses."

He also fielded an inquiry as to how much the implementation of the Diablo III Auction House influenced the design of the game.

"Did we design the game with auctions in mind? That's an emphatic no. It's all just going in the direction of what we want to do with Diablo. What we set out to do is make awesome items. If you were making Diablo III without the auction house, that's exactly the same goal, it's what you'd want to do as a designer, right? That's what we want to do. This just incentivizes what we already set out to do," Pardo said.

One of Pardo's final responses involved the question of how Blizzard would gauge the game's success, be it in higher numbers of auctions or in hours logged playing the game.

"I would find it to be successful if they're having fun doing [either]," he said. "That's always the trick when it comes to the Auction House -- or I could talk about any of the major game systems in WoW.

"What we want is that people can spend their time having the most fun doing whatever it is that they want in the game. What would be bad is if people wanted to play the game with their friends, but instead felt compelled to spend all of their time competing in the Auction House, and that's something that we want to avoid."


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Comments


Jack Nilssen
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Cha-ching!

jayvee inamac
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so diablo 3 is an MMO?

(Torchlight 2, please be good...)

Jose Resines
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Exactly.

Casey Dockendorf
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I didn't get the impression from that article that Diablo 3 would be an MMO. Auction houses are pretty common in PC games these days, it sounds like they are just jumping on the bandwagon before some outside party does and cashes in on their game like the older Diablo's.

Timur Anoshechkin
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"Greed is Good"



I think overall it is correct idea, but the problem is that a lot of people will be left hurt if speculations is left unchecked. Also some rare items will cost crazy money, due to "whales". If item is super rare, people will pay thousands of dollars for it. Investment bankers play games too. Though if update strategy is anything similar to WoW, the devaluation effect which comes with every update will keep prices at bay. But this is hell of experiment to allow players to cash out. Chinese gold farmers started hiring as soon as they finished reading the article.



I know people are going to complain etc. But look on the bright side, there is no subscription and I am pretty sure the game will be 60 dollar worth with or without auction house.

Daniel Gooding
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Yo we made some sweet stuff, now how can we take advantage of impatient rich people.



It makes sense from a profit sense, just as someone who doesn't have extra money for instant extra features, it is disheartening.



Like playing another F2P.



I've been thinking that Diablo 3 would end up with similar qualities of an MMO with how long it has been.



Edit: just read up about the always on-line thing. Definitely screws over a lot of my friends in the military.

Jose Resines
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The always online thing is no surprise after SC2. It's still the reason I won't buy any Blizzard game.



The auction thing?. BAD idea. It seems that anything will go in the Kotick era at Blizzard. Chinese gold-farmers are trembling already thinking of how they will push them to get more and more dollars.



All in all, Blizzard goes deeper into the toilet.

Daniel Gooding
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I'm probably the last to hear this but, no off-line playing??



Do they want me to play a hacked version?

Tiago Raposo
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If Diablo III turned out to be as good as Diablo II when it launched, it could be one of the few games (before Steam) that I want to buy the original. Now that it's online only, I'm really thinking of not buying the game. Which does not mean I won't play it. Which means their goal of online-only have shot them in the foot.



So, yeah, offline play means hacked version (and since it's offline, no banning from Battle.Net).

Casey Dockendorf
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I am not a big PC gamer so I am not quite sure why the constant online connection is such a bad thing? Is it because you can't play it on your laptop in places where there isn't an internet connection?

Jack Kerras
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Because when you have little connection burps, it boots you out to the menu or requires you to regain your connection, which (in some cases) will put you back to a checkpoint. (This was the case in AC2; SC2 didn't have problems so big, if I recall correctly, but I only bought SC2 for use-map-settings and TDs)



Because it interrupts your game for absolutely no reason.



Because sometimes we in hurricane country like to play video games when the Internet is down but the power isn't.



Because playing on your laptop on wireless often has little blips that are barely enough to affect your browsing but are plenty to shut your game down.



Because playing on LAN with your buddies when you don't have a big-ass switch used to be super easy and is now a ginormous pain in the balls that makes it easier to pirate games than play them legit.



Because the entire concept of being online all the time keeps you tethered to a connection and supposedly saves Blizzard from piracy, but all it really does is make legitimate customers jump through hoops, while pirates only have to wait for a cracked version and then play how and when they want.



Because it's inherently worthless (no matter what the positives are; the Steam cloud will synch my shit with their server version A-okay without needing to be connected all the time) and requiring it for a single-player game is Goddamned ridiculous, a waste of my time, and no real protection against piracy.

Daniel Gooding
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In my opinion this is far worse than Offline DRM.

Offline DRM just slows people who want to share the game.



This is literally punishing the people who legally purchase the product, unless they have a stable connection.



What about people like myself who travel often? Hotel internet is a crapshoot.



