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Blizzard Entertainment is fighting back against gold sellers in World of Warcraft by giving players the chance to buy and sell gold themselves, using tokens for monthly subscription time.

This morning, the makers of the largest subscription-based massively multiplayer online role-playing game in the world announced a system in which players can buy tokens for 30 days of game time with cash — then sell them on an in-game auction to obtain gold for their characters.

This is the most recent dip into free-to-play online game mechanics by Blizzard in a sector that could hit $17 billion in 2017, according to market researcher SuperData. And it could have its biggest effect in Asia, where free-to-play is the reigning business model.

This comes a month after we learned that WoW is back above 10 million monthly subscribers after years or declining players.

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Strapped for cash? The new system will give you a way to buy game time for in-game gold. Strapped for gold? You’ll now be able to buy it by selling the tokens. I chatted with lead game designer Ion “Watcher” Hazzikostas to find out how it works.

Yes, he’s aware of the debacle that was the real money auction house in the company’s Diablo III action-adventure game. Yes, he knows people will try to defraud the system. Yes, he’s aware of the danger that people will use this gold to try to buy their way to power and dominance. Some raid gear and auction house changes may come as a result of all this.

I’ll tell you what he said about all that in a minute; stick with us. First, the basics.

The publisher will implement this into WoW shortly — and truly soon, not the classic Blizzard Soon™ with the trademark, Hazzikostas jokes (which typically means “when it’s darn good and ready”). It’s part of patch 6.1.2, a smaller update hitting the public test realms “in the very near future.”

How it works

World of Warcraft WoW Tokens

Above: A graphic from Blizzard explaining the new system.

Image Credit: Blizzard Entertainment

The person with the cash will buy a WoW Token good for 30 days of game time from Warcraft’s in-game shop. Blizzard hasn’t set the cash price yet, Hazzikostas said, but “it’s not going to be cheaper than a monthly subscription,” which runs $15 a month.

The token is bound to the player when they buy it; they cannot give it away or trade it. It won’t expire, and can’t be deleted. The only thing they can do with it is put it up on a special tab in the in-game auction house.

At the time they post it, WoW’s auction house tells them exactly how much gold they’ll get for it when it sells. While there is no set amount tokens will trade for (more on that in a second), once a transaction has been placed the price is guaranteed. In that sense, it’s more like an options market than a true auction: It has no bidding. There is no auction house cut. Players who post and buy tokens know exactly what they’ll get.

Buyers in-game can purchase the tokens with gold, and they know exactly how much they’ll pay at the time they buy a token. They receive the token after paying the price, and can then apply it to their account to add game time. Like the seller, they can’t do anything else with it — no gifts, no trading.

One nice feature: If you have a lapsed WoW account that has enough gold in it to purchase a token, you can do that right from the character select screen. Right now, lapsed accounts are restricted – players are subject to the same constraints as trial accounts, able to only play lower-level characters and barred from the auction house and trade.

On a lapsed account, if your higher level character with enough gold, you’ll see a “Reactivate with gold” button, even though you can’t log into that character.

World of Warcraft

Above: The new feature will add a button under the “Reactivate Now” that will offer the opportunity to reactivate with gold.

Image Credit: Heather Newman

Prices vary based on supply and demand

While buyers and sellers will see guaranteed prices at the time they list a token or purchase one, the market’s day-to-day sale prices in gold will actually fluctuate depending on auction house activity.

At any given point, all if the tokens in the auction house will share the same price across a geographic region (the Americas, Europe, Taiwan, Korea, and China), but that price will move up or down depending on an algorithm calculating historical supply or demand in that area.

One interesting note is that no matter when or how big the movement in the market is, sellers and buyers will always be guaranteed to get the price they saw. If a seller posts a token and the market moves downward before a buyer picks it up, the purchaser will pay the cheaper price — but the seller will still get the higher gold price they were quoted when listing the token. The same thing will happen in reverse: If a buyer pays more gold for the token than the seller was promised, the seller will still get paid the lower price.

