How does this business model work?

[Sathias]

The one thing I don't get about D3 is how they are going to make it work from a financial point of view.

With no subscription fee, as soon as we start playing we are a financial drain on the company. To make things worse, they have given a whole heap of accounts away to people for free, to keep subs numbers in WoW going. Then, to put the icing on the cake, the planned RMAH has been delayed, which was going to be a core part of ongoing revenue. There is no free-to-play model like LOTRO or DDO, to sell items or buffs in game for further direct revenue.

And it would seem from tonight's effort that the amount of technical resources they need to keep this thing running is not a trivial amount.

Does anyone know if there are plans to have regular DLC packs (new acts, classes etc) to drive ongoing revenue?

[Mugsy]

Does anyone know if there are plans to have regular DLC packs (new acts, classes etc) to drive ongoing revenue?

I'd like to see the feasibility study for the RMAH. Blizzard have definitely done the maths there IMHO so I bet they're expecting a reasonable income from there. However, Blizzard have stated that they will definitely be looking at expansion packs of some sort. I haven't finished the game yet, let alone finish Act 1 (it's a problem when one plays as all 5 characters simultaneously), so I wouldn't know where the plot could go from here.

[Fireslide]

There'll be an endgame economy that is worth something. People will pay real money for the good items when it's available.

It might run at a loss for a while, but I suspect it'll turn a profit. After all, the auction house is anonymous, there's no stopping blizzard from putting on crafting materials, items and getting real world money for it. They control the total supply.

[Sathias]

It might run at a loss for a while, but I suspect it'll turn a profit. After all, the auction house is anonymous, there's no stopping blizzard from putting on crafting materials, items and getting real world money for it. They control the total supply.

Interesting point re sellers being anonymous. With these launch issues combined with the RMAH delay, the big risk for Activision/Blizzard is that they fracture the player base and have a much smaller group of customers to sell to.

I would hazard a guess there are a few cold sweats and sleepless nights happening at Blizzard HQ at the moment.

I'd like to see the feasibility study for the RMAH. Blizzard have definitely done the maths there IMHO so I bet they're expecting a reasonable income from there.

Yeah that would be interesting info to see for sure. They mustn't have taken delaying it lightly. They will have to rely on expansions of some kind because without ever increasing mudflation, people will get to the point that they don't need as many upgrades, and sales will fall off a cliff.

[Fireslide]

They can add new mobs/events and items to farm for. Like the hidden level. I'm sure they have expansion packs planned.

[revengous]

I think the online auction house will work - how many people play for the perfect item?

I think the delay is fine - everyone seems to be playing so they've got plenty of money right now

[Mugsy]

I'm sure they have expansion packs planned.

Totally agree. When doesn't Blizzard have expansion packs planned?

Just look at the current line up in the Warcraft and Starcraft series... it's expansions galore. I wouldn't be surprised if a decent chunk of Diablo 3's 12yr development included working out expansions for the game.

[Fireslide]

Thinking more about it, I've figured it out again.

Each account has a finite amount of storage space. So for every account in the game, the economy can potentially grow by a certain amount. It will reach a point where either you're farming more gear than you can sell, so if you don't want to lose it's value, you buy another account for D3. Or they'll sell for real world money, extra tabs on the stash. 3.5 million players potentially spending $15 to $30 for extra storage space, or auction space or more auction slots or options.

Currently if I have enough items/gold, I can buy a new D3 account for another $60 or so, and load it up with items and auction them off, so I have potentially twice the selling/moving power. If they offer tabs/more slots per account for real money, people will pay it, just so they can move/store more stuff.

The other thing, is that when everyone is in the endgame. People will stop putting the best items on the gold AH and onto the RMAH.

All up I think the business model will work. They've got many potential ongoing revenue streams, the main thing they are trying to do is create a market. Inferno is meant to be unbeatable/unfarmable because that way we're forced to use the AH for upgrades. Gold inflation means, people will value their real world time more and say $5 for an item that'd normally go for 2,000,000 gold is a much better deal.

[Village idiot]

I saw a figure of a 15% cut for blizzard when transferring funds or something for the RMAH. I didn't pay much attention, because it doesn't really interest me.

On the other hand. The next expansion - brought to you by Pepsi Max. In game advertising, ohhhh yeh!

[Auld]

After finishing D3 I really felt like it was missing an expansion already. ACT 3 and 4 felt entirely too short and I'm not sure why but I felt let down by the bosses...no sub bosses maybe? OR no surprise its not Baal its Duriel instead moments.

I also missed fighting through several levels of hell.

They will definitely make cash back with expansions and RMAH. I think they biggest thing for them being a public company is to not lose WoW subs. When they announce another loss of 500k subs their share price dips significantly and thats where they will lose serious cash.

[Agent_Dark]

After finishing D3

You've cleared Inferno already? Because otherwise you haven't finished the game...

[krapma]

After finishing D3

You've cleared Inferno already? Because otherwise you haven't finished the game...

If you've only cleared normal, then you haven't even started the game

[Makena]

After finishing D3

You've cleared Inferno already? Because otherwise you haven't finished the game...

You have finished the story though, which is all a good number of people will do I expect.

[Auld]

Er yeah I have finished D3's storyline, which is what I was **** about. In no way have I stopped playing or stopped enjoying slawing monsters. Read things in context guys, not every post need a "aha I got you" reply.

[Mugsy]

Twas just chatting with my bro... apparently, 1 million gold will sell for USD$19 on the RMAH... I dare say this is being dispensed by the Bank of Blizzard.

So we can probably expect items to be jacked up in price as people know buyers have a means to purchase in game gold and can afford paying more for items