When we wrote about the Pet Store last year, we jokingly suggested that mounts and gear might someday be for sale as well. Now that Blizzard is selling a $25 mount, what does this mean for the future?

When World of Warcraft publisher Blizzard opened its Pet Store last November, it marked a significant change in the way the company does business with its customers. By selling a couple of new (and exclusive) vanity pets in its online store, Blizzard set a precedent; for the first time in the MMO's history, players could buy in-game content in exchange for "real" money. World of Warcraft had finally adopted the micro-transaction revenue model, which naturally raised the question, "What's next?"

Among other issues, that's one of the questions we tried to tackle in our news-editorial, "What's Next, Blizzard? Mounts and Gear For Cash?", published a few days after the announcement. At the time, we were being a tad facetious; player reaction was split, with opponents fearing that Blizzard would begin selling more than just vanity pets in the days to come. Ironically, some of those claims weren't too far off-base. As we reported last week, Blizzard added the new Celestial Steed mount to its merchandise, hitting yet another milestone.

THE PRICE

The Algalon-inspired Celestial Steed is a flying/ground hybrid mount that scales with your riding skill, up to 310 percent speed if you already have a flying mount capable of that speed (check out Wowhead's Celestial Steed item page for details). Like Blizzard's other micro-transaction items, the mount binds to your account, so any of your existing or future characters can redeem it after purchase.

The mount costs $25 USD or, as ZAM's MisterBones pointed out in his original news post, the price of "dinner at The Olive Garden." But is 25 bucks too expensive for a twinkly new flying mount? As we noted in our previous editorial, even $10 for vanity pets like the Pandaren Monk or the new Lil' XT is fairly pricey, compared to relative content in other MMOs.

And what about the bigger picture? Was Blizzard's first attempt in the micro-transaction market so successful that its online store will be flooded with items by this time next year? Finally, the question is raised once again; "What's next?" With the new Battle.net marketplace for WoW and future games just around the corner, are we finally beginning to feel the consumer impact of the Activision-Blizzard merger, as opponents suggest?

Is $25 too expensive for a World of Warcraft mount? If it was, they wouldn't be selling like hotcakes. According to an article at 1UP.com (based on estimates from WoW.com, assuming neither party misinterpreted proprietary aspects of the Blizzard Store's queuing system), Blizzard sold $2 million worth of Celestial Steeds just four hours after its release. That figure comes from WoW.com's report that the Blizzard Store was queued up to 80,000 by 4:45 p.m. EDT on April 15. Less than three hours later, at 7:30 p.m. EDT, the queue was more than 140,000, according to WoW.com.

THE FUTURE

In our previous editorial, we mentioned that price points are ultimately determined by customers themselves. Like most companies, Blizzard won't release details and figures about its micro-transaction items, or the multitude of factors it used to slap the $25 price tag on the Steed, or the original $10 for vanity pets. But one of the most important factors—if not the most important—is, and always will be, customer demand.

We don't need an internal sales report to gauge that demand, either. A brief stroll in Ogrimmar, Stormwind or Dalaran is we all we need to see that players are obviously buying the special pets; by the beginning of this year, it was difficult to walk more than 100 yards without stepping on a Pandaren Monk. And even though the Celestial Steed and Lil' XT have only been out for a week, how many of them did you see on your server last weekend?

Granted, many players balk at the idea of spending $10 or $25 for an exclusive pet or mount, and the majority of WoW's player base will probably never buy one. But as long as Blizzard can turn a profit from low-risk endeavors like these—even among a small niche of customers—they're here to stay.

Is it right, though? Do exclusive items like these foster jealousy and segregation between players, as we asked in our previous editorial? Proponents of micro-transactions claim that no one is forcing you to buy anything, and as long as Blizzard only sells "vanity" items that don't affect gameplay, there's no harm in it.

We agree with that sentiment for the most part, but we've also seen plenty of backlash from MMO players when a publisher oversteps or an item store goes out-of-control. It's recently happened with EverQuest II, Allods Online and Star Trek Online, just to name a few.

Most fans agree that, despite whatever the future holds for micro-transactions in WoW, Blizzard will never sell stat-enhancing or gameplay-influencing items (not as long as it's still charging a monthly subscription, at least). The problem is that fans enjoy many different aspects of the game; some players don't care about raiding and progression, or the stat-building and gear-enhancement related to those aspects.

Some players get more fulfillment out of things like role-playing or exotic item collection, and that's what Blizzard needs to keep in mind as it eventually releases more micro-transaction content. What if Blizzard introduced exclusive Warlock demon skins in the item store, for example? Such an item wouldn't affect gameplay at all, but many players would feel they're missing out on something they should be "entitled" to without paying extra money.

That's an extreme and unrealistic example, but it helps to articulate the point; just because an item or feature doesn't affect stats or combat gameplay, that doesn't mean it isn't valuable to millions of players who already pay a monthly subscription fee.

THE "KOTICK FACTOR"

The issue of micro-transactions in World of Warcraft might be more relevant in the "bigger picture" than many Blizzard fans realize. We're not conspiracy nuts here at ZAM, and we don't indiscriminately denounce successful game developers and publishers as "sell-outs." However, there's no denying that Bobby Kotick's business strategies are running rampant throughout Blizzard today.

Kotick is the CEO and president of Activision-Blizzard, infamous among the gaming community for his quote to MTV Multiplayer, when he explained that he's not interested in supporting games that "don't have the potential to be exploited every year on every platform with clear sequel potential and have the potential to become $100 million dollar franchises."

So if you're one of the millions of Blizzard fans wondering why StarCraft 2 will be released in three separate games instead of one, that's one big reason. Why release a single game when you can split it into three, especially since it's not an MMO? Sustained revenue is understandably "all the rage" these days; first-person shooters and real-time strategy games are milking gamers for every penny they can via "downloadable content" and other add-on packs.

PC gamers of the 1990s are used to this crazy concept of "free online multiplayer" when they purchase virtually anything except an MMO, otherwise the industry would have already tried to switch the paradigm, charging monthly subscriptions for all online play. ZAM readers discussed this topic, expressing frustration and discontent, when we reported that the new Battle.net won't support LAN play for SC2 and other upcoming games.

In addition to splitting games into multiple releases, Blizzard's upcoming Battle.net marketplace (announced at BlizzCon 2009) will emulate content-on-demand services like Apple's App Store, Steam or Xbox Live. Players will be able to purchase downloadable content like maps, mod packs and more for StarCraft 2 and Diablo III.

We can't blame Blizzard for being financially-innovative and wringing its games for every penny they're worth; that's just good business, as long as the quality holds. The company has to perform for its shareholders as well its fans, as we reported a couple months ago. But there's also something to be said for mutual respect and trust between a company like Blizzard and its customers, and doesn't take much to break that relationship—especially when there are so many other fish in the sea.