It's no secret that Blizzard has struggled over the years with World of Warcraft and its various players/illicit sources making money off items featured in the game. Be it gold farmers in China, dudes selling swords on eBay, or whatever else, the demand for the sweetest of loot is high enough to where people are willing to plunk down actual cash money to get it.

Now, it sounds like Blizzard has figured out how to get in on the action.

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Blizzard today officially unveiled its plans for item transactions within the world of its upcoming action RPG, Diablo III. Similar to World of Warcraft, players will be able to use in-game gold to put items they collect up for sale via an in-game auction house--unlike WoW, however, they will also be able to put up items for cold, hard cash.

The system uses the same player-to-player auction model as the gold-based auction house, but, you know...for money. Each region will have its own respective currency, and players who sell items will have the option to keep the money in their Battle.net account for future transactions, or cash out entirely via a currently unknown third-party provider.

How does Blizzard make money on this whole process? By taking "nominal" fees, evidently. Blizzard will take a flat fee from the sale price of every transaction, and will also take a fee if you opt to cash out.

The question of the legality of such a system does immediately present itself, especially given the American government's recent crackdown on similar systems employed by online poker sites. Granted, those companies were skirting US law by using offshore companies to house and transfer players' funds, but Blizzard's system does seem on the bleeding edge of what the government is generally okay with when it comes to online fund transfers. In speaking to Joystiq, Blizzard's Rob Pardo did have an explanation for how they plan to try and keep this all above board.

If there's a legal issue at all, it's likely in the "cash out" option. Blizzard is transferring some of the responsibility to the third-party provider and, in order to do that, players will need to choose, right away at time of sale, whether they want to keep the money in Battle.net, or take it out to cash with that extra percentage fee going to the third-party provider. Any money left in the system needs to stay there. Players won't be able to cash it out at any point in the future, except by buying Blizzard products and services. "We're not a bank," says Pardo. "We don't want to deal with all of those additional regulations. So that's going to be the responsibility of our third-party payment provider."

That Joystiq preview features a much longer conversation with Pardo that makes for fascinating reading if you want to learn about how Blizzard plans to make this whole scheme work.

Gotta ask it: How many of you out there would use a system like this? Are you "hardcore" enough to pay cash for the sweetest of loots? Or is in-game gold more-than-sufficient for your play style?