Friday, May 09, 2014

Blizzcon Ticket Sales

I didn't try to purchase tickets for Blizzcon, but by all accounts it was another fiasco. Effectively causing a self-inflicted Denial-Of-Service attack and then forcing people to luckily connect just doesn't seem like a good method of selling tickets. Blizzard should be able to do better.

The major problem, though, is one that most people are not going to be happy to hear: Blizzcon tickets are too cheap.

Yeah, I know, $200 USD isn't cheap. But more people are willing to pay that price than there are tickets available. That gap causes the rush and the bad problems. It also provides an opportunity for arbitrage, which adds scalpers to the mix, increasing the amount of issues. Blizzard tries to clamp down on ticket re-selling by authenticating tickets, but that has it's own flaws. Not to mention the possibilities of scams.

These types of problems are the issues that prices exist to solve. Raising prices would smooth out all these issues. Yes, it sucks that some fans won't be able to afford Blizzcon. But a lot of fans already can't afford it. Making the process smoother and taking the scalpers out of the mix would offset those issues. And at the end of the day, everyone who attends Blizzcon is a fan.

Here's how I would sell Blizzcon tickets:

1. Use a Dutch Auction

A Dutch Auction is an auction where a buyer puts in a bid for a quantity and the price she is willing to pay. When the auction ends, the price is lowered to the point where all items sell. Every buyer with a bid above that price gets the quantity of tickets they desire, and they all pay the lowest price.

For example, there are five tickets to be sold. Anna is willing to pay $1000 per ticket for 2 tickets. Betty is willing to pay $500 per ticket for 2 tickets. Charity is willing to pay $450 for 1 ticket. Daphne is willing to pay $400 per ticket for 2 tickets. Elsa is willing to pay $300 for a ticket. The five tickets are sold to Anna, Betty and Charity for $450 per ticket.

Essentially, this allows the prices to float, and the true price be "discovered". It drives scalpers out of the process, because there's no opportunity for arbitrage anymore. In the example above, if Charity is (ironically) a scalper , who is she going to sell her ticket to? Anna and Betty already have tickets. Daphne and Elsa are not willing pay enough to turn a profit.

You can set up a long period where people can log into Battle.net and place their bids. Depending on how credit card pre-authorization works, Blizzard might even be able to detect fraud earlier in the process.

It is a bit more complicated than normal rules for buying and selling, but we're all gamers. Learning the rules to new games is our raison d'etre.

2. Establish a Reserve Price and Donate the Excess Money to Charity.

Pick the price Blizzard needs to pay for the endeavor. Perhaps the current $200 dollars. That's the minimum price that tickets will sell for.

Then donate the amount over the reserve price to charity. So if the tickets sell for $450, $200 goes to Blizzard, and $250 goes to the charity.

What this does is mitigate concerns of unfairness, since BlizzCon is more public relations than profit. Yes, it is still disappointing for the people who couldn't afford tickets, but at least a lot of money went to a good cause. It's certainly far better than that money going to scalpers.

Final Thoughts

A Dutch Auction with excess profits going to charity is a far more sane way of selling tickets. We don't have to all spam the server within 10s of the start time. We remove the equipment failure factor from the process.

We remove the opportunity for arbitrage that attracts scalpers. This is pretty key by the way. Any solution that does not involve a price increase (a lottery, for example) will attract scalpers who will try to manipulate the situation. This in turn may make it easier for normal people to buy tickets.

Finally, some charitable cause will benefit, and that's always good, especially for a large public relations event.

Update: On Lotteries

A couple of comments have brought up lotteries. I posted this in response, but decided it's important enough to put it into the main post.

The thing about lotteries is that they run into the same arbitrage/scalper issue.

Let's say that you have 5 tickets, and 10 people want them. 50% chance of getting a ticket, right?

What will happen is an enterprising scalper will create 100 accounts and enter the lottery. The odds of you getting a ticket become drastically lower. The scalper wins the majority of tickets and resells them for profit.

Of course, Blizz can try for anti-scalper mechanisms, but those are hard to get right. Look at how much trouble we have with bots and RMT in the regular game. The scalpers--and the people who buy tickets from them--have more incentive than Blizzard.

The key point here is that floating prices work. When the fixed price does not match the "true" price, you always see weird behaviour. You see shortages, or hoarding, or complex arbitrage schemes. This applies to pretty much everything in real life.

5 comments:

Redbeard said...

The stampede serves to generate interest for Blizz, so they're not going to change it. It's like trying to get tickets for a heavily promoted rock concert when tickets go on sale.

Back in the day, if you wanted to get tickets to see a band, you had to either camp out in front of a ticket office or frantically call until you got through. This is the same thing, because Blizz knows they've got a very hardcore number of loyal supporters who will show up and pay to attend a pep rally for their games.

I suspect that you'd have to jack up the price of tickets to above $500 before you see a decline in the gold rush to Blizzcon. By keeping it at $200, you keep that pressure on for a "reasonable" price, and you ensure that you have a bunch of attendees who will cheer whatever you have to say.

I really can't overemphasize the loyal audience enough. I've been in presentations when a company makes a big reveal and the crowd's reaction is a big "meh". Sure, there were the loyalists who would eat anything the company throws out, but there were a lot of skeptics in the crowd. By ensuring through public pressure that you will have a loyal crowd, you get a more positive vibe out of whatever you're promoting. And for Blizz, it is the brand itself.

Lif3boom said...

Maybe this is an American thing but in the UK for things like this, you apply for tickets and they are chosen at random.

The consumers don't get ripped off, there is no 'rush' for tickets and it's completely fair.

Gubjub said...

I always thought a lottery system would be best. You sign up that you are interested in tickets. Blizzard already has battlenet accounts which this could be done through. Designate a certain amount to be sold in each round. Give the people 12 hours or so to buy them then do the next round.

Personally though, I went to two Blizzcons... It was a mediocre experience. Nice to see guildies and such but the event itself is a lot of waiting in lines, short demos, hearing about stuff that will be available on line in a few minutes... Best parts were the concerts- Tenacious D and Foo Fighters.

Rohan said...

The thing about lotteries is that they run into the same arbitrage/scalper issue.

Let's say that you have 5 tickets, and 10 people want them. 50% chance of getting a ticket, right?

What will happen is an enterprising scalper will create 100 accounts and enter the lottery. The odds of you getting a ticket become drastically lower. The scalper wins the majority of tickets and resells them for profit.

Of course, Blizz can try for anti-scalper mechanisms, but those are hard to get right. Look at how much trouble we have bots and RMT in the regular game. The scalpers--and the people who buy tickets from them--have more incentive than Blizzard.

The key point here is that floating prices work. When the fixed price does not match the "true" price, you always see weird behaviour. You see shortages, or hoarding, or complex arbitrage schemes. This applies to pretty much everything in real life.

Gubjub said...

I agree that there could be problems, however blizzard has the battlenet account system in place. You could just say tickets are available to accounts 6 months or older - or that accounts must show a certain level of activity (starcraft, diablo, wow, hearthstone all have you sign in). Blizz can also enforce a rule where the ticket purchasers must pick up the badges in person.