“Potentially there are small amounts of gold that are being created, but also destroyed,” Hazzikostas said. “It’s about security and certainty, and it all evens out.”

Blizzard will set starter prices

Blizzard deliberately chose to guarantee prices up front in the game time auctions because they didn’t want players — especially sellers, who have bought the tokens — to walk away disappointed.

“Ultimately, it’s driven by a desire to provide the best and most seamless experience possible,” he said. “The way an auction house works is a really great deal for the buyer in terms of simplicity and convenience. You walk up, there’s a thing for sale, this is the price. You have a very simple choice: Take it or leave it.”

That’s not the case for people who are posting things for auction.

“For the seller, it’s much more fraught with risk,” Hazzikostas said. “I think everyone who’s tried to sell an item on the WoW auction house has probably had the experience of putting something up for sale, logging off, going to bed, coming back and finding out that you’ve been undercut 15 times. Your thing didn’t sell.

“You take it down, you re-list it, the process repeats itself. Eventually, you get frustrated at the fact that this thing hasn’t sold, and you’re like, I’m going to go down 20 percent to 30 percent, and then it sells instantly. Then you have that moment of seller’s remorse.”

World of Warcraft

Above: There is nothing sadder than expired auctions in the mail.

Image Credit: Heather Newman

That’s acceptable for a random item that a player wants to sell; not so much for a transaction involving real cash, he said.

“That doesn’t sound like a great experience for someone who’s just bought a WoW Token.”

Blizzard will start off by setting a gold price for the tokens in each region and then let supply and demand take over.

“We’re going to look at some things like the current going rate of gold on third-party market sites,” Hazzikostas said — the very sites Blizzard has fought for a decade to shut down. “Clearly that’s an indicator of what demand levels exist.”

They’re also aware of the market differences between the major regions, he said

“We are going to set a price. That price is likely to vary from region to region,” Hazzikostas said. “The economies from WoW servers are pretty consistent from server to server but vary widely from region to region.”

Tokens will fetch the most gold in Asia

World of Warcraft

Above: Commodities such as the true iron ore that comes from this type of node make up Blizzard’s “market basket” to compare regional prices.

Image Credit: Heather Newman

One way Blizzard knows the price differences between regions is because WoW developers have assembled a “market basket” of trade goods – cloth, ore, flasks, and so on – which they use to compare one region’s prices against another.

“America and Europe are pretty comparable,” he said. “The experience is comparable for players regardless of which realm [server] you’re on. It’s West versus East, in a sense; North America and Europe are on the lower end of the spectrum, and in Asian regions, there’s a bit more gold per player.”

Hazzikostas said that difference is not primarily because of gold farming companies in Eastern countries, a popular in-game stereotype.

“Taiwan and Korea pay the most gold for their stuff,” he said. “In Asia in general, one of the common ways of raiding uses ‘gold DKP runs,’ where they use gold the ways guilds might use their own systems to distribute loot. There’s a lot more general tendency to seek out and farm gold because of that system.”

(Players in “gold DKP” large-raid dungeon groups bid for every piece of gear that drops from a boss, contributing gold to a pot that all members of the group split at the end of the dungeon.)

Using the examples of other games

WildStar lets you get just as crazy as it is.

Above: WildStar’s C.R.E.D.D. was one of the models that Blizzard examined before creating the new Warcraft system.

Image Credit: NCSoft

That the tokens and prices will be region-wide is one thing that’s prevented Blizzard from trying this in the past, Hazzikostas said. Before this, auction houses were split by realm (server); this is the first time the company has created a region-wide, shared auction house.

“The entirety of North America, the entirety of Europe, are on a single commodity exchange here in order to help assure fairness and that players have access to buyers and sellers and transactions go through quickly,” he said. “All those things were necessary, but they weren’t easy or quick to make happen.”

The idea partially arose as many do for Blizzard’s developers: Other games did it first.

“It’s hard to pinpoint the single genesis of an idea. Obviously, it’s something that other games have done and have done with a fair amount of success. I think Eve [Online] with its PLEX were pioneers in this area; Wildstar did it pretty recently with their C.R.E.D.D.,” he said. Both systems permit players to buy game time with in-game currency.