The worst part is... This wont stop piracy of the game at all.....

Joshua Sterns
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I have a Time Wanker (warner) package that includes phone, internet, and cable. Whenever the phone rings my connection drops to a crawl. If I want to play Diablo III, then I'll probably have to unplug my phone line.



That's very annoying. Especially if I want to play off-line single player like the first two Diablo's.

Ian Uniacke
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Jack you forgot:



...Because we are looking for a convenient excuse to justify pirating the game.

Rob Wright
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Regarding the persistent Internet connection, I'm not surprised. This is the world we have created (I mean gamers collectively as a whole). It's just no longer reasonable to expect game devs/pubs to release their games with no piracy prevention methods whatsoever. We're either going to get stuck with always connected requirements, even for single player games, or we'll have DRM. Or both. I always knew that the incessant torrenting of PC games would come back to haunt us, and it has -- in spades.

Tiago Raposo
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I believe that line of thinking has a flaw: it's not the incessant torrenting that's the cause, it's the cost of the games. I personaly own so much more original games because of Steam than when I had to put down 50 or 60 dollars for new games. And with games getting shorter and losing value, not buying became an option, since the game is available "for free" somewhere else.



Now I know that losing value is not what happens with most Blizzard games, SCII included, but them being Activision-Blizzard possibly sent them that way, as a "prevention" measure.

Rob Wright
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Tiago, I agree with you to a certain point -- the cost of game development is a huge factor in how games are marketed, priced and delivered today. But that rising cost only reinforces my point that publishers are no longer willing to invest tens of millions of dollars in major release without doing SOMETHING to prevent piracy.



Look at the example of Sins of a Solar Empire. Everybody lauded the fact that Stardock bypassed any copy protection for the game, and it sold more than 500,000 copies in less than a year. Great. But the budget for that game was -- amazingly -- under $1 million so Stardock and Ironclad, I believe, could get away losing a significant percentage of sales to piracy because the game was so inexpensive to make. However, if that game cost $20 million to make and sold 500,000 copies at an average selling price of $40...well, do the math.

Adam Bishop
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"It's just no longer reasonable to expect game devs/pubs to release their games with no piracy prevention methods whatsoever."



Why is it no longer reasonable to expect that? In order for it to be reasonable to expect DRM, there would have to be some empirical evidence that DRM increased revenue, but I've never seen anything that shows that. I'd argue that DRM is inherently *un*reasonable; it imposes additional costs on publishers, it decreases the value of the product to consumers, and there's no proof that it even does what it's intended to do.

Rob Wright
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I'm not saying it's the right move, Adam, or even a good move. I'm simply saying that you have to look at the situation through the eyes of a typical business that's run by accountants and lawyers. Their job is to make their business successful or at the very least profitable, and when they see their games on torrent sites be downloaded all over the plant, can we reasonably expect them to ingore and say "oh well"? They see their business being threatened and they feel compelled to act. Now, they're not sure what the right solution is and they may make stupid, panicky moves (hello SecuROM), but I have a hard time blaming them for trying to do something about it.



Look, I hate DRM and I think always online connections for single player games are stupid. But what's the answer? An honor code? The elimination of game ownership and a transition to game-as-a-service? I don't know. But like I said, it's just not reasonable anymore for game companies to just sit back and play the fiddle while they watch the torrent sites.

Jose Resines
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I wish they looked at the situation through the eyes of a typical business. Perhaps then they would realize that they're selling inferior versions than those that pirates play, that they're inconveniencing their customers more with each passing year, and that those customers are starting to flee to other markets (Steam / indies).



The most I've seen DRM work was Splinter Cell: Chaos Theory. That one caused the "proper" pirate version to take a year to be released. But those who where willing to disconnect their IDE CD drives could still play a pirated copy.



Moral of the story?. Pirates will pirate, whatever you do. If you make your customers jump constantly through hoops, you will lose them in the end. Drop the DRM, drop the price, you'll have many more customers, many more profits.



Sadly, the suits at the top of Blizzard, Ubi, etc, are way too incompetent to understand that, and/or they don't care about the customers, just about the money.

Rob Wright
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I see your point, Jose, and I tend to agree with you that many game companies fail to truly understand how much DRM alientates their core (read: paying) audience. I can't tell you how frustrated I was trying to play Alpha Protocol, for example, jumping through hoop after hoop to get the stupid authentication system to work.



But...I believe that businesses will not accept "pirates will pirate whatever you do" as an operating philosophy, especially public companies that answer to shareholders like Ubi, EA, Activision. Businesses will either look for a way to prevent piracy/turn illegal downloads into sales....OR (I fear) they will get out of that business altogether because they believe there isn't a sustainable and predictable revenue stream/profit margin, especially with the rising cost of triple A titles.

