Two days ago, I had said to expect a new Battle.net Terms of Use to roll out soon, and once the new contract was live, users (who even signed the older one) would be presented with a new TOU that contains D3 / PayPal / RMAH related revisions.

It just went live earlier this morning.

The new Battle.net Terms of Use are actually dated "Last Revised December 10, 2011", however the official US link to the TOU (as of today) is still showing the old May 25, 2010 contract.

Interestingly, this TOU was updated on December 10, but it has only gone live just recently for others to see. It wasn't posted online for a good month and apparently Blizzard has been sitting on this new contract since December 10. On December 9, by the way, Blizzard first revealed the "Battle.net Balance" system and stated that it would be rolled out within a few weeks (it's been over 8 weeks now.)

You should see this information hit fan sites and the larger blogs later today or tomorrow.

As I had said in the earlier post, the sudden appearance of the old Terms of Use was just a prelude to a new TOU for users to sign.

Omega, Blizzard's Forum MVP, however stated that this was not the case at all. He reassured users that this was actually just an old feature, and the recent appearance was nothing more than Blizzard simply resetting the "has already read" checkbox to remind some users to review it again...

Daeity 1, Omega 0. :)

New Knowledge Base Articles Too

Some users are reporting that they were able to visit their eBalance Purchase page briefly, but that feature has now been removed and disabled. (Original US link, EU link.)

There are also new Support articles live that contain a wealth of new information. These are the US links, but EU users can search for Battle.net Balance or PayPal to see the new KB articles.

One was last updated January 20, with the others just yesterday afternoon ("Updated: 1/30/12 2:37 PM".)

Battle.net Balance Frequently Asked Questions (FAQ)

Syncing PayPal with Battle.net

Adding Funds to Battle.net Balance

Changes to the Terms of Use

Here's what a cursory glance revealed. If I missed anything important, please let me know and I'll add it.

• A brand new section all about the new PayPal/RMAH system:
  

  6. Storing Value on the Account.
  
  A. The Account can be loaded with funds that can only be used to purchase goods and services on Battle.net. The Account is not a credit line, overdraft protection or deposit account. Unless otherwise required by law or permitted by this Agreement, all balances on the Account are non-refundable and may not be redeemed for cash. The Account does not expire, and you will not be charged fees for any reason. Funds which are loaded onto an Account do not accrue interest, and are not insured by the Federal Deposit Insurance Corporation (FDIC).
  
  B. To load value onto the Account, go to https://us.battle.net/account/management/ebalance-purchase.html and follow the instructions provided to you on the page. All Account transactions are governed by the Terms of Sale, which can be viewed at https://us.battle.net/account/management/transaction-history.html. The minimum amount that can be loaded to an Account is $1.00, and the maximum daily Account balance is limited to $200.00. Blizzard reserves the right to change the maximum and minimum amounts at any time. You may load different currencies onto the Account (e.g., US Dollars, Mexican Pesos, Chilean Pesos, Argentinian Dollars) in order to engage in transactions on the Diablo III Real Money Auction Houses that use those currencies. The value loaded onto the Account shall be determined by converting the value of each of the various currencies that you have loaded onto the Account to US Dollars using the currency conversion formulas posted on http://online.wsj.com/mdc/public/page/2_3021-forex.html. All amounts loaded onto the Account are held and denominated in U.S. currency. Blizzard will not send you a statement of itemized transactions on the Account. In order to check the balance loaded on the Account, or review recent transactions on the Account, to go https://us.battle.net/account/management/transaction-history.html and follow the instructions on the page.
  
  C. Funds loaded onto the Account are used like cash for purchases on Battle.net, and you are responsible for all transactions made by someone using the Account. If you suspect that the Account has been compromised, you should contact Blizzard Customer Service at http://www.battle.net/support. The balance on the Account will only be protected from the point that Blizzard issues a message to you indicating that Blizzard has received your notice that the Account may have been compromised. From that point forward, Blizzard will take actions to freeze the remaining balance on the Account, and will unfreeze the Account once Blizzard has returned the control of the Account back to you.
  
  D. If Blizzard believes that the Account contains funds acquired illegally, either by means of compromising other Accounts or otherwise, Blizzard may remove those funds, suspend your access to the Diablo III Real Money Auction House, terminate the Account, and/or exercise any additional legal remedies available.
  
  E. If you agree to purchase goods or services from Blizzard and thereafter default upon your obligation to pay for such a purchase, you hereby agree that Blizzard shall have the right to freeze any funds currently loaded onto the Account and/or to remove and use those funds to fulfill your payment obligations in full or in part.

