From Diablo Wiki
Arena or deathmatch style (PvP) player vs. player combat was planned for inclusion in Diablo 3, and an Arena style PvP was very popular when demoed at Blizzcon 2010 and 2011. That feature did not make it into the final game, and there was no PvP at all in D3v until late in 2012 when the Brawling feature was introduced. (Just in time to beat the "within this year" promise Jay Wilson made in early 2012.) Brawling allows PvP in-game, but it has no balance changes, and no record keeping or ranking tables, and most fans find it much less than compelling.
Throughout 2012, 2013, and into 2014 fans have repeatedly asked the developers about an Arena combat mode, and always Blizzard has said they like the idea and want to support PvP properly, but haven't found the ideal system for that yet. 
That quote was from March 2012, and more than two years later arenas remain merely an item on a wish list. There is some fan speculation that Arenas will be a core feature in the second Diablo 3 Expansion, but that is not based on any official information.
 Why no Arena Mode?
The question has been asked many times, and always the developers say the system, as working, just wasn't right for Diablo 3. Josh Mosquera replied to an interview question about it in July 2013.
Most players greatly enjoyed the Arena mode in the Blizzcon 2010 and 2011 demo -- using pre-made characters for a skill-based, rather than level/item based winner -- and Blizzard's refusal to recreate that sort of system seems suspicious to some fans. Fan speculation is that Blizzard felt that sort of system in Diablo 3 would be too similar to their planned DotA-style game, which is targeted for release in 2014 as Heroes of the Storm.
The following info refers to the Arena System during development, and as seen at Blizzcon 2010 and 2011 in playable demos. It is preserved for posterity.
 During Development: The Arena in Diablo III
Battle Arenas were unveiled at Blizzcon 2010. They are a specialized game type in which players can engage in PvP combat in a controlled, regulated environment.
Arenas exist solely for PvP play, generally in 2v2 or 3v3 teams. They are not part of the normal PvM game and there are no monsters or items to find in the Arenas. (Though these are possible additions for future Arena game modes.) There are no NPC merchants in Arena games. 
The developers have repeatedly stressed that the PvP and PvM games are entirely separate in Diablo III, and that if any skills need to be tweaked to make Arena more competitive, this will not affect the same skill in the PvM game. (This was a major complaint about World of Warcraft's PvP, that skills had to be nerfed in PvM when they were tweaked in PvP.)
 PvP in Diablo III
The basic logic behind the Arena was explained by Jay Wilson in a short interview answer in the Blizzcon 2010 show program:
- This is the first time you’re showing Diablo III’s PvP combat. What can players expect from that aspect of the game?
- Jay Wilson: Diablo II had a big dueling community, but there was really no in-game support for it. You could go hostile and duel, but there were no ladders, teams, or really any structure to it. In Diablo III, we wanted to create an arena-style environment where players could fight each other. The different combinations of skills, traits, runes, and items available lead to an almost endless variety of builds, so rather than try to achieve perfect 1-vs.-1 balance, we focused on team-based arena PvP -- so even if one class or build is stronger than another, it’s complemented by the other classes on a team. We’ll have support for matchmaking and ladders, and we think players will have a lot of fun seeing what their single-player characters can do in an arena setting.
 Dual Specing
Many RPGs allow "dual spec" characters; one version for PvM and one for PvP. This is a way have two versions of the same character, with their equipment, skills, traits, and everything else entirely different. Diablo III is not planning to allow this sort of thing, and players will need to decide if they want to optimize their character for PvM or PvP.
All characters must play PvM to level up, but thanks to respecs and other such features, it won't be hard to level a character to the desired PvP level, and then pass them new equipment through the shared stash and respec their skills.
@Diablo commented on this in November 2010: 
- Hi, do you have any plans on allowing the items, traits, skills etc. used in PvM to be swapped for a PvP build on the same character? --Nielsdue
- No current plans for a dual spec or other quick-swap mechanic to change into a PvP build. --Diablo
 Arena Gameplay
The Battle Arena as seen at Blizzcon 2011 was match based play, based on a 3 vs 3 format. Blizzard chose 3 vs. 3 as a way to help eliminate some of the balance issues from a particular build / class combination. However, they have also stated that they would like to support 1v1 and other duels of a custom size, and perhaps even some other game types, so expect to see more than just the 3 vs. 3 format with the shipped game.