Adam Bishop
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@ Rob



What I'm suggesting is that DRM might *not* be making them money. If their job is to make money (which I think we both agree it is) then what they ought to do is whatever will bring in the largest amount of profit. I've never seen any compelling evidence that using DRM increases profits at all. So to answer your question:



"when they see their games on torrent sites be downloaded all over the plant, can we reasonably expect them to ingore and say "oh well"?"



I would say that unless they can empirically prove that DRM actually raises profits, then yes, I would reasonably expect them to say "Oh well". It's only reasonable to respond if your response is effective, and I have serious doubts that DRM is.

Rob Wright
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I agree, Adam. Totally rational point. And that argument was made with Stardock's move to go DRM free with Sins of a Solar Empire: yes, we'll lose some sales to piracy but we won't alienate our paying customers and we may foster goodwill with the gaming community as a whole with the move, (i.e., we'll look "cool").



But while we know in restrospect that Stardock's move worked, it was a seriously risky move epsecially for a new IP. And it paid off in large part because of the game's low budget (see earlier post/I apologize for spamming this thread). And now here's the problem -- you will have to prove to publishers before a game is released that the Sins model will work every time and that it's just not a lucky shot in the dark. You'll have to be able to confidently project that they'll earn more money by doing nothing. That's very hard to prove. And it's even more daunting if you include additional factors such as downloading will likely be heavier for a high-profile sequel versus an obscure new IP, and publisher's "rep" (I'm recklessly guessing Activision has a lot of people pirating out of spite).



In short, you're asking them to prove that DRM works financially, which is reasonable. And they, i would imagine, would ask you in return to prove that allowing piracy to occur unfettered will improve sales/profits, which I think is also a reasonable request.

Eric Geer
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I disagree with the "always online" in any game. My internet is generally on all the time but there are definitely times when it goes out or there are issues. I personally would like to continue to play my game even if its out...



As for the Auction-house transactions...well...as long as its not a required part of the game thats fine...but it would be much cooler and gamer friendly if it could be done with ingame currency opposed to real dollar currency--in games like this everyone should have to grind--its more like a right of passage than anything...it just seems that anyone could come in and buy all the greatest items and never really even play the game---as long as there wallet is big enough.

Ian Uniacke
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That person must REALLY like imaginary items. ;)

Keith Patch
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My purchase of this game has now come down to: "How punishing is the always-on connection requirement?" This makes me miss D2 where you had an offline single-player but you could also have Blizzard host your character for an online-only experience. Of course, this will have a huge impact on second-hand sales. People might pirate for the single-player, but Diablo is generally about the multiplayer. So, I'm a little more accepting of the connection DRM, but I do like to have single-player access.



I don't mind the real money selling of items. Users are supposed to get a few free listings each week, which means users like myself can sell off the occasional rare item and potentially pay off the game itself during the lifetime of the game. The downside is that it will encourage farming... but it's not like it'll be much worse. Look at any persistent online game and you'll find gold/item farming. At least now it'll be regulated and competition will exist.



To claim the auction is unfair would be kind of pointless. Back in D2 it wasn't uncommon to give/receive rare items with nothing in return.

Cordero W
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I remember a time when I was joyed to enter the video game industry.

Ujn Hunter
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Sweet. One less game I have to buy.

Simon Ludgate
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I already promised never to buy another Activision-Blizzard game when Kotick proudly announced he was taking all the fun out of games, and this is clearly an application of his ruthless ambition.



That said, this is probably a good move, financially. All the people who would consider pirating the game instead of buying it due to persistent online connections or in-game transactions are people who would consider pirating the game... period. Those obviously aren't the people Blizzard wants to target as customers or fans of the game. Instead, Blizzard wants to target people who would blindly buy the game no matter what restrictions were put in place and the people who eagerly look for more opportunities to spend money through Blizzard and their games.



Business 101: take your product where the profit is.

Daniel V
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What a disappointing news.



I am less concerned about the internet connection requirement but real currency transactions can ruin any game for me, however good it may otherwise be. Even if I won't directly use that feature, it is a constant reminder that no matter how far into the alternative reality you may try to espace, real world greed will catch you there. This is not why I play games.



I am not looking to offset my games' costs by selling a "like new Obsidian Ring of the Zodiac" for $2.99. I pay to get entertained and if I get my money's worth, that's enough for me.



Expect Diablo IV Tristram to also have billboards with Nike advertisement and authentic medieval mailbox that connects you directly to your Facebook page...



Still hoping this is some kind of hoax or misunderstanding but if not, shame on you Blizzard! This is not what brought you this far.

Doug Cronkhite
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The RMT aspect only hurts the game if you're a competitive player in the online facet. If you're mostly a solo/story player like me, the fact that other people can buy their way to power doesn't affect you.

Jack Kerras
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This actually isn't as terrible as most of you are making it out to be.



