If people are willing to pay for a higher level avatar, etc, I wonder why Blizzard doesn't just allow one to purchase that directly from them. Virtual worlds are one place where actually putting time in to do "work" is only required if the owners of the world decide to require it.
My guess is that they evaluated how much money they would gain from doing this versus how much they would lose in subscriptions where people didn't feel like they could adequately compete against wealthier players.
Additionally, Blizzard makes their money from the longevity of their players. Someone who paid someone else to power level their characters are going to have a smaller emotional tie to their character, and are going to be less likely to continue to subscribe in the long-term (as a large amount of content has already been skipped for them).
If Blizzard were to really make this legitimate, new users would probably be turned off to the fact that they, too, are sweating to boost their character when others are just buying it. If it is somewhat underground, many people don't see it as legitimate and won't be turned off or notice that others around them simply buy their status.
There seem to be two MMO models, the subscription model and the subscription-free model where you pay for better gear. I don't know if there are any hybrid games (I don't play any MMOs myself) but I could imagine that once the premium practice was legitimised, people would get upset about having to pay for the subscription.
What I think is really interesting about WoW is that unlike practically every other MMORPG, the number of subscribers continues to rise after four years on the market. The usual pattern is to peak after a year or two, and then gradually fade:
I wonder about the role of expansion packs in this phenomenon, and whether other types of gaming or software products could follow a similar model, instead of complete product replacements to new versions.
Interesting graph. (although someone needs to be introduced to the concept of a logarithmic scale)
I found it particularly intriguing that (as far as I can make out) at no point in time did Everquest 2 have more subscribers than Everquest, and the same is true for Lineage 2 and Lineage. I wonder if that's one of the reasons Blizzard are continually upgrading the existing game rather than releasing a replacement?
As for other software: well, I think a lot of subscription-based and/or web-based software already does this. You don't choose to switch to GMail 2.0, it's just a steady trickle of new stuff.
Conventional games on the other hand are very hit-driven - they don't peak after a year or two but within the first few weeks, after which they fall off more or less exponentially. They do release expansions for many games of course, although I think it depends heavily on the game how well that sells. (the famous extreme example is of course Railroad Tycoon 2, where the expansion sold more copies than the base game due to piracy)
Its not just expansion packs. EQ had expansion packs, and I'm sure other MMO's did as well.
WoW has been _vastly_ improved by Blizzard over the last couple of years, and it was a pretty damn good game to start with. They really have just polished and polished their product.