Early testing of the matches at Blizzcon 2010 showed that most of them were very quick and brutal, typically lasting less than a minute per round, with a new round beginning each time one team was completely wiped out. The system evolved and in 2011 matches ran for 15 minutes with total kills tracked, and slain players respawning after a few second delay.Maghda spawns. Though players only battle Maghda in that area, the layout is identical to the planned Battle Arena, and was obviously reused from that development for Maghda.
Diablo.IncGamers.com play tested the Arena at Blizzcon 2010 and submitted a lengthy write up of the play experience. The introduction describes the basic playing conditions of the Arena demo at Blizzcon2010. 
- There was no character customization allowed in the PvP characters. They were all level 30 with all their skill points and traits assigned. All of their skills were maxed out at level 5 (higher skill point totals will be unlocked in higher difficulty levels), all of their trait (passive skills) points were already assigned, and all of their skills already had runes socketed into them. All the runes I looked at were fairly generic in their function; +dmg/effect, or lowers resource cost. I think the idea was to improve the skills, but to keep them fairly near their normal function.
- All of the characters were wearing basic plate armor. Non-magical; they looked like they were in Sigon’s Set in the inventory window, but nothing had any modifiers on it. Not even the weapons; the Wizard had a plain 2H staff, the Witch Doctor had a plain dagger, and the Barbarian had a plain 2H axe.
- The characters were tweaked in some way to give them all roughly equivalent hit points. All had around 850-950 to start with ...and their resistances and defense were all balanced out fairly well. By that I mean the damage each char took from the spells and skills was fairly close to what those skills listed as damage. You saw the damage constantly, as numbers popped up during combat, and you could always see your own and everyone else's hit points on a bar over their heads. Even the Mongrels displayed their hit points in that fashion.
 Entering the Arena
There's no official word on the requirements for Arena combat. Jay Wilson spoke on this in April 2011.
Jay Wilson: We actually haven’t made that call yet. It’s very likely that will be, since we’re finding that Arenas, outside of max level, tend to be highly imbalanced in ways we can’t readily fix. But even if there is a requirement for match-made arenas, we probably still allow people to play custom arena games that don’t count against their ratings, and upon those we likely wouldn’t put nearly as many restrictions. So, people who just want to see what their level 20 characters can do in Arenas against other characters, even against higher level characters, we will probably allow that, but we wouldn’t make it official Arena game. The official game, we will structure it a little more. How much so? It reminds to be seen.
 Arena Maps
Though only one arena map/layout has been shown pre-release, the developers have stated that they will include a wide variety of maps. 
In April 2011 The Korean Diablo twitter feed confirmed that there would be outdoor Arena maps, with trees, rocks, ponds, etc.
A variety of map names can be seen in the Diablo III beta client data files. As with all data mining from the beta, there's no guarantee these will be a feature in the final game.
- PvP Maze_01: The Hedge Maze of Deadly Shrubbery
- PvP Octogon 01: The Octagon of Certain Doom
- PvP Pillar 01: Carls Canadian Crazy Map
- PvP Stairs 01: Raised Areas of Death!
- PvP Test BlueTeam: Khazra Encampment
- PvP Test Neutral: Contested Grounds
- PvP Test RedTeam: Undead Cemetery
- PvPArena: Arena
- PvPBattlefield: Battlefield
- PvPDungeon: Dungeon
Players desire a wide variety of maps and layouts in the game, so all strategies and build types can be viable.
For instance, an arena with too many trees, posts, walls, and other barriers would work against ranged attackers, while one that was wide open, but had lots of obstacles like pits, low walls, etc, would greatly favor ranged attackers as they could fire freely while melee characters moved slowly.
 Arena Game Types
Players have often requested a variety of game types, but the developers have promised nothing yet other than basic team-based PvP. Various game types are listed in the beta data files, but as with all data mined info, there's no guarantee these features will active in the final game.