“We watch what other games are doing, think about whether some other decisions are a right fit for our game: How can we learn from what they’ve done, how can we adapt those things to offer our players a better experience.”

Blizzard floated the idea in a teaser about potential 2015 plans, and player response was immediate and mostly positive, he said, even from players that said they wouldn’t be likely to use it.

“No one wants to see bots running around, nobody wants to see accounts getting compromised. That’s just kind of a win all around … I personally get tweets every few days saying, hey, where’s that thing that you mentioned,” Hazzikostas said. “We’re expecting that it will be fairly popular.”

Avoiding the Diablo III example

Diablo-3-Auction-House-bids

Above: Diablo III had two auction houses, one for gold and one for cash. Both infuriated players, because high-level item drops were extremely rare.

Image Credit: Blizzard

Even though Blizzard’s action-adventure Diablo III “is a very different game,” Hazzikostas said they’re keeping the example of that game’s real-money auction house in mind as they design this system.

Diablo III’s real-money auction house permitted players to post items for cash bids. It became the dominant feature of the game, the only place most people could get the best items even after extended gameplay. Some players made a lot of money.

But it was a disaster. Players responded viciously in forums and reviews, and its peer rating on sites like Amazon steadily dropped. Just under two years after the game’s release, the company cancelled the real-money auction house, boosting the individual drop rate of gear in-game instead.

“In Diablo III, gold and the items that were being transacted there were really very direct analogs for power. That’s what was changing hands. The very best items in Diablo were what was on the auction house,” Hazzikostas said.

“World of Warcraft … since day 1, one of the distinguishing features of our game and the game economy was that the best items in the game and the most powerful items are only obtainable through personal exploits, whether you are earning conquest points in arenas or rated battlegrounds, or whether you’re killing dragons in a raid and taking a flaming sword off the dragon’s corpse. You have to earn that yourself, gold won’t get you those things.”

Blizzard may change some high-end items

World of Warcraft

Above: These boots on the auction house are bind-on-equip items that drop from the game’s Blackrock Foundry large raid dungeon.

Image Credit: Heather Newman

But plenty of Warcraft items currently for sale for gold in-game do boost player power: crafted items and their upgrades, select “bind on equip” tradeable items from the highest levels of large-group raid dungeons, and the like.

WoW’s Black Market Auction House offers high gold auctions of extremely rare items, though those are more likely to be pets, mounts, and cosmetic items and less likely to be things that add to player performance.

“There are a handful of items that do fall into that category,” Hazzikostas said. “I think honestly this also leads us to re-evaluate some of those things that are [bind on equip], some things at the Black Market Auction House, and the level of item that becomes available there.

“I think it’s important to us that we do adhere to that original ideal: that the strongest items in World of Warcraft are the ones that you earn yourself through direct accomplishment, and aren’t buying from another player.”

No playing the market

Any time a game links real-world cash and in-game currency, you face the danger of fraud and exploits. Hazzikostas said Blizzard has taken a number of steps to reduce it here.

To try to prevent gold farmers from simply putting their farmed gold toward game time they could use to undercut the system, or to prevent people from turning the tokens into a virtual currency market,  Blizzard binds tokens to players at every step from purchase through to use, making them useless to trade.

“We think there will be buyers and there will be sellers. It’s not really possible or sensible to be both. When you purchase a token off the shop, there is literally only one thing you can do with it: You can list it on the auction house for sale,” he said. “You can’t use it yourself, you can’t mail it, you can’t give it to a friend, you can’t destroy it. When you buy it off the auction house, the only thing you can do is to consume it, to add 30 days of game time to your account.”

The way the transaction is structured also reduces the opportunity to play the market to make the maximum amount of gold or cash.

“If you were trying to play the market in the sense of, you think the price might be going up or going down, your only choice really is to abstain or not to abstain,” he said. “If you’re thinking of buying a token and listing it for sale, and you think they might be going for more gold next week, okay, wait a week before buying it and listing it. That’s completely your prerogative, and that’s not really abusive. That’s just a healthy market.”

