This is a cross post from my blog†here.
I know people have already talked a lot about the Diablo 3 Real Money Auction House and since the game has been out for while now it is pretty much old news, but the release of Torchlight 2 brings into sharp focus how much they had to change the game in order to enable it. I think the arguments that the Real Money Auction House is exploitive are valid but I mostly just relegated them to the "if you don't want it don't use it" category, I think the real problem is how the entire game had to be tooled around this one concept in order to make it work. The Real Money Auction House is the first domino in a chain of cumulatively bad ideas for the game.
Fake Money Auction House
If you include the real money auction house, you have to include the fake money auction house. The fake money auction house gets people used to the idea so that the idea of the real money auction house feels less jarring.
In Diablo type games, the only random element to your build is your equipment. Your skills points, stats (if either are available), or whatever the level up mechanic is, is not random at all. You get X many points at this level and you assign them, but the loot you get is random. You might get a really nice helm or weapon, or you might not. There certainly are items you get from quests and those tend to be the same but they are there to set a lower bar on how bad the equipment available to you can be (same for shops).
This does two things: it creates peaks and valleys in the difficulty (easier when you get good stuff, harder when you don't), and it also makes the character feel more yours. More yours not just because this is equipment you found, but more yours because it feels unique, no one will have the same randomly found items (okay a couple will most most will have very different stuff). Sometimes you luck out and get a really good helm and use it for a long time, so long then when something better comes along you want to keep the old one because you have grown attached to your character looking like that. The auction house killed loot in Diablo 3.
I'm not talking about the Real Money Auction House here but the Fake Money Auction House. What did is effectively normalize the loot system. No longer were you hoping/trying to get good stuff for you or maybe your friends to drop, now you were just going to get anything to drop and put it up on the auction house. Because why not? You would undoubtedly get more †for it then you would selling it to a merchant, and even if it wasn't the best for your class someone will want it and be willing to pay for it. Did a bow drop and not those boots you need? Just sell that bow on the auction house and you can buy a comparable pair of boots you wanted. This meant that the auction house is full of class and level optimum items that you can get for a reasonable price because the ones selling them are other players who just happen to find it and want to trade it in for ideal armor for their class. Basically it turned Diablo 3 in to Recettear: An Item Shop's Tale (but since Recettear was build around the concept it was more fun in Recettear).Actually getting something you want to drop to drop isn't a big deal just more convient.
WoW also had an auction house, but it put in place the soulbound mechanic to control this problem. Now, many of the best items had to be gotten from raids or quests and the few that could be gotten from the auction house cost a great deal of fake money because they were so rare in comparison to the easier to get soulbound items. It also prevented the market from getting over-saturated with items because people couldn't use an item for a while and resell them. But puttign soul bound in a game where they wanted you to keep selling your stuff (in the Real Money Auction House) doesn't make sense so they didn't put this contol in the game.
The worst part is not only that loot was no longer random (because you could always get the best) but it normalized items to the best equipment for that level. Without chance in the loot system it is just another leveling system, except it feels less empowering because you aren't leveling the character but what they are wearing. Loot serves as the element of chance for the character progression, and keeps them coming back for more because who knows what you will find this time. But with the auction house you don't care what drops, because if it isn't optimal you will just sell it and buy what is.
If the goal is to make the auction houses both meaningful and available to everyone then you have to have the game be always online. If you want people to actually pay money for loot then you can't allow people to flood the market with hacked loot and so you have to handle a great deal of stuff on your secure servers, like loot generation and character storage. You would have to have the enemies and damage dealt all be handled on your servers as well because if you let that be handled on the client they could hack their version to deal infinite damage to enemies and just pick up whatever random loot they drop and then sell it. Shopkeepers would also have to be handled by secure servers or people could just hack what they are selling. Pretty much every meaningful interaction would have to be handled on secure servers. In a game where there is no Real Money Auction House these are all not a problem, because if you want to hack your own game then why would I care? But if you could then sell that stuff to other players then everyone is going to start caring.
They could've made two versions of the game, one always online and one not, and never let the two mix. It would be a surmountable technical problem but since the goal is to keep everyone within spending distance of the Real Money Auction House †the question moves from "How do we surmount this problem?" to "Why would we surmount this problem?".
Because all of the meaningful interaction stuff had to be done online (for above reasons) they can't allow you to mod the game. They could let you mod the UAI like they did with WoW but that is about it. Look up the modding scene for Torchlight or Skyrim and then try and tell me that not being able to have access to mods for this or any game is a good thing. Some games I can accept are incompatible with modding the basics of the game (like WoW again) but this is a game that only requires a persistent online state (and thus no modding) because of the Real Money Auction House.
In Diablo 3 you can only have 10 characters per account. Because each person can't be responsible for their own save files (for fear of the haxors) Blizzard has to be and they have only a finite amount of space to store everyone's characters. Now you might be saying that "but 10 is all you need" and you would be right and that is actually the real problem here.
You do only need 10, 5 for Hardcore and 5 for non-Hardcore. 5 for each because there are only 5 classes and beyond what class you chose there is no customization of your character(okay, class and gender). Every single Monk is the same as every other Monk of the same level (especially with normalized loot). If you had Diablo 2 style of permanent meaningful customization choices you couldn't only have a finite number of characters because if you did it wouldn't matter if you gave everyone 100 slots people would fill those up with distinct characters and need more slots. Remove those meaningful distinctions though, and you only need enough to give everyone a hardcore and non-hardcore character.
Perhaps this is just a happy coincidance for Blizzard, and they already intended to remove the permant customization of each character before they realized they would have too. But the fact remains, you couldn't include that element in a game with a limited number of character slots.
The Real Money Auction House was bad enough in it's own right, but it forced an online persistence onto a game that didn't just not need it but actually suffered for it. I did want to end this by saying though, it still is a good game. It is very well polished and full of good ideas, like the idea of base skills and then custom variation of those skills is very interesting, also the replacement of basic attacks with interesting class specific attacks is great fun. I really do like a lot of the ideas this game puts forth a lot. But the Real Money Auction House crippled so many parts of the game that I can only wonder how great the game could of been if they didn't include it. Well I wondered that until Torchlight 2 came out.