• The "9. Ownership" section has been expanded to include the RMAH:
  

  C. Virtual Items. Blizzard owns, has licensed, or otherwise has rights to all of the content that appears in the Service or the Games. You agree that you have no right or title in or to any such content, including without limitation the virtual goods or currency appearing or originating in any Game, or any other attributes associated with the Account or stored on the Service. Blizzard does not recognize any purported transfers of virtual property executed outside of a Game, or the purported sale, gift or trade in the "real world" of anything that appears or originates in a Game, unless such transfer is made using a marketplace administered by Blizzard, including without limitation the Diablo III Real Money Auction Houses.

• The whole section "7. The Blizzard Online Store" has been cut out of the TOU.

• The "Account Suspension/Cancelation" section has been expanded to include "a Game-specific Terms of Use", rather than just the Battle.net TOU and other agreements.

• A new entry in the "General" section has been added to let you know Blizzard will be collecting a bunch of information from your PC:
  

  E. Collection of Non-Personal Data. Blizzard shall have the right to obtain data that cannot be used to identify you from your connection to the Service without any further notice to you. Certain Games playable on the Service include a tool that will allow your computer system to forward information to Blizzard in the event that the Game crashes. This tool will collect system and driver data from your computer system during the crash, and forward a report containing that data to Blizzard.

• The "Massive Inc" in-game advertisements section, that was originally created for Starcraft 2, has been completely removed and replaced with a more general "expect there to be advertising in the game."
  

  16. DISCLOSURES; THIRD PARTY FEATURES.
  
  A. Advertising. Blizzard’s Games and the Service may incorporate third party technology that enables advertising on Battle.net and/or in certain Games playable on Battle.net, which may be downloaded temporarily to your personal computer and replaced during online game play. As part of this process, Blizzard and/or its authorized third party advertisers may collect standard information that is sent when your personal computer connects to the Internet including your Internet protocol (IP) address.

The Interesting Bits From All Of This

• Blizzard and it's third party advertisers may collect "standard information" from your computer system. They were very ambiguous about this.. they did not specifically state "non-personally identifying information" like Warden and they stated that their advertisers may collect information from your PC when it's connected to the Internet. This could pretty much mean anything at all and at any time, including personally identifying details.


• Users worldwide will soon be able to use PayPal to purchase anything you want from the Blizzard Store, and it's no longer just limited to WOW Subscriptions.


• There seems to be a PayPal / Battle.net location check, like what I was predicting months ago.


• The Battle.net Balance maximum limit is $500.00 USD.


• You can add funds in increments of $10.00, $20.00, $50.00 or $100.00. Or, users can select "Other Amount". According to the Terms of Use, a minimum amount of $1.00 must be loaded and there is a maximum daily balance of $200.00 permitted.
  


• If Blizzard suspects that you cheated in any way to acquire your Battle.net Balance funds, they can remove all of your Battle.net Balance and suspend your access to D3 or your Battle.net account. There are a few other sections that also discuss the non-refundable conditions for your Battle.net Balance credits.


• If a prepaid credit card is declined, there's a $1.00 temporary hold of funds for each transaction attempt.


• Regional stuff: ".. you will be able to add value to your Battle.net Balance using your local currency (in EU, for example, players will be able to use Euros, GBP, and RUB). In certain regions where game realms and servers are shared by players in multiple countries, you will be given the option to choose one single currency. However, please note that Battle.net Balances for different currencies are tracked separately and cannot be used interchangeably. For example, you cannot use Battle.net Balance purchased using U.S. dollars in a non-USD-based auction house, and you are not able to transfer Battle.net Balance purchased in one currency to or from Battle.net Balance purchased with a different currency."


• Right now, you can't transfer B.Net Balance as a gift to others, but they plan on adding that feature in the future.


• Battle.net Balance cannot be used as an automated payment method for recurring WOW subscriptions.


• This TOU was revised specifically for Diablo 3, but you can expect another revision to happen as the SC2 Marketplace gets closer to completion.


• If you're a regular reader here, you'll know that I had been anticipating these changes this week since they were needed as a precursor to the release date announcement. Once the announcement is made (Monday, Feb 6 being the most probable at this time), the Battle.net Balance system will be fully implemented with the D3 Digital Pre-Download being made available sometime afterwords. After this is done, it will also be followed by new posts and official announcements about the PayPal and B.Net Balance system with instructions on how players can setup their accounts and start using it right away. All that remains now is if the actual release date will be 2 months from the announcement (traditions), or a condensed timeframe (which has been discussed in the past.)

On a final note.. boo-yah.