Protections against fraud

World of Warcraft

Above: Gold farmers used to routinely scam players out of gold by offering bogus codes for rare mounts like this spectral tiger.

Image Credit: Heather Newman

Hazzikostas doesn’t expect the tokens themselves to have much of an impact on the in-game market, since it’s players trading gold rather than botting to create new piles of it, as gold farmers do. He also doesn’t expect to see much reduction in the number of goods for sale if the gold farmers drop out, since they primarily dealt in pure cash anyway.

“Because we ban them very regularly and very frequently, they’re not typically farming items or creating items they can sell, because they’ll typically be banned before those items can be sold,” he said. “They have a short life expectancy. The hope is that their life becomes harder.”

The system may not launch in all regions at once, giving Blizzard the chance to intercept and fine-tune any issues. Players at both ends of the transaction will have protection: If a sale was fraudulent, the company will not “repossess” the token from the buyer, and vice versa for the gold.

Buying will likely be immediate, but selling may come with a small delay, he said. “There’s going to be a fraud review on our end before the transaction can complete on the auction house.”

People with established account and credit card histories will have a faster experience. Others may experience a minor delay. Blizzard may also institute some limits on the number of transactions, which are yet to be determined.

“The limits largely exist as fraud protection,” he said. “You probably don’t have a legitimate reason to need 30 years of World of Warcraft.”

New opportunities for regional sales

The new token system gives Blizzard two new technical tools for doing things developers have never done before: allowing auction house trades to be region-wide, and offering the capability to sell items bought with cash for in-game gold.

Could the new system pave the way for other types of items that are available and visible for sale across an entire country, rather than just a realm?

“Potentially, yes. We don’t have any specific plans at this point,” Hazzikostas said. “But at this point, at the end of the day, a commodities auction house is potentially a commodities auction house. If we wanted some herbs or cloth or ore to be region-wide in the same way, we now have the ability to do so. We’re not necessarily going to jump right into doing that, but it means that we could.”

Don’t expect tons of cash-for-gold items

World of Warcraft Guardian Cub

Above: That cute little guy with the wings is the Guardian Cub in-game pet, one of Blizzard’s experiments with an item that can be bought for cash and sold for gold.

Image Credit: Heather Newman

The same wait-and-see attitude holds for new items players can buy with cash and trade for gold. Blizzard experimented a bit with that concept in the Guardian Cub, a pet that sold for $10 in the company’s store that could be traded freely in game or sold for gold as part of a normal auction.

While the new system offers the capability to do that more directly, Hazzikostas said the earlier experiment wasn’t exactly an unqualified success. The cub was removed for sale last summer after a few years on the market.

“There are some people who want pets, and some people who don’t want pets, and it’s very inconsistent,” he said. Basically, those people who wanted the pets bought them early, and then the market dropped off steeply. He wasn’t encouraging about the chances of seeing that again, versus something like the subscription that everyone is interested in by definition.

“There’s something to be gained in simplicity and clarity on focusing on a single commodity. It’s more liquidity, it’s a smoother experience.”

Players will render the verdict

Blizzard says they’re trying the new system out for a couple of reasons, only one of which is to cut the legs out from under grey-market gold sellers.

“What we’re trying to do is ultimately about freedom and increased access to the game,” Hazzikostas said. “It’s about giving players a new way to play the game and access their game of choice and how they want to pay their subscription on a month-to-month basis.

“At the same time, we see it as a very powerful arrow in our quiver in the ongoing fight against the bad guys, who are the third party gold sellers, the gold farmers who are compromising accounts and pushing this illicit market forward.”

At this point, all developers can do is release the system and see what happens, he said. They think it’s going to be popular; they think it’s going to have a positive effect. But they won’t know until gamers pick it up and run with it.

“I wish I could tell you. We certainly anticipate a very frenetic first few days,” he said. “There’s a lot of pent-up demand on both sides of the equation.”

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