- GameType1: Cooperative
- GameType2: PvP - Diablo III
- GameType3: PvP - DotA
- GameType4: PvP - Arena
- GameType5: PvP - Team Deathmatch
- GameType6: PvP - Free For All
 Arena Buffs
Three types of buffs are listed in the data files. As with all data mined info, it's not known if these will appear in the final game.
- Damage Increased by 100% * Attack, Casting, and Movement Speed increased by 25% * Damage Taken increased by 50%
- PvP_DamageBuff_0: [Temp] Quad Damage
- PVPRoundEndBuff_1_desc: Diablo has become bored with this incredibly long round. Time to die! / hah
 Arena Balancing
Diablo III's PvP is not meant to be perfectly balanced, especially for 1v1 matches. There is just too much potential variety with character builds, plus equipment variance, skill runes, and more. D3 is not meant as an e-sport in that way. The "balance" is meant to be found more in the 3v3 duels, where teams can form and compensate for the weaknesses of any particular character in the group.
Bashiok spoke on the PvP balance issue in February 2011. 
 Arena Death
In Blizzcon 2010 each team had 3 heroes and matches went on until all 3 from either team were killed. Matches went quickly and seldom ran more than a minute, so even players who died quickly didn't have long to wait before a new round began. In Blizzcon 2011 the system had changed to a non-stop deathmatch as seen in FPS games like Counter Strike. At that point characters who died were respawned in a semi-random location after a few seconds, and the match ran for 15 minutes at which point the team with more total kills was the winner.
In the 2010 version, dead characters became ghosts and could not interact, but could move around to watch the action.
 Arena Evolution
The Diablo 3 developers have not said much about how the arena system was designed or developed. Since the game's launch they repeatedly said they didn't want uncontrolled PvP as in previous games in the series, which made some sort of Arena dueling area seem a logical alternative. Precisely what developments they went through on their way to the current system is unknown.
- VG24/7: Has Arena PVP always been a priority for you? When did you decide to implement it?
- JB: I can say that we tried a few different things. The sky’s the limit when you first start out. And we zeroed in on [arenas} iteratively. You know, of all the things we tried, it just tends to come back to that being the most solid, the most fun, and the easiest to jump into. Having tried a whole bunch of different stuff, that's the one that just popped up as being the best on its own. That's what the feedback was. That's not to say we didn't learn a lot about other possibilities. That's the one that just really nailed it.
 World of Warcraft PvP Influences
While none of the Diablo III developers ever mentioned WoW's PvP system during their many comments on the Arena from Blizzcon 2010, one of the WoW developers did.
This news item kicked off a huge debate about the shortcomings of WoW's PvP system, with most WoW veterans sure that Diablo III's system would be far more enjoyable.
 Arena Rewards and Achievements
The developers have been vague about what sorts of rankings and rewards arena players can look forward to. They have stressed that the basic game is about PvE; players will need to battle monsters to obtain their equipment and experience. This equipment can be put to excellent use in the Battle Arena, and there will be rewards for the winner, but these will be achievements and arena ranking, rather than items or experience.
Arena rewards will be earned by wins in regulation, 3v3 team duels against qualified opponents. Players will be able to create their own 1v1 or FFA games, but those will not qualify for the same sort of achievements, since win-fixing would be easily done when playing friends rather than anonymously-selected opponents of a similar skill rank.
Jason Bender spoke about this from Blizzcon 2010. 
- In a panel, some of your fellow Diablo III devs were discussing the fact that the game’s PVP reward system isn’t based on loot or gold or other traditional Diablo standbys. Instead, it’s all about earning titles, achievements, and the like. Why’d you decide to go that route instead of giving players new toys for all their hard work?
- JB: It’s definitely more of a Call of Duty-style progression speaking very generally. Part of the reason is that we want to make sure you’re playing PVP for the right reasons. We want PVP to be inherently fun. And Diablo is primarily a PVE game – cooperative with lots of loot, right? We don’t think the best way to get loot should be to grind in PVP and be like “Well, I don’t really like PVP, but it’s where I get the best loot.” We really want to make sure you’re playing PVP just because it’s fun and for bragging rights. We intend to support it, but really, PVE and cooperative is where the loot’s at.