* UPDATE:

The "Battle.net Balance" and "PayPal Syncing" Knowledge Base Articles have just been removed by Blizzard. :)

I'm not sure if this is just temporary, or if they weren't supposed to reveal these Knowledge Base articles until the announcement (or later this week). If you didn't catch them earlier, you can still see their Google cache.

Go to Google.com and type:

"cache:http://us.battle.net/support/en/article/syncing-paypal-with-battlenet"
or
"cache:http://us.battle.net/support/en/article/adding-funds-to-battlenet-balance-3100032"

* UPDATE:

The "Syncing PayPal with Battle.Net" article is back up, and it's now showing an "Updated: Jan 31, 2012".

The "Battle.net Balance" article has been down for several hours now. It's possible that the Battle.net Balance article wasn't supposed to be put up until another announcement (front page post) took place first. Obviously, right now players can't even add money to their Battle.net Balance accounts so the support article is useless.

As you know, I'm still waiting for that Battle.net Balance to be implemented, and I have suspected for some time that Blizzard may be having some PayPal or RMAH/Balance integration issues.

Coming Soon: Battle.net Balance
We’ll be rolling out the new Battle.net Balance feature in the weeks ahead.

It's been over 7 weeks now, and the Battle.net Balance feature has still not been rolled out.

I also noticed something else related to this delay. About a week before Mike's "Soon Was Too Soon" post, Blizzard also revealed that they were going to allow PayPal to be used to purchase Blizzard products and services on Battle.net. However this time, it would be available for several regions, and not just limited to WOW Subscriptions for NA users only.

PayPal will also soon be added in several regions as a payment option on Battle.net, providing another convenient and secure payment method for digital purchases of Blizzard products and services.

We’ll share region-related specifics, as well as further details on everything mentioned above, in the near future. Stay tuned!

This information was supposed to be revealed in the "near future". And, I assume that based on what they're saying, that both the RMAH Region Information and PayPal integration details would be revealed at the same time. Some of the RMAH Region details have already been revealed, but what happened to the PayPal system? It's been 5 months now.

Finding Delays Where They're Not Telling You

It's been made quite clear that the past (and current) delays have not been a result of game development process. They've had the luxury of extra time to add new features and content, there's been no crunch time, no rush, and due to Jay Wilson's recent "major update", we've learned that they're not even adding new content, but rather just making minor changes and deleting content.

Since we're left in the dark, there are other signs of delays to look out for that might give us an idea of what's going on. For example, if we discovered that they were having major hiring problems, not enough customer support, or enough developers on a game, we would know that it would be a reasonable explanation for delaying the game.

The South Korea Approval issues definitely had an impact to their timeline. And these other delays in announcements are also confirming my suspicions that PayPal and B.Net Balance systems have also caused a major delay in their release schedule.

Even their special definition for future time was changed. Mike said that "Soon Was Too Soon", admitting that even their expectations for "Soon" had to be pushed back significantly because "Soon" didn't end up being what they thought their "Soon" release would be. I hope that made sense.

As well, both "Near Future" and "Coming Weeks" have always meant about 2-3 weeks for Blizzard. But in the case of PayPal and the B.Net Balance roll outs, they became several months instead.

So, the Battle.net Balance system was delayed (we can't charge up our accounts with PayPal or any other credit system yet), the RMAH Cashing Out feature with PayPal was delayed, and the PayPal system for purchasing Blizzard Store items was delayed.

Are there internal problems with PayPal? Is this a technical or systems integration issue? Are there legal problems? Is PayPal getting cold feet after hearing about the SK Government Gambling issues? After all, online gambling (in itself) isn't illegal in most US states, but the transactions to/from online gambling sites are illegal. PayPal would be taking far more risks (UIGEA) than Blizzard in this case.

Or, perhaps Blizzard is implementing new security systems internally (and with PayPal) to ensure that prohibited countries are not able to participate in the RMAH? (A difficult task considering that SK players can register a US B.Net account, and it's a region-free game.)

I've talked about these subjects before though. When PayPal is finally implemented, I suspect that there will be new security or regional payment restrictions in place to limit players to specific countries (both through their B.Net Account and PayPal.) I don't think there's anything stopping users from buying the Region-Free Diablo 3 from overseas retailers, though, and playing it in their own country. That's if they even know it's region free. It's something that still hasn't been officially announced.. and for good reason.

Selling Skills

While on the subject of these PayPal announcements and the RMAH, there's one subject that I'm surprised more people haven't talked about. I've known about it for a really long time now, but I never really had a reason to talk about it; Blizzard wants the RMAH used for selling skills and not just items.

It's actually a really smart business move. Rather than limiting yourself to selling items (which improve the damage of skills), why not just sell the skills and their effects too?

