After the launch of Diablo 3, there were major issues with the real-money auction house. The game still suffers from some of these problems today. Former Blizzard CEO Mike Morhaime explains in hindsight what went wrong back then and how it was changed.
Who is speaking? Mike Morhaime is one of the three original founders of Blizzard and worked at the company for 27 years, most of the time as CEO.
He has now stepped back from Blizzard and reflects in an interview with Venturebeat on some significant experiences from his time there. For instance, about the “real-money auction house” in Diablo 3.
What was the real-money auction house? Diablo 3 launched with an auction house in two versions:
- In one version of the auction house, players traded with gold and items
- In the other version, they sold items for real money: players could buy with their “Battle.net” funds or pay with services like PayPal. This auction house opened about a month after launch on PC.
The auction house was closed in March 2014, shortly before the expansion “Reaper of Souls” was released.
“Players do it anyway”
Why did Blizzard even introduce the auction house? According to Morhaime, it was a logical development from Diablo 2. Because in Diablo 2, a real-money market for items had emerged, but it did not come from Blizzard, but from others.
Blizzard thought: If we don’t introduce an official mechanism here, a lot of bad things will happen in Diablo 3 that steal from the players: people can steal items or steal passwords.
Morhaime says: People set up businesses for item trading, and some of them only wanted to steal people’s credit cards.
At Blizzard, they knew this and asked: “Okay, people do it anyway. Can’t we give them a way to trade items safely?”
Pay2NoFun
The problem was: This idea apparently came to Blizzard too late. Because the loot system of Diablo 3 was designed without the real-money auction house in mind. They quickly noticed that the system did not work:
- Strong players sold their “second-best” sword, which they didn’t need anyway, for a pittance
- Weak players saw this sword in the auction house, which was much better than anything they had, and bought it to save themselves hours of grinding
When you looked in the auction house, there were always items that were better than what you found in the game. This ruined the “item reward loop”.
Morhaime did not refer to the mechanic as “Pay2Win”, but as “Pay2NoFun”.
It was like this to abolish the auction house: Morhaime says it wasn’t a big issue. They asked the team: “Would it make Diablo 3 better if we removed the auction house?” The team replied, “Yes.”
“If you could do whatever you wanted, would you snap your fingers and remove the auction house?” The team said, “Yes, we would.” So it was removed.
Were there financial problems? Here Morhaime says he does not believe so. There might not be a table to show the CFO that this was the right action. But it was the right action, and every player knows that.
Diablo 3 and the little content
What impact did the end of the auction house have? Morhaime does not talk about this in the current interview.
But it seems to be a problem that Diablo 3 had no way to make money apart from selling the game and the expansions.
Therefore, Diablo 3 has no real live support, as many Diablo fans would have wished, with more expansions and regular major patches.
As early as 2015, Morhaime explained that the Diablo team had discussed monetization after “Reaper of Souls” in 2015, and Morhaime said: “Just release the stuff for free.”
He wanted to win back the hearts and minds of players who were disappointed by the release.
Valuable lesson for other loot-shooters
What this is about: Diablo 3 had a terrible launch back then – also because of the real-money auction house.
Because of ideas like “free item trading”, the loot genre has moved away from the experiment by Blizzard back then. Today, loot in many games is “bound on pick up” and cannot be traded.
This lesson was learned by Blizzard from Diablo 3, and many loot games like Destiny or The Division have followed this idea: trading items kills the “reward loop” because it no longer depends on your own success.
A valuable lesson for the genre. Diablo 3 has certainly lost some content over the last 5 years due to the lack of a “good monetization” method.