 Arena Matchmaking
While it will be possible to play in the Arena with or against your friends in established teams, the D3 Team are going to create a large matchmaking system to allow strangers to quickly get into games against opponents of equivalent skill, any time of the day or night.
Jay Wilson also spoke on this issue from Blizzcon: 
And you’ll also be able to go in with organized teams, or to play alone and get slotted into a random team.
The matchmaking ui image above is included in the live Diablo 3 files but isn't active, however it sometimes appears when trying to log out of the game. It will simply pop up but it can not be interacted with.
 Arena Will Focus on Diablo III's Core Game
- VG247: How open is Arena PVP going to be as a platform? Where does it fall in the great Blizzard divide? Is it like StarCraft II: potentially able to house everything from puzzle games to Left 4 Dead rip-offs? Or is it like WoW, which is pretty much locked up tight aside from the occasional UI mod that skitters through?
- JB: We're not going to be very mod-heavy like StarCraft. We're not supporting them the same way. So Diablo, for example, is really about us providing [the content]. That’s why it has randomization. The way you find the loot and all that stuff is really fair. Obviously, it’s not an MMO, so the problems are a bit different. But we really do want you to jump in with your buddies and slay the monsters and get the cool stuff.
- That extends to PVP. So currently, we’re not gonna ship an editor that you can make your own maps in or anything. That’s not planned. But I can say that we’ve learned so much from Battle.net and StarCraft that there are a lot of other ways we think we can make the experience much richer. I think StarCraft has taught us so much; things like achievements and titles and things of that nature, how people connect, how we match people up – ladders and such. We have a lot of work we can do there to really make the experience awesome in a whole bunch of other ways.
 Hardcore Battle Arena
Hardcore characters can duel other Hardcore characters in the PvP Battle Arena, just like normal characters. However, that begs a question; is dying in the Arena the same thing as dying to monsters in Campaign mode? Do Hardcore character stay dead when they die in the Arena?
Initially, the answer to that question was yes and through 2009-2010 the developers kept saying death was death, whether in PvM or PvP. This spawned endless fan debate, with optimistic proponents of perma-death saying it was true to the spirit of Hardcore. The more realistic fans, based on the fact that PvP was almost unknown in Hardcore Diablo 2, argued for optional permanent death in D3 Arena for pragmatic reasons. Since with only perma-death they knew there would basically be no Arena for HC chars.
- (See the Arena section of the Hardcore article for much more on this controversial issue.)
The developers must have heard some of the fan debate, since they changed their plans in 2011, and at that year's Blizzcon they revealed that Hardcore PvP was no longer permanently fatal.
 Hardcore Death in Brawling
That philosophy continued into the Brawling system, with hardcore characters able to play without permanent risk. There were some bugs, unfortunately, and early on in the Brawling system there were numerous bugs that allowed characters to die if they returned to town while still under a DoT effect incurred in the Brawling area. This could cause a Hardcore character permanent death.
 Arena Gameplay Video
Arena gameplay was first introduced by a short video shown at the Blizzcon 2010 opening ceremonies.
Several minutes of Arena matches were shown at the end of the long gameplay movie released on the Blizzcon 2010 press kit.
Seventeen minutes of scrambling newbie action in the Arena.
Fifteen more minutes of Arena action filmed by the same guys. They played several games between the first movie and this one, and as a result the action in this one is much more skillful and entertaining.
The second of the two fan-recorded movies above has numerous excellent action sequences, and some analysis of key points was provided in the news post on Diii.net.  Refer to these if you want to know what to look for at the various times, since the action can be fast to the point of confusion for fans who haven't had a chance to play the Battle Arena yet.
- 3:40-4:00 -- Nice chase sequence with the two blue team wizards hunting down the last surviving red wizard. This happened a lot at Blizzcon with players using the posts for cover from Disintegrate and moving around the perimeter. Pursuers had to throw Hydras out in front of them to cut them off or Teleport ahead to get a firing angle. You could dodge for some time on the edge like that, but it was a doomed effort since you couldn’t get to the center where the health globes spawned, while your pursuers were able to grab them and heal up.