When PayPal first announced their partnership with Blizzard, they pointed out Blizzard's intention to sell runestones (which represent skills) on the RMAH:

They’ll also be able to use PayPal to cash out any real-money proceeds they receive from the sale of items — such as weapons, armor, runestones, and other loot obtained in the game world — via the currency-based auction house. (There will also be a separate gold-based version of the auction house that uses in-game gold for item transactions.)

By the D3 Dev Team wanting to make runes so that they could be sold on the RMAH, I think that this was the reason why they had so many problems deciding on an approach, and why they had so many iterations of the rune system.

I imagine that the business department told them what they wanted done, and how they wanted to ensure that the runestone (skill) system had a monetary aspect. Because of this pressure and restriction in place, it changed their design principals and they had to work around the limitation rather than having the freedom to innovate. It's no surprise they had a lot of problems creating the rune system.. it had to be something that Blizzard could profit from.

The problem, though, is that the RMAH was designed for only high-end items. So, they would have had to give runes low drop rates in order to make them rare enough to sell on the RMAH. This would have seriously limited the development and growth of players causing frustration knowing that they would have to shell out cash for skill upgrades (buying rare runestones from the RMAH.)

I wonder if there's more of this planned or in another format? More testing of new concepts in D3 to see if they're successful enough for future games possibly? :)

Skills vs Items

If I was responsible for a game design, I would want to leverage the RMAH as much as possible and I would (try to) create a non-obvious method of selling skills/abilities without actually selling them directly as "skills". :)

For example, as players level they are rewarded with new skills when they hit certain milestones. However, for the skills to actually be useful, I would want the players to purchase upgrades to the skills that add new strategy, different behaviors, and new visual effects. On its own, "Kick" is pretty mediocre.. but when you purchase "Fire Kick", it's suddenly a great AOE attack. Makes sense right?

Collecting items is a lot of fun, but there's much more enjoyment to be gained when you are rewarded with new abilities. It's something you can see, it's unique, it's something you use actively (not a passive effect), and it can completely change your strategy or gameplay. Because skills change your gameplay, it's also a method of appeasing the players need for content consumption. Basically, gameplay needs to be "mixed up" to keep players interested. (Which is why I'm really worried about Diablo 3's "dead zone". There are no new skills to be achieved, and the grind won't be as much fun anymore without clear rewards and achievements with each new level.)

Gaining new skills is actually a more enjoyable reward system than items, leveling, pets, or achievements. Selling items or pets are easy, but trying to "sell skills" is a very difficult task since players associate it with necessity for growth. If they work hard, they should be rewarded.. there shouldn't be another limitation (monetary at that) on necessary growth. "I have to PAY for that skill? WTF!"

Players should be sort-of used to this, though. When they hit a certain level, they visit vendors, and they pay for the skill. But that's all part of the game, and it's much different when they see a skill being sold for cash by another player who has it.

Even though it's a really great idea to sell skills (from a business perspective), it's really hard to pull off. If they were to lower RMAH fees, low-medium rarity items and skills could be worked in, but that cuts down on their profit. And even then, it's skills for cash.

I think the only way to do it, that would appear fair to customers, is to make skills a reward system from hard work. You can have three options available: work hard to get it yourself, work hard in something else (gold farming) and buy it, or simply pay cash for it. So, skills could be obtained multiple times by the same person and sold to other players, but they need to work hard to get it each time and it results in cash payment. It's something that CAN NOT be left to random chance, it must be a clear goal at the end of certain timely tasks. Items can be random, but skills can't.

Rather than selling skills, perhaps developers should view it instead as an important piece of content consumption. You might not make money from it, but you can reduce future expenses (eg, development time, creativity, hiring staff.)

Blizzard has just announced that PayPal is their third party vendor for managing the Diablo 3 payment service.

We're pleased to announce that in most regions, PayPal will be our payment-service partner for the Diablo III auction house, allowing players who trade with real-world currency the ability to cash out the spoils of their battle-torn adventures via a PayPal account.

PayPal will also soon be added in several regions as a payment option on Battle.net, providing another convenient and secure payment method for digital purchases of Blizzard products and services.

We’ll share region-related specifics, as well as further details on everything mentioned above, in the near future. Stay tuned!

Let me put on my shocked face.

I had thought it was pretty obvious when the two got into bed together to put other PayPal gold sellers and potential Blizzard competitors out of business. Now you why PayPal was so eager to help out Blizzard.. they must have been in negotiations. :)

This also means that PayPal might be unintentionally engaging in potentially illegal gambling once the Real Money Auction House is live. Should be interesting if the FBI launches a probe like they did in Second Life. I would love to see the matter finally settled on gambling within virtual worlds and Activision Blizzard is just the type of company to create the legal precedent.

