Diii: Wtf?

If they let people DL the game for free, they'd have to charge per class, or something. I'm sure they only take a small share of the money exchanged on the AH. It's not like the vanity pets and such in WoW where they keep the whole payment.

Regardless, they have the potential to make a lot of money with this system. Though I don't think giving the game away for free would really increase their revenues any, as anyone who would be motivated enough to play the game and pay real money for the items would probably be motivated enough to spend $50 on the game to begin with regardless. I doubt many/any of the extra players they manage to get by giving the game away for free would contribute to their AH profits.

The whole point of microtransactions is that people who are unlikely to spend a large sum at once will spend even more in smaller portions. If they were selling items outright and taking the full proceeds, they certainly could make more money that way, if you ignore the fact that it would severely piss off their fan base...