- 4:12 -- The red team Witch Doctor shows how paralyzingly slow Grasp of the Dead is. The Blue wizard under its effect is virtually motionless for several seconds, and only survives thanks to a lack of nearby Barbarians, Mongrels, and the WD not being quicker with his Firebomb. The Blue wizard’s round ends shortly afterwards after he takes a big Whirlwind, and then gets stuck in a Slow Time bubble with a Hydra banging away and a Meteor coming down.
- 5:00-6:12 -- Awesome end game fight with one blue Wizard (not the PoV) fighting a red wizard and barb, both of whom are very low on hit points. Blue Wizard does good work with taking cover, using hydras and meteors, and sniping Disintegrate, and gets the Barb, but he winds up stuck in a Slow Time and eats a Meteor when both he and the other Wiz were down to a sliver.
- 6:30 -- Shows the danger of teleporting towards enemies, as the PoV blue wizard bamfs across the screen and lands in a Slow Time bubble, then gets absolutely chewed up by Sacrificed Mongrels and some Disintegrate. His round ends seconds later.
- 7:36 -- Same problem, with a long Teleport into close range of another Wizard. Slow Time + no teleport for escape = dead.
- 7:38 -- Nice end to the round twenty seconds later as the one surviving blue Wiz runs for it, rounds a post with a Barb in pursuit, and crashes right into 3 incoming Mongrels. I had a few of those moments myself at Blizzcon. IMHO, if you’re going to die, you might as well die big!
- 9:42 -- Nice sequence of the PoV blue wizard who is nearly dead. With a Barb right on his heels, he races through the middle and manages to grab all 4 health globes, narrowly avoiding an Ancient Harpoon on the way.
- 10:50 -- The PoV blue wizard does it again. Nearly dead, racing along with exploding Mongrels right on his heels, he grabs all 4 health orbs and goes back to full life.
 Battle Arena Media
Screenshots of the Arena can be seen in the Image Gallery.
- ↑ Team Death Match Shelved - Jay Wilson, Blizzard, 27 December 2012
- ↑ No PvP at D3 launch - Blizzard Press Release, March 2012
- ↑ PvP is now "Brawling" - February 10, 2012
- ↑ PvP in Diablo 3 - Blizzard, April 29, 2012
- ↑ Arenas coming post-launch - Blizzard, March 2012
- ↑ D3 Developer Interview - Josh Mosqueira, July 2013
- ↑ Diablo 3 Podcast, PvP Delays - The Diablo Podcast, October 2011
- ↑ Crafting Sanctuary Panel Q&A, Blizzcon Blizzcon 2010 - DiabloWiki.net, October 26, 2010
- ↑ Jay Wilson @ Blizzcon 2010 - IncGamers October 26, 2010
- ↑ @Diablo tweet - IncGamers November 2010
- ↑ Diii.net Battle Arena Report @ Blizzcon 2010 - IncGamers. November 6, 2010
- ↑ Jay Wilson Interview - Diablo3.cc, May 4, 2011
- ↑ @Diablo tweet - IncGamers, December 2010
- ↑ Korean Diablo 3 Tweet - Diablo.IncGamers.com, April 2011
- ↑ Balance of PvP - Blizzard, February 26, 2011
- ↑ Jason Bender @ Blizzcon 2010 - VG24/7. October 25, 2010
- ↑ John Legrave @ Blizzcon 2010 - GamePlanet NZ, November 10, 2010
- ↑ @Diablo - IncGamers, November 2010
- ↑ Jason Bender @ Blizzcon 2010 - VG24/7. October 24, 2010
- ↑ Julian Love @ Blizzcon 2010 - Slashdot. October 25, 2010
- ↑ Jay Wilson @ Blizzcon 2010 - Diablo 3 ESP. October 25, 2010
- ↑ Jason Bender @ Blizzcon 2010 - VG24/7. October 25, 2010
- ↑ Wyatt Cheng, Andrew Chambers Interview - Gameplanet.co.nz. October 26, 2011
- ↑ Brawling PvP bugs - IncGamers, January 2013
- ↑ Blizzcon demo footage - IncGamers, November 2010
- Blizzard's official Arena page. Pretty, but very sparse on information.