I guess this also means that the RMAH will have at minimum 4 cuts now: the Listing Fee cut, the Transaction Fee, the Cash Out cut, and the PayPal Cash Out cut and other miscellaneous fees. There's also the government's cut. All I know is that when the Auction House fees are announced, there are going to be a lot of pissed off users. I suspect that $1 in revenue is quickly going to become a 50 cent profit.

I must have missed this, but apparently the new Diablo 3 RMT Auction House transactions "will be managed by a yet-to-be-announced third party vendor." [LINK]

During their other interviews with GamePlanet, Blizzard spokespersons were very careful not to mention the word PayPal when speaking about RMT.. but they were perfectly casual about comparing their new system to EBay. In the other news releases from August 1st I don't recall them mentioning PayPal either.

What do you think?

If they are getting into bed with PayPal, it would certainly explain how they got PayPal to hunt down and kill all of the RMT competition out there. There must have been something more to that story. Can't wait to see who the third party vendor will be, but my money is on PayPal. :)

So, it was just "announced" that Blizzard and PayPal are now in bed together. (Technically, Markeedragon talked about it back on the 20th, but it's now making the rounds on other news sites.)

They will be walking together hand-in-hand fighting those dangerous virtual gold sellers. Take note, though, that they're targeting gold sellers & merchants, not gold buyers. They have no idea who buys gold except for those (who were caught) within the World of Warcraft.

But, there are two things very interesting with this whole situation:

1. Blizzard and PayPal are calling it an "intellectual properties violation" and that it "infringes upon the intellectual property rights" of Blizzard for the sale of virtual merchandise. We all know, of course, that it's not illegal (for the moment) to buy or sell virtual currency or commodities.

This is more about the wording, though. PayPal isn't saying it's illegal.. "violate" could just as easily have been swapped out with "annoys", "pisses off our partner", or "hurts Blizzard's feelings." But, those just don't sound as intimidating.

2. How did they find out and confirm the PayPal IDs of the gold sellers if they're not publicly advertised?

There was only one way they could do it: registered an account on various gold seller websites, and bought WoW gold from them. =]

So, Blizzard violated their own internal and external policies, the World of Warcraft Terms of Use, Gaming Policies, and even violated their own intellectual property (which is also now PayPal's policy).

A little hypocritical don't you think? Maybe I should change the headline to "Blizzard Buys WoW Gold!". I wonder if Blizzard's PayPal account is going to get banned now.. =]

In order to keep this up too, Blizzard will need to continue buying virtual gold from sellers as well (although right now, they just targeted the biggest suppliers). They can't just tell PayPal to ban certain PayPal IDs (email accounts) that are posted on webpages or forums for example. They'll need to confirm in-game that the person is indeed selling gold (ie, setup a sting operation.) Otherwise, social engineers and troublemakers could just create fake gold seller webpages, post PayPal email addresses, and get them banned.

Anyways.. this might not have as big of an impact that Blizzard is expecting. Gold Merchants have many payment alternatives at their disposal and this was just a bad business decision made on the part of PayPal. Unless, of course, there were other (more invisible) factors at work that "encouraged" PayPal to change their stance on the matter.

This is very good news for PayPal's competitors though. =]

After all, this new process will not impact the market demand for virtual currency.

So, if there are any smart online payment intermediaries out there that compete with PayPal, they should get into communication with these companies immediately. (If you work for a PayPal competitor, talk to management right away as these businesses will be looking for a new service provider and they transact tens-of-millions per year.) =]

This may also open up a new market for independents and smaller sellers. Since BlizzPal is targeting the larger gold sellers, we might see a shift in power or a distribution of power to many sellers.

I'm curious how this will effect gold prices. The big gold sellers might drop prices (a lot) so that they can offload their stocked gold as quickly as possible. Then once the dust settles, gold prices might end up being higher then they've ever been in years (same demand, but more difficult, more risk involved for the sellers, more independents, etc). Should be fun.

* UPDATE:

Apparently, the infringement notices are targeted at gold seller websites (that use PayPal) and not the individual PayPal accounts themselves. So, I guess Blizzard hasn't been confirming anything - but rather just telling PayPal to check their own accounts to see who owns the website and ban them? (Or maybe there's a combination of both.)

What I do know is that there have been multiple waves of these threats from PayPal over the past 2 months and they have mailed big and small sellers alike. Many PayPal accounts have already been banned, while the larger gold sellers are attempting to stall for as long as possible.

Since this has been going on since December, I wonder if it's one of the reasons why gold prices fell so dramatically after the Cataclysm expansion pack..