Really, in D2, you could buy what my roomie referred to as forum gold, which you could then buy rare items with. You could list unidentified items for a nominal amount, but if you ID'd your uniques and got perfect stats on them, you could sell them for a boatload of forum gold.



There's a particular site that makes this happen, and they take a little forumgold from every listing or transaction that goes on. I don't know where to point you folks, sorry about that, but what this sounds like to me is Blizzard making that entire affair official, connecting it to the game, and making it safe. So instead of trading with bots on the black market and maybe getting screwed, it's now a sanctioned action that you can take. It makes a lot of sense to me; people have been buying and selling D2 items for years, and in an unsafe, relatively crowd-sourced kind of place, it's not the best thing ever. With a safe place to do it, you're a lot less likely to get screwed, and it makes a ton of sense businesswise.



It's just official forum gold. 'One less game I have to buy' seems to be going a little far for a measure they're taking that it seems like is just cutting the middleman out of things people will do already and making a little cash on the side.



Don't worry; I'm sure folks who want to stick it to The Man will still use forum gold for these things. Even when stuff's not illegal, there're illicit ways to buy it.

Jack Kerras
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Now, all that being said in defense of Blizzard's RMT auction-house, the always-on internet connection fuckin' pisses me off.

James Hoover
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If Always being online means getting rid of hackers, dupes, cheaters, and scammers... then I am extremely happy about always having to be online.

Philip Michael Norris
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Hither comes the age of own-to-rent

Ian Uniacke
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What is it about Blizzard that brings out the trolls...oh wait I see. (I'm looking at you Horde)



Honestly what a load of overreactionary BS (I'm talking about the comments section).



Anyone who has had their account hacked in WoW knows that trading is going to go on, officially or not. What this does is (hopefully) removes any of the negative aspects of illegal trading (eg chinese gold farmers).



As for DRM, seriously? Are we still arguing about that. Move on people, are you going to be 86 sitting on your porch with a shotgun complaining about the good old days, and firing shots at anyone who comes near your precious dvd collection?

Victor Gont
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I am seriously amazed by the amount of backlash this announcement has produced. It's like the RealID fiasco all over again. Hopefully this time Blizz won't back down, because this auction house feature is a very neat idea. It doesn't only hamper illicit gold farming/item selling activities, but also gives legit players a shot at getting something back for their ingame effort.



I won't comment on the online connection thing because I just don't seem to be getting why people moan about it and I'll just draw some angry comments. Anyhow, color me curious about how this will all play out - not much to go until release hopefully.



Oh, almost forgot. I wonder what will happen once all the WoW players trained in years of playing the AH game and making millions of gold get a hold of the D3 auctions and start juggling real money items.

Joe McGinn
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I agree Ian.



- Always-on: get used to it. Internet is the new electricity.

- Auction house - so what? It's still a single-player game. If you just want to play it, this has absolutely no effect on your as a player. For Blizzard, smart move. As they pointed out the market existed anyway. Might was well make it legitmate (better for players) and take their cut (better for Blizzard). Win-win.

Justin LeGrande
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This issue reminds me of a "personality question" from Dragon Quest 3...



"If you accidentally trip over a boulder, do you blame the boulder, or yourself?"



...Is it the boulder's fault for being placed there, or is it the tripped person's fault for not being careful enough to notice the boulder right under their noses? If Activision-Blizzard's customers are too narrow-minded to research their CHOICE of purchases, you can't blame A-B for exploiting them. Big business THRIVES off mob/mindless sheep mentalities. Until a day comes when all their customers collectively proclaim, "Hey...you know what? We're not going to accept this nonsense any longer"... Kotick n' Krew are just being encouraged to pull this sort of stunt.



For online-only naysayers... StarCraft 2 is primarily an American developed and published game. Until the collective American user base demands, "Hey, SCREW YOU! We won't invest unless everyone on this planet is invited, not just ourselves!"... guess what happens?



Globally uneven technological and economic growth will continue to influence how the "suited ones" dictate availability to potential players. The continuing relevance of LAN has to be proven... and too many Americans are showing through their actions that they are content with online-only. Until that changes, Activision-Blizzard and just about every other American corporation will stay the course.



By the way... you CAN play StarCraft 2 offline. But only alone, with campaign, custom games, and versus AI. I suspect the same will be applicable to Diablo 3, sans the "open server" that Blizzard reserved for offline characters and cheaters back in Diablo 2.

Justin LeGrande
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I think the officially supported RMT sounds very interesting for online dungeon crawler games like Diablo 3. There's bound to be loopholes to bug out on, but I think this sort of model could lay the foundation for a sane alternative/solution to these 3rd party services: currency-selling, level-rushing, character daycares, hacked and legit item sales, scam n' blam, training guides and/or bots, and rare item-hunting.


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