Blizzard

Yesterday was kind of a shit day.  I got to work around 7 am, ran around like a chicken with my head cut off and didn’t get home until after 6:30 pm.  To make matters worse I wound up skipping breakfast with the idea of just grabbing something from the cafeteria in the basement…  but apparently they changed hands and are no longer open at a reasonable hour for breakfast eating.  When I got home I ate some left overs and planned on largely chilling out on the sofa with my laptop, however within minutes I was falling asleep at the keyboard.  Instead of opting to consume caffeine to forcibly prop my eyelids open like I do so many nights…  I simply went with it and crashed hard.  I know I woke up a few times, one of which I vaguely remember going to the kitchen to get a drink…  but for the most part I was completely dead to the world not really becoming aware of my surroundings until about five minutes before the alarm was set to go off this morning.  Bel is still a very sick Bel, and while I am taking some stuff whatever respiratory hell that I picked up at PAX South seems to be lingering.  Unfortunately work is absolutely madness right now and we are pushing towards a hard deadline…  one that honestly made me think if going to PAX was a good idea at all in the first place.  So I am suffering through it, and largely just collapsing into my desk chair and trying to think clear thoughts…  that is until yesterday when a firestorm erupted not even vaguely related to said deadline.  All of the sudden I am back in the same meetings I attended six months ago… and being told to develop the same solution I suggested six months ago but was largely told wasn’t needed.  Suffice to say… it was a miserable day to be a Bel.

As a result I don’t have much that is exciting to talk about other than the fact that something strange happened.  We had essentially a virtual run on the banks in the form of the WoW Token going from 60,000 gold to 115,000 gold and back down to around 66,000 gold all within a 36 hour period.  So what caused this?  Well quite simply the law of supply and demand, but more importantly the release of the ability to fund “Battle.net Balance” from consuming a WoW token instead of simply trading it in for subscription time.  If you will indulge me in a quick side bar here…  didn’t Blizzard say that as far as branding goes “Battle.net” was going away?  I find it bizarre that they are rolling out a new feature with this same branding instead of simply calling it “Blizzard Balance” or something super generic like that.  Essentially all of those folks with pent up desires for products on the Blizzard store, suddenly had the ability to cash in their bankroll and buy those things pushing the demand for tokens way higher than the demand for actual gold.  In truth this should have been foreseen given that there will always be a constant need for things on the store that previously cost cash, but there is a constantly dwindling number of aspirational gold needs in the game.  Sure you could really drop a silly amount of money and buy outright that 2 million gold spider mount…  but at the end of the day it does nothing but sit there as a supposed status symbol.  Whereas in the past with the Tundra Mammoth and Yak… those greatly improved game-play especially when it came to leveling alts.  However I won’t lie that the thought of being able to sell a token and purchase the Alliance motorcycle did cross my mind as something I might be willing to do.

What I want to talk about more than anything else is the absolute windfall that this means for Blizzard.  When you purchase a token for $20 it can be then traded for goods valuing $15…  be it in the form of a monthly subscription or now in $15 of Battle.net balance that can then be spent on anything from physical merchandise to the digital services they provide.  Every time a token changes hands Blizzard makes $5 off the top, regardless of what it is spent on.  My theory is that a lot of the tokens over the last two days were spent purchasing digital services… like character moves or renames… things that folks had been wanting to do for a long period of time but just been unwilling to cough up hard currency to make it happen.  If that is the case then every single one of these token purchases also essentially amounted to pure profit.  I have been a long time critic of the prices that Blizzard charges for character moves or renames… when essentially they are charging for access to what is now a completely automated and scripted interaction.  Once upon a time there was a labor cost associated with these services, because someone manually kicked off a SQL script to make it happen…  however that has not been the case for over a decade and the price never actually went down.  If folks spent their tokens on digital game purchases, or in game items for Hearthstone, Heroes of the Storm or Overwatch… then again that is mostly pure profit.  The only time there are serious physical expenses factoring in is if someone purchase tangible items on the store like a Murloc plush or an Overwatch hoodie.  Even then…  they are still making a decent profit on that item or they would not be selling it.  Basically the Token system allows Blizzard to double dip and make a profit on the front end and the back end of every purchase… and at the same time ensures that the folks that are grinding out the gold are actively playing their properties.

In truth I think we can expect one of these “runs on the bank” each time something new is released from Blizzard.  A new champion in Heroes of the Storm… bam the token price inflates as folks scurry to purchase it.  The Diablo 3 expansion pack that adds Necromancers releases…  same thing… a rush to sell off some gold to purchase the thing that folks want.  I think of this much like the lottery system, in that once the reward gets to a certain point… it brings people out of the woodwork that would never normally buy tickets.  Personally that price point is somewhere around 300 million dollars for a lottery, because that prompts me to start buying the occasional one off ticket here and there on the vague chance that I will actually win.  For WoW players that price point seems to be 100,000 gold for the US economy and 200,000 gold for the EU economy.  The bizarre part of this is that I don’t think the balance feature is even available on the EU realms yet, and it absolutely had no effect on China, Taiwan, or South Korea yet… but in truth those three markets are madness anyways. Regardless… the fact that players can now cash in their gold for tangible goods… that they could then in theory sell on secondary markets like Ebay tells me that we are going to change the dynamic considerably.  You have just essentially let players start turning game time in to real dollars, which is a strange paradigm and one that is not entirely dissimilar to the traditional third party gold markets.  Granted this is going to be a SUPER lossy process, but one that will exist nonetheless.  One that more than likely only the most sage of gold making wizards will ever figure out how to tap.  Things are going to be really strange from this point out.