A Free Market in Video Gaming

An absolutely fascinating message I just received from Wulf Wechsung:

There is a video game genre called MOBA that was almost singlehandedly launched by a guy calling himself Guinsoo who wrote a modification called Dota to the commercial video game Warcraft 3 (by Blizzard Entertainment). He gave Dota away for free. Dota was HUGE! Bigger than Warcraft 3 ever was. Millions of people played this for years and years (and some still do). Great story, whatever, right?

It get’s better.

So guys involved in the continues development of Dota split off in all four winds. Guinsoo went to Riot Games where they develop an improved version of Dota called League of Legends (short LoL). They give it away for free making money by selling people cosmetic in-game items.

At about the same time the company S2 releases Heroes of Newerth (short HoN), also an improved version of Dota but improved in a different way. Whereas LoL is meant to be more accessible and forgiving, HoN is faster and encourages ruthless play. HoN has a conventional launch, pay 30€ or whatever get the game. Of course they get trounced by LoL. I’d reckon HoN has about 1/10th the player base that LoL has. So S2 goes free-2-play (competition works, what a surprise) and also starts selling purely aesthetic items. This allowed them to stay relevant and so HoN is still around.
Great story how people make money by giving high technology away, right? It get’s better!

Icefrog, the latest and longest maintainer of the originial Dota, goes to Valve Corporation and together they develop Dota 2, pretty much a one for one copy of Dota’s content on top of very much improved infrastructure. Dota 2 will also be free to play (it’s already out but not really, it’s strange).

Now Blizzard, the company behind Warcraft 3, the basis of the original Dota, thinks, “well, Dota was sort of kind-of based on our IP so we sue all of these idiots”, right? That’s what has to happen right? As it turns out, no. They are currently developing a Dota-clone called “Blizzard-Allstar” and you guessed it, plan on giving it away for free.

Four commercial entities that make minor variations of the same product and give the base functionality away for free. Who copy-and-improve “shamelessly” from their competition and their precursors. Who sponsor lavish tournaments with millions of dollars of price money going the the very best players of their game. This has to be a libertarian fantasy, this can’t happen in the real world. And yet it did.

This is a link the final game of Valve’s Dota 2 Tournament “The International 2012″